EXHIBIT 1.1.1
STANDARD TERMS AND CONDITIONS OF TRUST
FOR
ADVISOR'S DISCIPLINED TRUST
EFFECTIVE FOR UNIT INVESTMENT TRUSTS INVESTING IN EQUITY SECURITIES
ESTABLISHED ON AND AFTER AUGUST 5, 2004
(INCLUDING ADVISOR'S DISCIPLINED TRUST, SERIES 13 AND SUBSEQUENT SERIES)
AMONG
FIXED INCOME SECURITIES, L.P.
AS DEPOSITOR
AND
THE BANK OF NEW YORK
AS TRUSTEE
AND
FIXED INCOME SECURITIES, L.P.
AS EVALUATOR
AND
FIXED INCOME SECURITIES, L.P.
AS SUPERVISOR
TABLE OF CONTENTS
PAGE
Preambles 1
Certificate of Ownership 1
ARTICLE I DEFINITIONS 3
Section 1.01. Definitions 3
ARTICLE II DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST; SEPARATE
TRUSTS; FORM AND ISSUANCE OF UNITS 8
Section 2.01. Deposit of Securities 8
Section 2.02. Acceptance of Trust 11
Section 2.03. Issuance of Units 11
Section 2.04. Separate Trusts 12
Section 2.05. Form of Certificates 12
ARTICLE III ADMINISTRATION OF FUND 12
Section 3.01. Initial Cost 12
Section 3.02. Income Account 13
Section 3.03. Capital Account 13
Section 3.04. Reserve Account 14
Section 3.05. Deductions and Distributions 14
Section 3.06. Distribution Statements 16
Section 3.07. Sale of Securities 18
Section 3.08. Counsel 20
Section 3.09. Notice and Sale by Trustee 20
Section 3.10. Liability, Indemnification and Succession of Depositor 20
Section 3.11. Notice to Depositor 21
Section 3.12. Replacement Securities 22
Section 3.13. Compensation for Services Provided 23
Section 3.14. Deferred Sales Charge 24
Section 3.15. Creation and Development Fee 24
Section 3.16. Reclaiming Foreign Taxes 25
Section 3.17. Foreign Currency Exchange 25
ARTICLE IV SUPERVISOR 26
Section 4.01. Liability of Supervisor 26
Section 4.02. Resignation and Removal of Supervisor; Successor 26
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ARTICLE V EVALUATION OF SECURITIES; EVALUATOR 27
Section 5.01. Evaluation of Securities 27
Section 5.02. Information for Unitholders 28
Section 5.03. Liability of Evaluator 28
Section 5.04. Resignation and Removal of Evaluator; Successor 28
Section 5.05. Valuation of Listed Securities for which Closing
Prices are Available; Foreign Currency Conversions 29
ARTICLE VI EVALUATION, REDEMPTION, PURCHASE, TRANSFER, INTERCHANGE
OR REPLACEMENT OF UNITS 30
Section 6.01. Trust Evaluation 30
Section 6.02. Redemptions by Trustee; Purchases by Depositor 31
Section 6.03. Transfer or Interchange of Units 33
Section 6.04. Certificates Mutilated, Destroyed, Stolen or Lost 34
Section 6.05. Rollover of Units 35
ARTICLE VII TRUSTEE 36
Section 7.01. General Definition of Trustee's Liabilities, Rights and Duties 36
Section 7.02. Books, Records and Reports 39
Section 7.03. Indenture and List of Securities on File 40
Section 7.04. Compensation 40
Section 7.05. Removal and Resignation of Trustee; Successor 41
Section 7.06. Qualifications of Trustee 43
ARTICLE VIII RIGHTS OF UNITHOLDERS 43
Section 8.01. Beneficiaries of Trust 43
Section 8.02. Rights, Terms and Conditions 43
ARTICLE IX ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS 44
Section 9.01. Amendments 44
Section 9.02. Termination 44
Section 9.03. Termination of a Target Index 47
Section 9.04. Construction 47
Section 9.05. Registration of Units 47
Section 9.06. Written Notice 47
Section 9.07. Severability 47
Section 9.08. Dissolution of Depositor Not to Terminate 48
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STANDARD TERMS AND CONDITIONS OF TRUST
FOR THE
ADVISOR'S DISCIPLINED TRUST
These Standard Terms and Conditions of Trust are executed by the Depositor,
the Trustee, the Evaluator and the Supervisor.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, the Trustee, the Evaluator and the Supervisor agree as
follows:
INTRODUCTION
These Standard Terms and Conditions of Trust shall be applicable to Fixed
Income Securities, L.P. unit investment trusts as provided in this paragraph.
For Fixed Income Securities, L.P. unit investment trusts to which these Standard
Terms and Conditions of Trust are to be applicable, the Depositor, the Trustee,
the Evaluator and the Supervisor shall execute a Trust Agreement incorporating
by reference these Standard Terms and Conditions of Trust and designating any
exclusions from or additions or exceptions to such incorporation by reference
for the purposes of each Trust or variation of the terms hereof for the purposes
of each Trust.
WHEREAS, the form of the Certificates in the respective Trusts shall be
substantially as follows:
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CERTIFICATE OF OWNERSHIP
Evidencing an Undivided
Interest in
THIS IS TO CERTIFY THAT
is the owner and registered
holder of this Certificate evidencing
the ownership of
of fractional undivided interest in the above-named Trust created pursuant to
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 assents and is bound, a summary of which Indenture is
contained in the prospectus related to the Trust. This Certificate is
transferable and interchangeable by the registered owner 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
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and any other documents that the Trustee may require for transfer, in form
satisfactory to the Trustee, and payment of the fees and expenses provided in
the Indenture.
Witness the facsimile signature of the Depositor and the manual signature
of an authorized signatory of the Trustee.
DATED:
FIXED INCOME SECURITIES, L.P. THE BANK OF NEW YORK
Depositor Trustee
By By
-------------------------------- --------------------------------
Chairman Authorized Signatory
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 UNIF TRANS MIN ACT -
_____Custodian_____
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right Under Uniform Transfers to Minors Act
of survivorship and not
as tenants in common --------------------------------------
State
Additional abbreviations may also be used though not in the above list.
(FORM OF ASSIGNMENT)
For Value Received,
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hereby sell, assign and transfer _________ Units represented by this Certificate
unto
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SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE MUST BE PROVIDED
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| |
| |
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and does hereby irrevocably constitute and appoint _____________________,
attorney, to transfer said Units on the books of the Trustee, with full power
and substitution in the premises.
Dated: -------------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
Certificate in every particular,
without alteration or enlargement
or any change whatever.
SIGNATURE(S) GUARANTEED BY
- ----------------------------------
Firm or Bank
- ----------------------------------
Authorized Signature
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| Signatures must be guaranteed by a |
| participant in the Securities Transfer |
| Agents Medallion Program ("STAMP") or in |
| such other signature guarantee program |
| as is acceptable to the Trustee. |
------------------------------------------
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NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained the Depositor, the Trustee, the Evaluator and the
Supervisor agree as follows:
ARTICLE I
DEFINITIONS;
Section 1.01. Definitions. Whenever used in this Indenture the following
words and phrases, unless the context clearly indicates otherwise, shall have
the following meanings:
(1) "Depositor" shall mean Fixed Income Securities, L.P. and its
successors in interest, or any successor depositor appointed as hereinafter
provided.
(2) "Trustee" shall mean The Bank of New York, or any successor
trustee appointed as hereinafter provided.
(3) "Evaluator" shall mean Fixed Income Securities, L.P. and its
successors in interest, or any successor evaluator appointed as hereinafter
provided.
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(4) "Supervisor" shall mean Fixed Income Securities, L.P. and its
successors in interest, or any successor evaluator appointed as hereinafter
provided.
(5) "Additional Securities Delivery Period" shall have the meaning
assigned to it in Section 2.01.
(6) "Business Day" shall mean any day other than (1) a Saturday or
Sunday, (2) any day on which the New York Stock Exchange is closed, (3)
with respect to a Trust which holds only Securities principally traded on a
foreign securities exchange in a single country, any day on which such
foreign securities exchange is closed due to a customary business holiday
on such exchange and (4) any other day listed as excepted in the
Prospectus, as may be amended from time to time.
(7) "Capital Account" shall have the meaning assigned to it in
Section 3.03.
(8) "Cash" shall have the meaning assigned to it in Section 2.01.
(9) "Certificate" shall mean any one of the certificates executed by
the Trustee and the Depositor evidencing ownership of an undivided
fractional interest in a Trust.
(10) "Contract Securities" shall mean Securities which are not
actually delivered concurrently with the execution and delivery of the
Trust Agreement and which are to be acquired by a Trust pursuant to
contracts, including (i) Securities listed in Schedule A to the Trust
Agreement and (ii) Securities which the Depositor has contracted to
purchase for the Trust pursuant to Section 3.13 hereof.
(11) "Creation and Development Account" shall have the meaning
assigned to it in Section 3.15.
(12) "Deferred Sales Charge Payment" shall have the meaning assigned
to it in Section 3.14.
(13) "Deferred Sales Charge Payment Dates" shall have the meaning
assigned to it in the Trust Agreement.
(14) "Delivery Period" shall have the meaning assigned to it in
Section 2.01.
(15) "Depositor's Account" shall have the meaning assigned to it in
Section 3.14.
(16) "Distribution Agent" shall mean the Trustee acting in its
capacity as distribution agent pursuant to Section 7.05 herein.
(17) "Distribution Date" shall have the meaning assigned to it in the
Trust Agreement.
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(18) "Evaluation" shall have the meaning assigned to it in Section
5.01.
(19) "Evaluation Time" shall mean the close of regular trading on the
New York Stock Exchange or such other time stated in the Prospectus related
to a Trust.
(20) "Failed Contract Security" shall have the meaning assigned to it
in Section 3.12.
(21) "Fund" shall mean the collective Trusts created by the Trust
Agreement, which shall consist of the Securities held pursuant and subject
to the Indenture together with all undistributed income received or accrued
thereon, any undistributed cash held in the Income or Capital Accounts or
otherwise realized from the sale, redemption, liquidation, or maturity
thereof. Such amounts as may be on deposit in any Reserve Account
hereinafter established shall be excluded from the Fund.
(22) "Income Account" shall have the meaning assigned to it in Section
3.02.
(23) "Income Distribution" shall have the meaning assigned to it in
Section 3.05.
(24) "Indenture" shall mean these Standard Terms and Conditions of
Trust as originally executed or, if amended as hereinafter provided, as so
amended, together with the Trust Agreement creating a particular series of
the Fund.
(25) "Index Trust" shall mean a Trust which has elected to be taxed as
a "regulated investment company" as defined in the United States Internal
Revenue Code of 1986, as amended, and invests primarily in securities which
are components of a single recognized securities index with the objective
of (a) holding a portfolio of Securities which substantially replicates the
components of such index and the weightings thereof on an ongoing basis
over such Trust's life and/or (b) achieving a total return comparable to
such index on an ongoing basis over such Trust's life. Such recognized
securities index related to an Index Trust shall be referred to herein as
the Trust's "Target Index".
(26) "Initial Date of Deposit" shall mean the date of the Trust
Agreement applicable to a Trust.
(27) "Letter of Credit" shall mean the letter of credit or letters of
credit provided to the Trustee by a financial institution for the purchase
of any Contract Security deposited in a Trust.
(28) "Mandatory Termination Date" shall have the meaning assigned to
it in Section 9.02.
(29) "MFQS" shall mean Mutual Fund Quotation Service operated by The
Nasdaq Stock Market, Inc.
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(30) "Nasdaq" shall mean The Nasdaq Stock Market, Inc.
(31) "New Series" shall have the meaning assigned to it in Section
6.05.
(32) "Percentage Ratio" shall mean (a) with respect to a Trust other
than an Index Trust, the percentage relationships existing on the Initial
Date of Deposit between each Security per Unit and all Securities
attributable to each Unit and (b) with respect to an Index Trust, the
actual number of shares of each Security as a percent of all shares of
Securities necessary to cause the Trust portfolio to replicate, to the
extent practicable, the Trust's Target Index immediately prior to any
subsequent deposit of Securities. The Percentage Ratio shall be adjusted
to the extent necessary, and may be rounded, to reflect the occurrence of a
stock dividend, a stock split or a similar event which affects the capital
structure of the issuer of a Security.
(33) "Prospectus" shall mean (a) the prospectus relating to a Trust
filed with the Securities and Exchange Commission pursuant to Rule 497(b)
under the Securities Act of 1933, as amended, and dated the date of the
Trust Agreement.
(34) "Record Date" shall have the meaning assigned to it in the Trust
Agreement.
(35) "Redemption Date" shall have the meaning assigned to it in
Section 6.02.
(36) "Redemption Price" shall have the meaning assigned to it in
Section 6.02.
(37) "Reinvestment Notice Date" shall have the meaning assigned to it
in Section 3.05.
(38) "Replacement Security" shall have the meaning assigned to it in
Section 3.12.
(39) "Reserve Account" shall have the meaning assigned to it in
Section 3.04.
(40) "Rollover Distribution" shall have the meaning assigned to it in
Section 6.05.
(41) "Rollover Unitholder" shall have the meaning assigned to it in
Section 6.05.
(42) "Securities" shall mean the equity securities of corporations or
other entities, including Contract Securities, deposited in irrevocable
trust and listed in the Schedules to the Trust Agreement or which are
deposited in or purchased on behalf of a Trust pursuant to Section 2.01(b)
hereof or as otherwise permitted hereby, and any securities received in
exchange, substitution or replacement for such securities, as may from time
to time continue to be held as a part of the Trusts.
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(43) "Special Redemption Date" shall mean the Mandatory Termination
Date or such other meaning assigned to it in the Trust Agreement.
(44) "Subscription Notice" shall have the meaning assigned to it in
Section 2.01.
(45) "Target Index" shall have the meaning assigned to it in the
definition of "Index Trust" herein.
(46) "Trade Date" shall have the meaning assigned to it in Section
2.01.
(47) "Trust" or "Trusts" shall mean the separate trust or trusts,
created by this Indenture, the Securities constituting the portfolios of
which are listed in the various separate Schedules attached to the related
Trust Agreement.
(48) "Trust Agreement" shall mean the trust agreement for the
particular series of the Fund into which these Standard Terms and
Conditions are incorporated.
(49) "Trust Evaluation" shall have the meaning assigned to it in
Section 6.01.
(50) "Unit" in respect of any Trust shall mean the fractional
undivided interest in and ownership of the Trust which shall be initially
equal to the fraction specified in the Trust Agreement, the numerator of
which is one and the denominator of which fraction shall be (1) increased
by the number of any additional Units issued pursuant to Section 2.03
hereof, (2) increased or decreased in connection with an adjustment to the
number of Units pursuant to Section 2.03 and (3) decreased by the number of
any Units redeemed as provided in Section 6.02 hereof. Whenever reference
is made herein to the "interest" of a Unitholder in the Trust or in the
Income and Capital Accounts, it shall mean such fractional undivided
interest represented by the number of Units held of record by such
Unitholder.
(51) "Unitholder" shall mean the registered holder of any Unit,
whether or not in certificated form, as recorded on the books of the
Trustee, his legal representatives and heirs and the successors of any
corporation, partnership or other legal entity which is a registered holder
of any Unit, and, as such, shall be deemed a beneficiary of the Trusts
created by this Indenture to the extent of his or her pro rata share
thereof.
(52) "Unit Value" shall have the meaning assigned to it in Section
6.01.
(53) Words importing singular number shall include the plural number
in each case and vice versa, and words importing persons shall include
corporations and associations, as well as natural persons.
(54) 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.
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ARTICLE II
DEPOSIT OF SECURITIES; ACCEPTANCE OF TRUST; SEPARATE TRUSTS;
FORM AND ISSUANCE OF UNITS
Section2.01. Deposit of Securities. (a) The Depositor, on the date of the
Trust Agreement, has deposited with the Trustee in trust the Securities listed
in the Schedules attached to the Trust Agreement in bearer form 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. The Depositor shall deliver to the Trustee the Securities listed on
said Schedules which were represented by Contract Securities within 10 calendar
days after the date of the Trust Agreement (the "Delivery Period"). If a
contract to buy such Contract Securities is terminated by the seller thereof for
any reason beyond the control of the Depositor or if for any other reason the
Securities to be delivered pursuant to such contract are not delivered to the
Trust by the end of the Delivery Period, the Trustee shall immediately draw on
the Letter of Credit, if any, in its entirety, apply the moneys in accordance
with Section 2.01(d), and the Depositor shall forthwith take the remedial action
specified in Section 3.12. If the Depositor does not take the action specified
in Section 3.12 within 10 calendar days of the end of the Delivery Period, the
Trustee shall forthwith take the action specified in Section 3.12.
(b) From time to time following the Initial Date of Deposit, the Depositor
is hereby authorized, in its discretion, to assign, convey to and deposit with
the Trustee (i) additional Securities, duly endorsed in blank or accompanied by
all necessary instruments of assignment and transfer in proper form (or purchase
contracts relating to Contract Securities), and/or (ii) cash (or a Letter of
Credit in lieu of cash) with instructions to purchase additional Securities, in
an amount equal to the portion of the Unit Value of the Units created by such
deposit attributable to the Securities to be purchased pursuant to such
instructions. Instructions to purchase additional Securities shall be in
writing, and shall specify the name of the Security, CUSIP number, if any,
aggregate amount, price or price range and date to be purchased. The Depositor
may act as broker or agent 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, except by
reason of its own gross negligence, lack of good faith or willful misconduct.
The Depositor, in each case, shall ensure that each deposit of additional
Securities pursuant to this Section shall be, as nearly as is practicable, in
the identical ratio as the Percentage Ratio for such Securities. With respect
to an Index Trust, such 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 Securities in the Trust most under-represented in
the Trust's portfolio in comparison to their weighting in the Trust's Target
Index. The Depositor shall deliver the additional Securities which were not
delivered concurrently with the deposit of additional Securities and which were
represented by Contract Securities within 10 calendar days after such deposit of
additional Securities (the "Additional Securities Delivery Period"). If a
contract to buy such Securities between the Depositor and seller is terminated
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by the seller thereof for any reason beyond the control of the Depositor or if
for any other reason the Securities are not delivered to the Trust by the end of
the Additional Securities Delivery Period for such deposit, the Trustee shall
immediately draw on the Letter of Credit, if any, in its entirety, apply the
moneys in accordance with Section 2.01(d), and the Depositor shall forthwith
take the remedial action specified in Section 3.12. If the Depositor does not
take the action specified in Section 3.12 within 10 calendar days of the end of
the Additional Securities Delivery Period, the Trustee shall forthwith take the
action specified in Section 3.12.
In connection with and at the time of any deposit of additional Securities
pursuant to this section 2.01(b), the Depositor shall replicate Cash (as defined
below) received or receivable by the Trust as of the date of such deposit. For
purposes of this paragraph, "Cash" means, as to the Capital Account, cash or
other property (other than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of the date of the
deposit (other than amounts to be distributed solely to persons other than
holders of Units created by the deposit) and, as to the Income Account, cash or
other property (other than Securities) to be credited to the Income Account
received by the Trust as of the date of the deposit or receivable by the Trust
in respect of a record date for a payment on a Security which has occurred or
will occur before the Trust will be the holder of record of a Security, reduced
by the amount of any cash or other property received or receivable on any
Security allocable (in accordance with the Trustee's calculations of
distributions from the Income Account pursuant to Section 3.05) to a
distribution made or to be made in respect of a Record Date occurring prior to
the deposit. Such replication will be made on the basis of a fraction, the
numerator of which is the number of Units created by the deposit and the
denominator of which is the number of Units which are outstanding immediately
prior to the deposit.
Any contrary authorization in the preceding paragraphs notwithstanding,
deposits of additional Securities made after the 90-day period immediately
following the Initial Date of Deposit (except for deposits made to replace
Failed Contract 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 Percentage Ratio existing immediately prior to such deposit. The provisions
of this paragraph shall not apply to any Trust for which an election to be taxed
as a "regulated investment company" under the United States Internal Revenue
Code of 1986, as amended, has been, or will be, made.
The Depositor is solely responsible for the composition of the Trust
portfolio, and the Trustee shall have no responsibility or liability for such
composition, other than to assure that the identity of the securities received
in settlement of Contract Securities or acquired pursuant to the Depositor's
instructions is correct.
(c) In connection with the deposits described in Section 2.01(a) and (b),
the Depositor has deposited, in the case of Section 2.01(a) deposits, and, prior
to the Trustee accepting a Section 2.01(b) deposit, will deposit, cash and/or
Letter(s) of Credit in an amount sufficient to purchase the Contract Securities
included in such deposit. The terms of any Letter of Credit must
unconditionally allow the Trustee to draw on the full amount of the available
Letter of Credit. The Trustee may deposit such cash or cash drawn on the Letter
of Credit in a non-interest bearing account for a Trust. If any Contract
Security requires settlement in a foreign currency, in connection with the
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deposit of such Contract Security the Depositor will deposit with the Trustee
either an amount of such currency sufficient to settle the contract or a foreign
exchange contract in such amount which settles concurrently with the settlement
of the Contract Security and cash or a Letter of Credit in U.S. dollars
sufficient to perform such foreign exchange contract.
(d) In the event that the purchase of Contract Securities pursuant to any
contract shall not be consummated in accordance with said contract or if the
Securities represented by Contract Securities are not delivered to a Trust in
accordance with Section 2.01(a) or 2.01(b) and the moneys, or, if applicable,
the moneys drawn on the Letter of Credit, deposited by the Depositor are not
utilized for Section 3.12 purchases of Replacement Securities, such funds, to
the extent of the purchase price of Failed Contract Securities for which no
Replacement Securities were acquired pursuant to Section 3.12, plus all amounts
described in the next succeeding sentence, shall be credited to the Capital
Account and distributed pursuant to Section 3.05 to Unitholders of record as of
the Record Date next following the failure of consummation of such purchase.
The Depositor shall deliver to the Trustee, for distribution to Unitholders as
above provided, the pro rata portion of the sales charge levied on the sale of
Units to such Unitholder attributable to such Failed Contract Security. Any
amounts remaining from moneys drawn on the Letter of Credit which are not used
to purchase Replacement Securities shall be paid to the Depositor.
(e) The Trustee is hereby irrevocably authorized to effect registration or
transfer of the Securities in fully registered form to the name of the Trustee
or to the name of its nominee or to hold the Securities in a clearing agency
registered or exempt from registration with the Securities and Exchange
Commission or in a book entry system operated by the Federal Reserve Board.
(f) Notwithstanding anything to the contrary herein, subject to the
requirements set forth in this Section 2.01(f) and unless the Prospectus
otherwise requires, the Depositor may, on any Business Day (the "Trade Date"),
subscribe for additional Units as follows:
(i) Prior to the Evaluation Time on such Business Day, the Depositor
shall provide notice (the "Subscription Notice") to the Trustee, by
telephone or by written communication, of the Depositor's intention to
subscribe for additional Units. The Subscription Notice shall identify the
additional Securities to be acquired (unless such additional Securities are
a precise replication of the then existing portfolio) and shall either (a)
specify the quantity of additional Securities to be deposited by the
Depositor on the settlement date for such subscription or (b) instruct the
Trustee to purchase additional Securities with an aggregate value as
specified in the Subscription Notice.
(ii) Promptly following the Evaluation Time on such Business Day, the
Depositor shall verify with the Trustee the number of additional Units to
be created.
(iii) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver or assign the additional Units
created hereby, the Depositor shall deposit with the Trustee (a) any
additional Securities specified in the Subscription Notice (or contracts to
purchase such additional Securities together with cash or a Letter of
Credit in the amount necessary to settle such contracts) or (b) cash or a
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Letter of Credit in an amount equal to the aggregate value of the
additional Securities specified in the Subscription Notice, and adding and
subtracting the amounts specified in the first and second sentences of
Section 6.01, computed as of the Evaluation Time on the Business Day
preceding the Trade Date divided by the number of Units outstanding as of
the Evaluation Time on the Business Day preceding the Trade Date, times the
number of additional Units to be created.
(iv) On the settlement date for such subscription, the Trustee shall,
in exchange for the Securities and cash or Letter of Credit described
above, deliver to, or assign in the name of or on the order of, the
Depositor the number of Units verified by the Depositor with the Trustee.
Section 2.02. Acceptance of Trust. The Trustee hereby declares that it holds
and will hold each Trust as trustee in trust upon the trusts herein created for
the use and benefit of the Unitholders, subject to the terms and conditions of
this Indenture.
Section 2.03. Issuance of Units. (a) The Trustee hereby acknowledges receipt
of the deposit of the Securities listed in the Schedules to the Trust Agreement
and referred to in Section 2.01 hereof and, simultaneously with the receipt of
said deposit, has recorded on its books the ownership, by the Depositor or such
other person or persons as may be indicated by the Depositor, of the aggregate
number of Units specified in the Trust Agreement and has delivered, or on the
order of the Depositor will deliver, in exchange for such Securities,
documentation evidencing the ownership of the number of Units specified and, if
such Units are represented by a Certificate, such Certificate substantially in
the form above recited, representing the ownership of those Units. The number
of Units may be increased through a split of the Units or decreased through a
reverse split thereof, as directed by the Depositor in writing and upon
surrender of any Certificate evidencing Units to be cancelled, on any day on
which the Depositor is the only Unitholder, which revised number of Units shall
be recorded by the Trustee on its books. The Trustee hereby agrees that on the
date of any deposit of additional Securities it shall acknowledge that such
additional Securities have been deposited with it by recording on its books the
ownership, by the Depositor or such other person or persons as may be indicated
by the Depositor, of the aggregate number of Units to be issued in respect of
such additional Securities so deposited, and shall, if so requested, execute
documentation substantially in the form above recited representing the ownership
of an aggregate number of those Units.
(b) Unless otherwise provided by the Trust Agreement, and at such times as
are permitted by the Trustee, Units may be held in uncertificated form. Units
will be held in uncertificated form unless a Unitholder requests a Certificate
representing his or her Units. The Trustee shall, at the request of the holder
of any Units held in uncertificated form, issue a new Certificate to evidence
such Units and at such time make an appropriate notation in the registration
books of the Trustee. Certificates, if requested, will be issued in
denominations of one Unit, or any whole multiple thereof, subject to a Trust's
minimum investment requirements. Thereafter, Units may again be held in
uncertificated form by surrendering such Certificate to the Trustee for
cancellation. At such time, an appropriate notation will be made in the
registration book of the Trustee to indicate that the Units formerly evidenced
by such canceled Certificate are Units held in uncertificated form. The rights
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set forth in this Indenture of any holder of Units held in uncertificated form
shall be the same of those of any holder of Units represented by a Certificate.
Section 2.04. Separate Trusts. The Trusts created by this Indenture are
separate and distinct trusts for all purposes and the assets of one Trust may
not be commingled with the assets of any other nor shall the expenses of any
Trust be charged against the other. Units representing the ownership of an
undivided fractional interest in one Trust shall not be exchangeable for Units
representing the ownership of an undivided fractional interest in any other.
Section 2.05. Form of Certificates. Each Certificate referred to in
Section 2.03 is, and each Certificate hereafter issued shall be, in
substantially the form hereinabove recited, numbered serially for
identification, in fully registered form, transferable only on the books of the
Trustee as herein provided, executed manually by an authorized officer of the
Trustee and in facsimile by the Chairman, President or one of the Vice
Presidents of the Depositor and dated the date of execution and delivery by the
Trustee.
ARTICLE III
ADMINISTRATION OF FUND
Section 3.01. Initial Cost. Subject to reimbursement as hereinafter provided,
the cost of organizing the Trust and the sale of the Units shall be borne by the
Depositor, provided, however, that the liability on the part of the Depositor
under this Section 3.01 shall not include any fees or other expenses incurred in
connection with the administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the earlier of six months after the Initial
Date of Deposit or the conclusion of the initial offering period (as certified
by the Depositor to the Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is therein specified,
from the Capital Account, and pay to the Depositor the Depositor's reimbursable
expenses of organizing the Trust in an amount certified to the Trustee by the
Depositor. In no event shall the amount paid by the Trustee to the Depositor
for the Depositor's reimbursable expenses of organizing the Trust exceed the
estimated per Unit amount of organization costs set forth in the Prospectus for
the Trust multiplied by the number of Units of the Trust outstanding at the
earlier of six months after the Initial Date of Deposit or the conclusion of the
initial offering period; nor shall the Depositor be entitled to or request
reimbursement for expenses of organizing the Trust incurred after the earlier of
six months after the Initial Date of Deposit or the conclusion of the initial
offering period. If the cash balance of the Capital Account is insufficient to
make such withdrawal, the Trustee shall, as directed by the Depositor, sell
Securities identified by the Supervisor, or distribute to the Depositor
Securities having a value, as determined under Section 5.01 as of the date of
distribution, sufficient for such reimbursement provided that such distribution
is permissible under applicable laws and regulations. Securities sold or
distributed to the Depositor to reimburse the Depositor pursuant to this Section
shall be sold or distributed by the Trustee, to the extent practicable, in the
Percentage Ratio then existing. The reimbursement provided for in this section
shall be for the account of Unitholders of record at the earlier of six months
after the Initial Date of Deposit or the conclusion of the initial offering
period. Any assets deposited with the Trustee in respect of the expenses
reimbursable under this Section 3.01 shall be held and administered as assets of
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the Trust for all purposes hereunder. Any cash which the Depositor has
identified as to be used for reimbursement of expenses pursuant to this Section
3.01 shall be held by the Trustee, without interest, and reserved for such
purposes and, accordingly, prior to the earlier of six months after the Initial
Date of Deposit or the conclusion of the initial offering period, shall not be
subject to distribution or, unless the Depositor otherwise directs, used for
payment of redemptions in excess of the per Unit amount payable pursuant to the
next sentence. If a Unitholder redeems Units prior to the earlier of six months
after the Initial Date of Deposit or the conclusion of the initial offering
period, the Trustee shall pay the Unitholder, in addition to the Unit Value of
the tendered Units (in the computation of which the expenses reimbursable
pursuant to this Section shall have been deducted), unless otherwise directed by
the Depositor, an amount equal to the estimated per Unit cost of organizing the
Trust set forth in the Prospectus, or such lower revision thereof most recently
communicated to the Trustee by the Depositor, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in the Trust is
insufficient for such payments, the Trustee shall have the power to sell
Securities in accordance with Section 6.02. As used herein, the Depositor's
reimbursable expenses of organizing the Trust shall include the cost of the
initial preparation and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the Indenture, and other documents
relating to a Trust, printing of Certificates, Securities and Exchange
Commission and state blue sky registration fees, the costs of the initial
valuation of the portfolio and audit of a Trust, the initial fees and expenses
of the Trustee, and legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of prospectuses (including
preliminary prospectuses), expenses incurred in the preparation and printing of
brochures and other advertising materials and any other selling expenses.
Section 3.02. Income Account. The Trustee shall collect the dividends or
other like cash distributions on the Securities in each Trust as such becomes
payable (including all moneys representing penalties for the failure to make
timely payments on the Securities, or as liquidated damages for default or
breach of any condition or term of the Securities or of the underlying
instrument relating to any Securities and other income attributable to a Failed
Contract Security for which no Replacement Security has been obtained pursuant
to Section 3.12 hereof) and credit such income to a separate account for each
Trust to be known as the "Income Account."
Any distributions received by the Trustee in a form other than cash (other
than a non-taxable distribution of the shares of the distributing entity) shall
be dealt with in the manner described in Section 3.11 and shall be retained or
disposed of by a Trust according to those provisions. The proceeds of sale
credited to the Income Account of the Trust. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any such
sale.
Section 3.03. Capital Account. The Securities in each Trust and all moneys
other than amounts credited to the Income Account, received by the Trustee in
respect of the Securities in each Trust shall be credited to a separate account
for each Trust to be known as the "Capital Account" (except for moneys deposited
by the Depositor or moneys pursuant to draws on the Letter of Credit for
purchase of Contract Securities pursuant to Section 2.01, which shall be
separately held in trust by the Trustee for such purpose and shall not be
credited to the Capital Account except as provided in Section 2.01(d)).
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The Trustee shall give prompt written notice to the Depositor and the
Evaluator of all amounts credited to or withdrawn from a Capital Account and the
balance in such Capital Account after giving effect to such credit or
withdrawal.
Section 3.04. Reserve Account. From time to time the Trustee shall withdraw
from the cash on deposit in an Income Account or Capital Account of a Trust 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 such 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 Unitholders 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 charges, liabilities or obligations, then it shall
promptly deposit such amounts in the account from which withdrawn or if such
Trust shall have terminated or shall be in the process of termination, the
Trustee shall distribute to each Unitholder such Unitholder's interest in the
Reserve Account in accordance with Section 9.02.
Section 3.05. Deductions and Distributions. (a) On or immediately after each
Record Date, the Trustee shall satisfy itself as to the adequacy of the Reserve
Account, making any further credits thereto as may appear appropriate in
accordance with Section 3.04 and shall then with respect to each Trust:
(i) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to itself
individually the amounts that it is at the time entitled to receive
pursuant to Section 7.04;
(ii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to counsel, as
hereinafter provided for, an amount equal to unpaid fees and expenses, if
any, of such counsel pursuant to Section 3.08, as certified to by the
Depositor; and
(iii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to, or reserve
for, the Depositor the amount that it is entitled to receive pursuant to
Section 3.13.
(b) (i) On each Distribution Date, the Trustee shall distribute to each
Unitholder of record at the close of business on the preceding Record Date an
amount per Unit equal to such Unitholder's Income Distribution (as defined
below) plus such Unitholder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to purchase Contract
Securities or to purchase Securities contracted for pursuant to the Depositor's
purchase instructions) computed as of the close of business on the Record Date
immediately preceding such Distribution Date, provided, however, the Trustee
shall not be required to make a distribution from the Capital Account unless the
amount available for distribution shall equal at least $1.00 per 100 Units.
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The Trust shall provide the following distribution elections: (1)
distributions to be made by mail addressed to the post office address of the
Unitholder as it appears on the registration books of the Trustee or (2) if
provided for in the Prospectus for a Trust, the following reinvestment option:
The Trustee will, for any Unitholder 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 the Record Date for the first distribution to which such
election shall apply (the "Reinvestment Notice Date"), reinvest such
Unitholder's distribution from the Income and Capital Accounts in Units of
the Trust, purchased from the Depositor, to the extent 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 as may be described in the prospectus for the
Trust. If, for any reason, the Depositor does not have Units of the Trust
available for purchase, the Trustee shall distribute such Unitholder's
distribution from the Income and Capital Accounts in the manner provided in
the immediately preceding clause (1). 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.
Any Unitholder who does not effectively elect reinvestment in Units of
his or her respective Trust pursuant to the preceding paragraph shall
receive a cash distribution in the manner provided in clause (1) of the
second preceding paragraph.
(ii) For the purposes of this Section 3.05, the Unitholder's "Income
Distribution" shall be equal to such Unitholder's pro rata share of the
balance in the Income Account calculated on the basis of a fraction (the
numerator of which is one and the denominator of which is the total number
of Distribution Dates per year) of the estimated annual income to the Trust
for the ensuing twelve months computed as of the close of business on the
Record Date immediately preceding such Income Distribution after deduction
of (1) the fees and expenses then deductible pursuant to Section 3.05(a)
and (2) the Trustee's estimate of other expenses properly 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, provided, however, in connection with the
first Income Account Distribution Date such distribution will be calculated
based on the actual cash balance in the Income Account rather than on the
basis of the abovementioned fraction of the estimated annual income to the
Trust for the ensuing twelve months.
In the event that the amount on deposit in the Income Account is not
sufficient for the payment of the amount intended to be distributed to
Unitholders on the basis of the aforesaid computation, the Trustee is
authorized to advance its own funds and cause to be deposited in and
credited to the Income Account such amounts as may be required to permit
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payment of the related distribution to be made as aforesaid and shall be
entitled to be reimbursed, without interest, out of income payments
received by the Trust subsequent to the date of such advance. Any such
advance shall be reflected in the Income Account until repaid.
(iii) The amount to be so distributed to each Unitholder shall be that
pro rata share of the balance of the Income and Capital Accounts, computed
as set forth herein, as shall be represented by the Units registered in the
name of such Unitholder. In the computation of each such pro rata 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 Capital Account shall be held in the same manner as other
amounts subsequently deposited in each of such accounts, respectively.
(iv) Principal and income attributable to Contract Securities which
the Depositor shall have declared by written notice to the Trustee to be
Failed Contract Securities for which Replacement Securities are not to be
substituted pursuant to Section 3.12 hereof shall be distributed to
Unitholders of record as of the close of business on the Record Date next
following the failure of consummation of such purchase and shall be
distributed not more than 120 days after the receipt of such notice by the
Trustee or at such earlier time in such manner as the Trustee in its sole
discretion deems to be in the best interest of Unitholders.
(v) For the purpose of distributions as herein provided, the
Unitholders 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 Unitholder of record. Nothing herein shall be construed to
prevent the payment of amounts from the Income Account and the Capital
Account to individual Unitholders by means of one check, draft or other
instrument or device provided that the appropriate statement of such
distribution shall be furnished therewith as provided in Section 3.06
hereof.
Section 3.06. Distribution Statements. With each distribution from the Income
or Capital Accounts of a Trust 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,
each 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 Unitholder of a Trust a statement setting forth, with
respect to such calendar year and with respect to such Trust:
(A) as to the Income Account:
(1) the amount of income received on the Securities (including
income received as a portion of the proceeds of any disposition of
Securities);
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(2) the amounts paid for purchases of Replacement Securities
pursuant to Section 3.12 or for purchases of securities otherwise
pursuant hereto, if any, and for redemptions pursuant to Section 6.02;
(3) the deductions, if any, from the Income Account for payment
into the Reserve Account;
(4) the deductions for applicable taxes and fees and expenses of
the Trustee, the Depositor, the Evaluator, the Supervisor, counsel,
auditors and any other expenses paid by the Trust;
(5) the amounts reserved for purchases of Contract Securities,
for purchases made pursuant to Section 3.12 or for purchases of
securities otherwise pursuant hereto, if any;
(6) the deductions for payment of the Depositor's expenses of
maintaining the registration of the Trust Units, if any;
(7) the aggregate distributions to Unitholders; and
(8) the balance remaining after such deductions and
distributions, expressed both as a total dollar amount and as a dollar
amount per Unit outstanding on the last Business Day of such calendar
year;
(B) as to the Capital Account:
(1) the net proceeds received due to sale, maturity, redemption,
liquidation or disposition of any of the Securities, excluding any
portion thereof credited to the Income Account;
(2) the amount paid for purchases of Replacement Securities
pursuant to Section 3.12 or for purchases of securities otherwise
pursuant hereto, if any, and for redemptions pursuant to
Section 6.02;
(3) the deductions, if any, from the Capital Account for
payments into the Reserve Account;
(4) the deductions for payment of applicable taxes and fees and
expenses of the Trustee, the Depositor, the Evaluator, the Supervisor,
counsel, auditors and any other expenses paid by the Trust;
(5) the deductions for payment of the Depositor's expenses of
organizing the Trust pursuant to Section 3.01;
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(6) the amounts reserved for purchases of Contract Securities,
for purchases made pursuant to Section 3.12 or for purchases of
securities otherwise pursuant hereto, if any;
(7) the deductions for payment of Deferred Sales Charge and
Creation and Development Fee, if any;
(8) the deductions for payment of the Depositor's expenses of
maintaining the registration of the Trust Units, if any;
(9) the aggregate distributions to Unitholders; and
(10) 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 the Securities held as of the last Business Day of
such calendar year and a list which identifies all Securities sold or
other Securities acquired during such calendar year, if any;
(2) the number of Units outstanding on the last Business Day of
such calendar year;
(3) the Unit Value based on the last Trust Evaluation of such
Trust made during such calendar year; and
(4) the amounts actually distributed during such calendar year
from the Income and Capital Accounts, separately stated, expressed
both as total dollar amounts and as dollar amounts per Unit
outstanding on the Record Dates for such distributions.
Section 3.07. Sale of Securities. (a) If necessary, in order to maintain the
sound investment character of a Trust, the Depositor may direct the Trustee to
sell or liquidate Securities in such Trust at such price and time and in such
manner as shall be determined by the Depositor, provided that the Supervisor has
determined, if appropriate, that any one or more of the following conditions
exist with respect to the Securities to be sold:
(i) that there has been a default in the payment of dividends, after
declared and when due and payable;
(ii) that any action or proceeding has been instituted at law or
equity seeking to restrain or enjoin the payment of dividends, or that
there exists any legal question or impediment affecting such Securities or
the payment of dividends from the same;
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(iii) that there has occurred any breach of covenant or warranty in any
document relating to the issuer of the Securities which would adversely
affect either immediately or contingently the payment of dividends on the
Securities, or the general credit standing of the issuer or otherwise
impair the sound investment character of such Securities;
(iv) that there has been a default in the payment of dividends,
principal of or income or premium, if any, on any other outstanding
obligations of the issuer of such Securities;
(v) that the price of the Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Supervisor,
as evidenced in writing to the Trustee, the retention of such Securities
would be detrimental to the Trust and to the interest of the Unitholders;
(vi) that all of the Securities in the Trust will be sold pursuant to
termination of the Trust pursuant to Section 9.02 hereof;
(vii) that such sale is required due to Units tendered for redemption;
(viii) that there has been a public tender offer made for a Security or
a merger or acquisition is announced affecting a Security, and that in the
opinion of the Supervisor the sale or tender of the Security is in the best
interest of the Unitholders;
(ix) with respect to an Index Trust, that the Security has been
removed from the Trust's Target Index;
(x) with respect to an Index Trust, that the Security is over-
represented in the Trust's portfolio in comparison to such Security's
weighting in the Trust's Target Index;
(xi) if the Trust has not elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended, that the sale of such Securities is required in order
to prevent the Trust from being deemed an association taxable as a
corporation for federal income tax purposes; or
(xiii) if the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, that such sale is necessary or advisable (i) to maintain the
qualification of the Trust as a regulated investment company or (ii) to
provide funds to make any distribution for a taxable year in order to avoid
imposition of any excise taxes on the Trust.
(b) In the event a Security is sold pursuant to Section 3.07(a)(v) as a
direct result of serious adverse credit factors affecting the issuer of such
Security and the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, then the Depositor may, but is not obligated, to direct the
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reinvestment of the proceeds of the sale of such Security in any other
securities which meet the criteria necessary for inclusion in such Trust on the
Initial Date of Deposit.
(c) In the event a Security is sold pursuant to Section 3.07(a)(ix) and the
Trust has elected to be taxed as a "regulated investment company" as defined in
the United States Internal Revenue Code of 1986, as amended, the Depositor may
direct the reinvestment of the proceeds of the sale of such Security, to the
extent practicable, into any security which replaces such Security as a
component of the Trust's Target Index or, if no security so replaces such
Security, into any other Securities which are under-represented in the Trust's
portfolio in comparison to their weighting in the Trust's Target Index. In the
event a Security is sold pursuant to Section 3.07(a)(x) and the Trust has
elected to be taxed as a "regulated investment company" as defined in the United
States Internal Revenue Code of 1986, as amended, the Depositor may direct the
reinvestment of the proceeds of the sale of such Security, to the extent
practicable, into any other Securities which are under-represented in the
Trust's portfolio in comparison to their weighting in the Trust's Target Index.
Without limiting the generality of the foregoing, in determining whether such
reinvestment is practicable, the Depositor may, but is not obligated to,
specifically consider the ability of the Trust to reinvest such proceeds into
round lots of a Security.
(d) Upon receipt of such direction from the Depositor, upon which the
Trustee shall rely, the Trustee shall proceed to sell or liquidate the specified
Securities in accordance with such direction, and upon the receipt of the
proceeds of any such sale or liquidation, after deducting therefrom any fees and
expenses of the Trustee connected with such sale or liquidation and any
brokerage charges, taxes or other governmental charges shall deposit such net
proceeds in the applicable Capital Account.
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 or liquidate
any Securities under this Section 3.07.
Section 3.08. Counsel. The Depositor may employ from time to time as it may
deem necessary a firm of attorneys for any legal services that may be required
in connection with the disposition of underlying securities pursuant to
Section 3.07. The fees and expenses of such counsel shall be paid by the
Trustee from the Income and Capital Accounts of the appropriate Trust as
provided for in Section 3.05(f) hereof.
Section 3.09. Notice and Sale by Trustee. If at any time a dividend (once due
and payable) on any of the Securities shall not have been paid, the Trustee
shall notify the Depositor thereof. If within thirty days after such
notification the Depositor has not given any instruction to sell or to hold or
has not taken any other action in connection with such Securities, the Trustee
may in its discretion 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.
Section 3.10. Liability, Indemnification and Succession of Depositor. (a) The
Depositor shall be under no liability to the Unitholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Indenture or for errors in judgment, but shall be liable only for its own
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willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder. The Depositor may rely in good faith on any paper, order, notice,
list, affidavit, receipt, opinion, endorsement, assignment, draft or any other
document of any kind prima facie properly executed and submitted to it by the
Trustee, counsel or any other persons pursuant to this Indenture.
(b) Each Trust shall pay and hold the Depositor harmless from and against
any loss, liability or expense incurred in acting as Depositor of such Trust
other than by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder. The Depositor shall not be under any
obligation to appear in, prosecute or defend any legal action which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor may in its discretion undertake any such action which it may deem
necessary or desirable in respect of this Indenture and the rights and duties of
the parties hereto and the interests of the Unitholders 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
concerned and shall be paid directly by the Trustee out of the Income and
Capital Accounts of such Trust.
(c) The covenants, provisions and agreements herein contained shall in every
case be binding upon any successor to the business of any Depositor. In the
event of an assignment by any 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. Any Depositor may transfer all or substantially
all of its assets to a corporation or partnership which carries on the business
of such Depositor, if at the time of such transfer such successor duly assumes
all the obligations of such Depositor under this Indenture.
Section 3.11. Notice to Depositor. In the event that the Trustee shall have
been notified at any time of any action to be taken or proposed to be taken by
holders of the Securities (including but not limited to the making of any
demand, direction, request, giving of any notice, consent or waiver or the
voting with respect to any matter relating to the Securities), 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 or refrain from taking any
action so as to insure that the Securities are voted as closely as possible in
the same manner and the same general proportion, with respect to all issues, as
are shares of such Securities that are held by owners other than the Trust.
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, or to exchange securities,
for Trust Securities, the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected notwithstanding such rejection or
without an initial offer, any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if securities or property, by
the Trustee unless the Depositor advises the Trustee to keep such securities,
cash or properties. The Depositor may rely on the Supervisor in so advising the
Trustee. The cash received in such exchange and cash proceeds of any such sales
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shall, in the following priority, be (1) with respect to an Index Trust,
reinvested, to the extent practicable, into any Securities which are under-
represented in the Trust's portfolio in comparison to their weighting in the
Trust's Target Index or (2) with respect to all Trusts, distributed to
Unitholders in the manner set forth in Section 3.05. Without limiting the
generality of the foregoing, in determining whether reinvestment is practicable
with respect to an Index Trust, the Depositor may, but is not obligated to,
specifically consider the ability of the Index Trust to reinvest such proceeds
into round lots of a Security.
Neither the Depositor nor the Trustee shall be liable to any person for any
action or failure to take action with respect to this Section 3.11.
Section 3.12. Replacement Securities. In the event that any contract to
purchase any Contract Security is not consummated in accordance with its terms
(such Contract Security being herein referred to as a "Failed Contract
Security"), the Depositor may instruct the Trustee in writing either to effect a
buy-in in accordance with the rules of the market place where the Failed
Contract Securities were purchased or its clearing house or to purchase a
replacement security (the "Replacement Security") which has been selected by the
Depositor out of funds held by the Trustee pursuant to Section 3.03. Purchases
of Replacement Securities will be made subject to the conditions set forth
below:
(a) The Replacement Securities shall be securities as originally
selected for deposit in that series of the Trust;
(b) The purchase of the Replacement Securities shall not adversely
affect the federal income tax status of the Trust;
(c) The purchase price of the Replacement Securities shall not exceed
the total amount of cash deposited, or the amount available under the
Letter of Credit deposited, by the Depositor at the time of the deposit of
the Failed Contract Security;
(d) The written instructions of the Depositor shall (i) identify the
Replacement Securities to be purchased, (ii) state that the contract to
purchase, if any, to be entered into by the Trustee is satisfactory in form
and substance and (iii) state that the foregoing conditions of clauses (a)
through (d) have been satisfied with respect to the Replacement Securities;
and
(e) The Replacement Securities shall be purchased within 30 days
after the deposit of the Failed Contract Security.
Upon satisfaction of the foregoing conditions with respect to any
Replacement Securities which shall be certified by the Depositor in the written
instruction to the Trustee identifying the Replacement Securities, the Trustee
shall enter into the contract to purchase such Replacement Securities and take
all steps reasonably necessary to complete the purchase thereof. Whenever a
Replacement Security is acquired by the Trustee pursuant to the provisions of
this Section, the Trustee will, as agent for the Depositor, not later than five
days after such acquisition, mail to each Unitholder a notice of such
acquisition, including an identification of the Securities eliminated and the
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Securities acquired. Amounts in respect of the purchase price thereof on
account of principal shall be paid out of and charged against the cash
deposited, or the amounts available under the Letter of Credit deposited, by the
Depositor at the time of the deposit of the Failed Contract Security. In the
event that no purchase of Replacement Securities shall be made pursuant to this
Section 3.12, funds held for such purchase shall be distributed in accordance
with Section 2.01(d). Any excess of the purchase price of a Failed Contract
Security over the purchase price of its corresponding Replacement Security shall
be credited to the Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any
purchase made pursuant to, or any failure to make any purchase authorized by,
this Section 3.12. The Depositor shall not be liable for any failure to instruct
the Trustee to purchase any Replacement Securities, nor shall the Trustee or
Depositor be liable for errors of judgment in respect of this Section 3.12;
provided, however, that this provision shall not protect the Depositor or the
Trustee against any liability to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of its reckless disregard of its obligations and duties
hereunder.
Section 3.13. Compensation for Services Provided. As compensation for
portfolio supervisory services in its capacity as Supervisor, evaluation
services in its capacity as Evaluator and for providing bookkeeping and other
administrative services of a character described in Section 26(a)(2)(C) of the
Investment Company Act of 1940, the Depositor shall be paid an annual fee in the
amount per Unit set forth in the Trust Agreement, which fee shall accrue daily
and be computed on the number of Units outstanding as of January 1 of such year
except during the year or years in which an initial offering period as
determined in Section 5.01 of this Indenture occurs, in which case the fee for a
month is based on the number of Units outstanding at the end of such month (such
annual fee to be pro rated for any calendar year in which the Depositor provides
services during less than the whole of such year), but in no event shall such
compensation when combined with all compensation received from other series of
the Fund for providing such services in any calendar year exceed the aggregate
cost to the Depositor for providing such services. Such compensation may, from
time to time, be adjusted 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
of Shelter" or similar index, if such index should no longer be published. The
consent or concurrence of any Unitholder hereunder shall not be required for any
such adjustment or increase. Such compensation shall be paid by the Trustee,
upon receipt of invoice therefor from the Depositor, upon which, as to the cost
incurred by the Depositor of providing services hereunder the Trustee may rely,
and shall be charged against the Income and/or Capital Accounts, in accordance
with Section 3.05.
If the cash balance in the Income and Capital Accounts shall be
insufficient to provide for amounts payable pursuant to this Section 3.13, the
Trustee shall have the power to sell (a) Securities from the current list of
Securities designated to be sold pursuant to Section 6.02 hereof, or (b) 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 3.13.
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Any moneys payable to the Depositor pursuant to this Section 3.13 shall be
secured by a lien on the related Trust prior to the interest of Unitholders, but
no such lien shall be prior to any lien in favor of the Trustee under the
provisions of Section 7.04 herein.
Section 3.14. Deferred Sales Charge. If the Prospectus related to a Trust
specifies a deferred sale charge, the Trustee shall, on each Deferred Sales
Charge Payment Date and as permitted by such Prospectus, withdraw from the
Capital Account an amount per Unit equal to the Deferred Sales Charge Payment
and credit such amount to a special non-Trust account maintained at the Trustee
out of which the deferred sales charge will be distributed to the Depositor (the
"Depositor's Account"). If the balance in the Capital Account is insufficient
to make any such withdrawal, the Trustee shall, as directed by the Depositor,
either advance funds in an amount equal to the proposed withdrawal and be
entitled to reimbursement of such advance upon the deposit of additional moneys
in the Capital Account, or sell Securities and credit the proceeds thereof to
such special Depositor's Account, provided, however, that the aggregate amount
which the Trustee shall be required to advance at any time for the payment of
deferred sales charge and creation and development fee shall not exceed $15,000.
If a Unitholder redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related Prospectus, on the
Redemption Date, deduct from the Redemption Price payable to such Unitholder an
amount equal to the unpaid portion of the deferred sales charge and distribute
such amount to such special Depositor's Account. The Depositor may at any time
instruct the Trustee in writing to distribute to the Depositor amounts
previously credited to the Depositor's Account. Amounts to be credited to the
Depositor's Account with respect to each Deferred Sales Charge Payment are due
and payable to the Depositor on the related Deferred Sales Charge Payment Date.
If a Trust is terminated pursuant to Section 7.01(g), the Depositor agrees to
reimburse Unitholders for any Deferred Sales Charge Payments collected by the
Depositor to which it is not entitled.
If any Deferred Sales Charge Payment Date is not a Business Day, that
Deferred Sales Charge Payment Date shall be deemed to be the next Business Day.
The term "Deferred Sales Charge Payment" shall mean a fraction of the total
maximum deferred sales charge specified in the Prospectus, the numerator of
which is one and the denominator of which is equal to the total number of
Deferred Sales Charge Payment Dates.
Section 3.15. Creation and Development Fee. If the Prospectus related to a
Trust specifies a creation and development fee, the Trustee shall, on such date
or dates set forth in the Prospectus for a Trust withdraw from the Capital
Account an amount equal to either the accrued and unpaid creation and
development fee as of such date (for Trusts in which the applicable Prospectus
provides that the creation and development accrue on a daily basis) or the
entire creation and development fee (for Trusts in which the applicable
Prospectus provides that the creation and development fee be assessed at the
conclusion of the initial offering period, as certified by the Depositor to the
Trustee) and credit such amount to a special non-Trust account designated by the
Depositor out of which the creation and development fee will be distributed to
the Depositor (the "Creation and Development Account"). For Trusts in which the
applicable Prospectus provides for daily accrual of the creation and development
fee, the creation and development fee will accrue on a daily basis at an annual
rate as set forth in such Prospectus for the Trust based on a percentage of the
average daily Unit Value of the Trust. For Trusts in which the applicable
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Prospectus provides that the entire creation and development fee will be
assessed at the conclusion of the initial offering period, the reimbursement
provided for in this section shall be for the account of Unitholders of record
at the conclusion of the initial offering period and shall have no effect on the
Unit Value prior to such date. If the balance in the Capital Account is
insufficient to make any such withdrawal, the Trustee shall, as directed by the
Depositor, either advance funds in an amount equal to the proposed withdrawal
and be entitled to reimbursement of such advance upon the deposit of additional
moneys in the Capital Account, or sell Securities and credit the proceeds
thereof to such special Depositor's Account to the extent payable pursuant to
this Section 3.15, provided, however, that the aggregate amount which the
Trustee shall be required to advance at any time for the payment of deferred
sales charge and creation and development fee shall not exceed $15,000. If the
Trust is terminated pursuant to Section 7.01(g), the Depositor agrees to
reimburse Unitholders for any amounts of the Creation and Development Fee
collected by the Depositor to which it is not entitled. All advances made by
the Trustee pursuant to this Section shall be secured by a lien on the Trust
prior to the interest of Unitholders. Notwithstanding the foregoing, the
Depositor shall not receive any amount of Creation and Development Fee which
exceeds the maximum amount per Unit stated in the Prospectus. For Trusts in
which the applicable Prospectus provides for daily accrual of the creation and
development fee, the Depositor shall notify the Trustee, not later than ten
Business Days prior to the date on which the Depositor anticipates that the
maximum amount of the creation and development fee the Depositor may receive has
been accrued and shall also notify the Trustee as of the date when the maximum
amount of the creation and development fee has been accrued. The Trustee shall
have no responsibility or liability for damages or loss resulting from any error
in the information in the preceding sentence. The Depositor agrees to reimburse
the Trust and any Unitholder any amount of Creation and Development Fee it
receives which exceeds the amount which the Depositor may receive under
applicable laws, regulations and rules.
Section 3.16. Reclaiming Foreign Taxes. The Trustee shall use reasonable
efforts to reclaim or recoup any amounts of non-U.S. tax paid by the Trust or
withheld from income received by the Trust to which the Trust may be entitled as
a refund.
Section 3.17. Foreign Currency Exchange. Unless the Depositor shall otherwise
direct, whenever funds are received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in respect of a sale of
Securities, concurrently with the contract of the sale for the Security (in the
latter case the foreign exchange contract to have a settlement date coincident
with the relevant contract of sale for the Security), the Trustee shall enter
into a foreign exchange contract for the conversion of such funds to U.S.
dollars pursuant to the direction of the Depositor. The Trustee shall have no
liability for any loss or depreciation resulting from such action taken pursuant
to such directions.
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ARTICLE IV
SUPERVISOR
Section 4.01. Liability of Supervisor. The Supervisor shall be under no
liability to the Unitholders for any action taken or for refraining from the
taking of any action in good faith pursuant to this Indenture or for errors in
judgment, but shall be liable only for its own willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder. The Supervisor may rely in
good faith on any paper, order, notice, list, affidavit, receipt, opinion,
endorsement, assignment, draft or any other document of any kind prima facie
properly executed and submitted to it by the Trustee, counsel or any other
persons pursuant to this Indenture and in furtherance of its duties.
Section 4.02. Resignation and Removal of Supervisor; Successor. (a) The
Supervisor may resign and be discharged hereunder, by executing an instrument in
writing resigning as Supervisor and filing the same with the Depositor and the
Trustee, not less than 60 days before the date specified in such instrument
when, subject to Section 4.02(e), such resignation is to take effect. Upon
receiving such notice of resignation, the Depositor or, if no Depositor is
acting, the Trustee, shall use its best efforts to appoint a successor
supervisor having qualifications and at a rate of compensation satisfactory to
the Depositor or, if the appointment is made by the Trustee, the Trustee. Such
appointment shall be made by written instrument executed by the Depositor or the
Trustee, as applicable, one copy of which shall be delivered to the resigning
Supervisor and one copy to the successor supervisor. The Depositor or, if no
Depositor is acting, the Trustee, may remove the Supervisor at any time upon 30
days' written notice and appoint a successor supervisor having qualifications
and at a rate of compensation satisfactory to the Depositor or, if the removal
and appointment is made by the Trustee, the Trustee. Such appointment shall be
made by written instrument executed by the Depositor or the Trustee, as
applicable, in duplicate, one copy of which shall be delivered to the Supervisor
so removed and one copy to the successor supervisor. Notice of such resignation
or removal and appointment of a successor supervisor shall be mailed by the
Trustee to each Unitholder then of record.
(b) Any successor supervisor appointed hereunder shall execute, acknowledge
and deliver to the Depositor and the Trustee an instrument accepting such
appointment hereunder, and such successor supervisor 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
Supervisor herein and shall be bound by all the terms and conditions of this
Indenture.
(c) In case at any time the Supervisor shall resign and no successor
supervisor shall have been appointed and have accepted appointment within 30
days after notice of resignation has been received by the Depositor and the
Trustee, the Supervisor may forthwith apply to a court of competent jurisdiction
for the appointment of a successor supervisor. Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a successor
supervisor.
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(d) Any corporation into which the Supervisor hereunder may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Supervisor hereunder shall be a party, shall be
the successor supervisor 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 the Supervisor may seek to retain certain powers, rights
and privileges theretofore obtaining for any period of time following such
merger or consolidation, to the contrary notwithstanding.
(e) Any resignation or removal of the Supervisor and appointment of a
successor supervisor pursuant to this Section shall become effective upon
acceptance of appointment by the successor supervisor as provided in subsection
(b) hereof.
(f) The Trustee shall have no responsibility for, or liability in respect
of, any appointment or removal made by the Depositor, or for the rate of
compensation determined by the Depositor, provided, however, that the Trustee
may require, and shall be authorized conclusively to rely upon, a certificate of
the Depositor or opinion of counsel satisfactory to the Trustee, that the rate
of compensation to be paid is permissible under applicable laws and regulations.
ARTICLE V
EVALUATION OF SECURITIES; EVALUATOR
Section 5.01. Evaluation of Securities. (a) The Evaluator shall determine
separately, and shall promptly furnish to the Trustee and the Depositor upon
request, the value of each issue of Securities (including Contract Securities)
("Evaluation") as of the Evaluation Time (i) on each Business Day during the
period which the Units are being offered for sale to the public and (ii) on any
other day on which a Trust Evaluation is to be made pursuant to Section 6.01 or
which is requested by the Depositor or the Trustee. As part of the Trust
Evaluation, the Evaluator shall determine separately and promptly furnish to the
Trustee and the Depositor upon request the Evaluation of each issue of
Securities initially deposited in a Trust on the Initial Date of Deposit. The
Evaluator's determination of the offering prices of the Securities on the
Initial Date of Deposit shall be included in the Schedules attached to the Trust
Agreement.
(b) During the initial offering period of a Trust (as determined by the
Depositor) such Evaluation shall be made in the following manner: if the
Securities are listed on a national or foreign securities exchange or traded on
the Nasdaq Stock Market, Inc., such Evaluation shall generally be based on the
last available closing sale price on or immediately prior to the Evaluation Time
on the exchange or market which is the principal market therefor, which shall be
deemed to be the New York Stock Exchange if the Securities are listed thereon
(unless the Evaluator deems such price inappropriate as a basis for evaluation)
or, if there is no such available closing sale price on such exchange or market
at the last available asked price of the Securities. If the Securities are not
listed on such an exchange or traded on Nasdaq or, if so listed and the
principal market therefor is other than on such exchange or market, or there is
no such available sale price on such exchange or market, such Evaluation shall
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generally be based on the following methods or any combination thereof whichever
the Evaluator deems appropriate: (i) on the basis of the current asked price on
the over-the-counter market (unless the Evaluator deems such price inappropriate
as a basis for evaluation), (ii) if asked prices are not available for the
Securities, on the basis of asked price for comparable securities, (iii) by
determining the valuation of the Securities on the asked side of the market by
appraisal or (iv) by any combination of the above. If the Trust holds
Securities denominated in a currency other than U.S. dollars, the Evaluation of
such Security shall be converted to U.S. dollars based on current offering side
exchange rates (unless the Evaluator deems such prices inappropriate as a basis
for valuation). As used herein, the closing sale price is deemed to mean the
most recent closing sale price on the relevant securities exchange at or
immediately prior to the Evaluation Time. For each Evaluation, the Trustee
shall also confirm and furnish to the Depositor the calculation of the Trust
Evaluation to be computed pursuant to Section 6.01.
(c) After the initial offering period of Units of a Trust (as determined by
the Depositor), Evaluation of the Securities shall be made in the manner
described in Section 5.01(b), on the basis of the bid side value of the relevant
currency exchange rate expressed in U.S. dollars and, except in those cases in
which the Securities are listed on a national or foreign securities exchange or
traded on Nasdaq and the last available sale prices are utilized, on the basis
of the last available bid price of the Securities. In addition, the Evaluator
may reduce the Evaluation of each Security which is principally traded outside
of the United States by the amount of any liquidation costs (other than
brokerage costs incurred on any national securities exchange) and any capital
gains or other taxes which would be incurred by the Trust upon the sale of such
Security, such taxes being computed as if the Security were sold on the date of
the Evaluation.
Section 5.02. Information for Unitholders. For the purpose of permitting
Unitholders to satisfy any reporting requirements of applicable federal or state
tax law, the Evaluator shall make available to the Trustee and the Trustee shall
transmit to any Unitholder upon request any determinations made by the Evaluator
pursuant to Section 5.01.
Section 5.03. Liability of Evaluator. The Trustee, the Depositor and the
Unitholders may rely on any evaluation furnished by the Evaluator and shall have
no responsibility for the accuracy thereof. The determinations made by the
Evaluator hereunder shall be made in good faith upon the basis of the best
information available to it. The Evaluator shall be under no liability to the
Trustee, the Depositor or the Unitholders for errors, provided, however, that
this provision shall not protect the Evaluator against any liability to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder.
Section 5.04. Resignation and Removal of Evaluator; Successor. (a) The
Evaluator may resign and be discharged hereunder, by executing an instrument in
writing resigning as Evaluator and filing the same with the Depositor and the
Trustee, not less than 60 days before the date specified in such instrument
when, subject to Section 5.04(e), such resignation is to take effect. Upon
receiving such notice of resignation, the Depositor or, if no Depositor is
acting, the Trustee, shall use its best efforts to appoint a successor Evaluator
having qualifications and at a rate of compensation satisfactory to the
Depositor or, if the appointment is made by the Trustee, the Trustee. Such
appointment shall be made by written instrument executed by the Depositor or the
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Trustee, as applicable, one copy of which shall be delivered to the resigning
Evaluator and one copy to the successor Evaluator. The Depositor or, if no
Depositor is acting, the Trustee, may remove the Evaluator at any time upon 30
days' written notice and appoint a successor evaluator having qualifications and
at a rate of compensation satisfactory to the Depositor or, if the removal and
appointment is made by the Trustee, the Trustee. Such appointment shall be made
by written instrument executed by the Depositor or the Trustee, as applicable,
in duplicate, one copy of which shall be delivered to the Evaluator so removed
and one copy to the successor evaluator. Notice of such resignation or removal
and appointment of a successor Evaluator shall be mailed by the Trustee to each
Unitholder then of record.
(b) Any successor evaluator appointed hereunder shall execute, acknowledge
and deliver to the Depositor and the Trustee an instrument accepting such
appointment hereunder, and such successor evaluator without any further act,
deed or conveyance shall become vested with all the rights, powers, duties and
obligations of its predecessor hereunder with like effect as if originally named
Evaluator herein and shall be bound by all the terms and conditions of this
Indenture.
(c) In case at any time the Evaluator shall resign and no successor
evaluator shall have been appointed and have accepted appointment within 30 days
after notice of resignation has been received by the Depositor and the Trustee,
the Evaluator may forthwith apply to a court of competent jurisdiction for the
appointment of a successor evaluator. Such court may thereupon after such
notice, if any, as it may deem proper and prescribe, appoint a successor
evaluator.
(d) Any corporation into which the Evaluator hereunder may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which the Evaluator hereunder shall be a party, shall be the
successor evaluator under this 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 the Evaluator may seek to retain certain powers, rights and privileges
theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
(e) Any resignation or removal of the Evaluator and appointment of a
successor evaluator pursuant to this Section shall become effective upon
acceptance of appointment by the successor evaluator as provided in subsection
(b) hereof.
(f) The Trustee shall have no responsibility for, or liability in respect
of, any appointment or removal made by the Depositor, or for the rate of
compensation determined by the Depositor, provided, however, that the Trustee
may require, and shall be authorized conclusively to rely upon, a certificate of
the Depositor or opinion of counsel satisfactory to the Trustee, that the rate
of compensation to be paid is permissible under applicable laws and regulations.
Section 5.05. Valuation of Listed Securities for which Closing Prices are
Available; Foreign Currency Conversions. Unless the Trust Agreement otherwise
provides, the Trustee shall provide to the Evaluator the closing sale price of
any Security listed on a national or foreign securities exchange or traded on
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the Nasdaq Stock Market, Inc., based on information available to the Trustee
from a reporting service approved by the Evaluator, which closing price shall be
used for evaluations made pursuant to Section 5.01 (unless the Evaluator deems
such price inappropriate as a basis for evaluation). Neither the Trustee, the
Evaluator nor the Depositor shall be liable for any loss or depreciation
resulting from any errors contained in the information received from any such
reporting service.
The Evaluator shall instruct the Trustee as to the method whereby
calculations of U.S. dollar equivalents are to be made for purpose of net asset
value computations and otherwise as may be required hereunder. The Trustee
shall have no liability for any loss or depreciation resulting from any
calculation of U.S. dollar equivalent made pursuant to the Evaluator's
instruction.
ARTICLE VI
TRUST EVALUATION, REDEMPTION, PURCHASE, TRANSFER,
INTERCHANGE OR REPLACEMENT OF UNITS
Section 6.01. Trust Evaluation. As of the Evaluation Time (a) on the last
Business Day of each year, (b) on the day on which any Unit is tendered for
redemption and (c) on any other day desired by the Trustee or requested by the
Depositor, the Trustee shall: Add (i) all moneys on deposit in a Trust
(excluding (1) cash, cash equivalents or Letters of Credit deposited pursuant to
Section 2.01 hereof for the purchase of Contract Securities, unless such cash or
Letters of Credit have been deposited in the Income and Capital Accounts because
of failure to apply such moneys to the purchase of Contract Securities pursuant
to the provisions of Sections 2.01, 3.02 and 3.03 hereof and (2) moneys credited
to the Reserve Account pursuant to Section 3.04 hereof), plus (ii) the aggregate
Evaluation of all Securities (including Contract Securities and additional
Securities for which purchase contracts have been entered into pursuant to the
Depositor's instructions pursuant to clause (ii) of the first sentence of
Section 2.01(b), less the purchase price of such contracts) on deposit in such
Trust (such Evaluation to be made on the basis of the aggregate underlying value
of the Securities as determined in Section 5.01(b) for the purpose of computing
redemption value of Units as set forth in Section 6.02 hereof), plus (iii) all
other income from the Securities (including dividends receivable on the
Securities trading ex-dividend as of the date of such valuation) as of the
Evaluation Time on the date of such Evaluation together with all other assets of
such Trust. For each such computation there shall be deducted from the sum of
the above (i) amounts representing any applicable taxes or charges payable out
of the respective Trust and for which no deductions shall have previously been
made for the purpose of addition to the Reserve Account, (ii) amounts
representing estimated accrued expenses of such Trust including but not limited
to unpaid fees and expenses of the Trustee, the Evaluator, the Supervisor, the
Depositor and counsel, in each case as reported by the Trustee to the Depositor
on or prior to the date of computation, (iii) amounts representing unpaid
organization costs, (iv) if the Prospectus for a Trust provides that the
creation and development fee, if any, accrues on a daily basis, amounts
representing unpaid accrued creation and development fees, (v) if the Prospectus
for a Trust provides that the deferred sales charge, if any, accrues on a daily
basis, amounts representing unpaid accrued deferred sales charge, and (vi) any
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moneys identified by the Trustee, as of the date of such computation, as held
for distribution to Unitholders of record as of an Income or Capital Account
Record Date, or for payment of the Redemption Price of Units tendered, prior to
such date. The resulting figure is herein called a "Trust Evaluation." The
value of the pro rata share of each Unit of the respective Trust determined on
the basis of any such evaluation shall be referred to herein as the "Unit
Value." Amounts receivable by the Trust in foreign currency shall be reported
to the Evaluator who shall convert the same to U.S. dollars based on current
exchange rates, in the same manner as provided in Section 5.01(b) or 5.01(c), as
applicable, for the conversion of the valuation of foreign Securities, and the
Evaluator shall report such conversion with each Evaluation made pursuant to
Section 5.01.
For each day on which the Trustee shall make a Trust Evaluation it shall
also determine Unit Value for such day. Such Unit Value shall be determined by
dividing said Trust Evaluation by the number of Units outstanding on such day.
The Depositor is authorized to obtain from MFQS a unit investment trust
ticker symbol for a Trust and to contract with Nasdaq for the dissemination of
the Trust Evaluation computed by the Trustee through the MFQS, provided,
however, that no such contract shall affect the Trustee's duties or liabilities
without its prior consent. When and as directed by the Depositor, the Trustee
shall cause the Trust Evaluation to be communicated to MFQS for such purpose.
The Depositor and Trustee shall be reimbursed from the respective Trust for any
cost or expense incurred in connection with the obtaining of the ticker symbol
and the communication to MFQS and its dissemination of the Trust Evaluation.
Neither the Depositor nor the Trustee shall be liable for any error, omission or
other action of Nasdaq in connection with the dissemination of the Trust
Evaluation, and the Depositor and the Trustee shall be indemnified by the
respective Trust and held harmless against any loss, liability, claim or expense
resulting from any error, omission or other action of Nasdaq. In no event shall
the Trustee be liable to any person for special, indirect, or consequential
damages of any kind whatsoever resulting from or in connection with the
dissemination of the Trust Evaluation through MFQS whether or not the Trustee
has been advised as to the possibility of such damages and regardless of the
form of action in which any such claim for damages may be made.
Section 6.02. Redemptions by Trustee; Purchases by Depositor. Any Unit
tendered for redemption by a Unitholder or his duly authorized attorney to the
Trustee at its unit investment trust division office, currently at 101 Barclay
Street, New York, New York 10286, whether in the form of a Certificate or in
uncertificated form tendered by means of an appropriate request for redemption
in form approved by the Trustee shall be redeemed by the Trustee no later than
the seventh calendar day following the day on which tender for redemption is
made, provided that if such day of redemption is not a Business Day, then such
Unit shall be redeemed on the first Business Day prior thereto (being herein
called the "Redemption Date"). Subject to payment by such Unitholder of any tax
or other governmental charges which may be imposed thereon, such redemption is
to be made by payment on the Redemption Date of cash equivalent to the Unit
Value, determined by the Trustee as of the Evaluation Time on the date of
tender, multiplied by the number of Units registered in the name of the
tendering Unitholder (herein called the "Redemption Price"). Units received for
redemption by the Trustee on any day after the Evaluation Time will be held by
the Trustee until the next Business Day and will be deemed to have been tendered
on such day for redemption at the Redemption Price computed on that day. Units
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will be deemed to be "tendered" to the Trustee when the Trustee is in physical
receipt of the Certificate or Certificates representing such Units and/or such
documentation as is required to accomplish transfers of Units pursuant to
Section 6.03 hereof.
Subject to the restrictions set forth in the Prospectus of a Trust,
Unitholders of a Trust who redeem that minimum number of Units of a Trust set
forth in the Prospectus for such Trust may request a distribution in-kind of (i)
such Unitholder's pro rata portion of each of the Securities listed on a United
States securities exchange ("U.S. listed securities") in such Trust, in whole
shares, and (ii) cash equal to such Unitholder's pro rata portion of the Income
and Capital Accounts as follows: (x) a pro rata portion of the net proceeds of
sale of the non U.S. listed Securities and Securities representing any
fractional shares included in such Unitholder's pro rata share of the Securities
and (y) such other cash as may properly be included in such Unitholder's pro
rata share of the sum of the cash balances of the Income and Capital Accounts in
an amount equal to the Unit Value determined on the basis of a Trust Evaluation
made in accordance with Section 6.01 determined by the Trustee on the date of
tender less amounts determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 6.05 with respect to Rollover Unitholders, to the extent
possible, distributions of Securities pursuant to an in-kind redemption of Units
shall be made by the Trustee through the distribution of each of the Securities
in book-entry form to the account of the Unitholder's bank or broker-dealer at
the Depository Trust Company. Any distribution in-kind will be reduced by
customary transfer and registration charges.
Notwithstanding anything herein to the contrary, in the event that any
tender of Units pursuant to this Section 6.02 would result in the disposition by
the Trustee of less than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the Sponsors as required to
make such cash available.
The Trustee may in its discretion, and shall when so directed by the
Depositor, suspend the right of redemption for Units of a Trust or postpone the
date of payment of the Redemption Price therefor for more than seven calendar
days following the day on which tender for redemption is made (1) for any period
during which the New York Stock Exchange is closed other than customary weekend
and holiday closings or during which trading on the New York Stock Exchange is
restricted; (2) for any period during which an emergency exists as a result of
which disposal by such 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 period as the Securities and
Exchange Commission may by order permit, and 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 Unitholder 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 Unitholder not later than the close of business on the
Redemption Date of an amount not less than the Redemption Price which would
otherwise be payable by the Trustee to such Unitholder.
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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 division
office of the Trustee in the manner provided in the first paragraph of this
Section 6.02.
If the Depositor does not elect to purchase any Units of a Trust tendered
to the Trustee for redemption, or if Units are being tendered by the Depositor
for redemption, that portion of the Redemption Price which represents interest
shall be withdrawn from the Income Account of such Trust to the extent
available. The balance paid on any redemption, including accrued interest, if
any, shall be withdrawn from the Capital Account of such Trust to the extent
that funds are available for such purpose. If such available balance shall be
insufficient, the Trustee shall sell such of the Securities held in such Trust,
currently designated for such purposes by the Supervisor, as the Trustee in its
sole discretion shall deem necessary. The Trustee is authorized to advance
funds to the Trust for the payment of the Redemption Price and to reimburse
itself the amount of such advance from the proceeds of Securities sold or when
sufficient funds are next available in the Capital Account. In the event that
funds are withdrawn from such Capital Account for payment of accrued interest,
such Capital Account shall be reimbursed for such funds so withdrawn when
sufficient funds are next available in such Income Account.
The Supervisor, who may consult with the Depositor, shall designate the
Securities held in each Trust 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 Supervisor shall for any reason fail to
designate Securities for such purpose the Trustee, in its sole discretion, may
designate Securities for such purposes. The net proceeds of any sales of
Securities representing principal shall be credited to the Capital Account of a
Trust and the proceeds of such sales representing accrued interest shall be
credited to the Income Account of a Trust.
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 6.02. Certificates evidencing Units redeemed pursuant to this
Section 6.02 shall be cancelled by the Trustee and the Units evidenced by such
Certificates shall be terminated by such redemptions. In the event that a
Certificate shall be tendered representing a number of Units greater than those
requested to be redeemed by the Unitholder, the Trustee shall issue to such
Unitholder, unless such Unitholder requests such Units be uncertificated, upon
payment of any tax or charges of the character referred to in the third
paragraph of Section 6.03, a new Certificate evidencing the Units representing
the balance of the Certificate so tendered and not redeemed.
Section 6.03. Transfer or Interchange of Units. Units will be held in
uncertificated form unless the Unitholder requests in writing to have such Units
be held in certificated form. Units may be transferred by the registered holder
thereof by presentation and surrender of such Units and Certificates, if issued,
at the unit investment trust division office of the Trustee, properly endorsed
or accompanied by a written instrument or instruments of transfer in form
satisfactory to the Trustee and executed by the Unitholder or his authorized
attorney, whereupon new Units or a new registered Certificate or Certificates
for the same number of Units of the same Trust executed by the Trustee and the
Depositor will be issued in exchange and substitution therefor and Units
surrendered shall be cancelled by the Trustee. The registered holder of any
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Unit may transfer such Unit by the presentation of transfer instructions and
Certificates, if issued, to the Trustee at the unit investment trust division
office of the Trustee accompanied by such documents as the Trustee deems
necessary to evidence the authority of the person making such transfer and
executed by the registered holder or his authorized attorney, whereupon the
Trustee shall make proper notification of such transfer on the registration
books of the Trustee. Unitholders holding their Units in uncertificated form
may at any time request the Trustee to issue Certificates for such Units and
Unitholders holding Certificates may at any time request that their Units be
held in uncertificated form. The Trustee shall, upon receipt of such request in
form satisfactory to it, accompanied by Certificates, if any, issue such
Certificates, or cancel such Certificate and make such appropriate notations on
its books, as may be requested by such Unitholder; provided that the Trustee is
entitled to specify the minimum denomination of any Certificate issued.
Certificates issued pursuant to this Indenture are interchangeable for one or
more other Certificates in an equal aggregate number of Units of the same Trust
and all Certificates issued shall be issued in denominations of one Unit or any
multiple thereof as may be requested by the Unitholder.
The Trustee may deem and treat the person in whose name any Unit shall be
registered upon the books of the Trustee as the owner of such Unit for all
purposes hereunder and the Trustee shall not be affected by any notice to the
contrary, nor be liable to any person or in any way for so deeming and treating
the person in whose name any Unit shall be so registered.
A sum sufficient to pay any tax or other governmental charge that may be
imposed in connection with any such transfer or interchange shall be paid by the
Unitholder to the Trustee. The Trustee may require a Unitholder to pay a
reasonable fee which the Trustee in its sole discretion shall determine for each
new Certificate issued on any such transfer or interchange.
All Certificates cancelled pursuant to this Indenture shall be disposed of
by the Trustee without liability on its part.
Section 6.04. Certificates Mutilated, Destroyed, Stolen or Lost. In case any
Certificate shall become mutilated or be destroyed, stolen or lost, the Trustee
shall execute and deliver a new Certificate in exchange and substitution
therefor upon the holder's furnishing the Trustee with proper identification and
satisfactory indemnity, complying with such other reasonable regulations and
conditions as the Trustee may prescribe and paying such expenses as the Trustee
may incur. Any mutilated Certificate shall be duly surrendered and cancelled
before any new Certificate shall be issued in exchange and substitution
therefor. Upon the issuance of any new Certificate a sum sufficient to pay any
tax or other governmental charge and the fees and expenses of the Trustee may be
imposed. Any such new Certificate issued pursuant to this Section shall
constitute complete and indefeasible evidence of ownership in a Trust, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
In the event a Trust has terminated or is in the process of termination,
the Trustee may, instead of issuing a new Certificate in exchange and
substitution for any Certificate which shall have become mutilated or shall have
been destroyed, stolen or lost, make the distributions in respect of such
mutilated, destroyed, stolen or lost Certificate (without surrender thereof
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except in the case of a mutilated Certificate) as provided in Section 9.02
hereof if the Trustee is furnished with such security or indemnity as it may
require to save it harmless, and in the case of destruction, loss or theft of a
Certificate, evidence to the satisfaction of the Trustee of the destruction,
loss or theft of such Certificate and of the ownership thereof.
Section 6.05. Rollover of Units. (a) If the Depositor shall offer a
subsequent series of a Trust (the "New Series"), the Trustee shall, if so
directed and at the time specified by the Depositor, send a form of election to
Unitholders (which may be included in the notice sent to Unitholders specified
in Section 9.02) whereby Unitholders, whose redemption distribution would be in
an amount sufficient to purchase at least one Unit of the New Series, may elect
to have their Units redeemed through an in-kind distribution in the manner
provided in Section 6.02, the Securities included in the in-kind distribution
sold, and the cash proceeds applied by the Distribution Agent to purchase Units
of the New Series, all as hereinafter provided. The Trustee shall honor
properly completed election forms returned to the Trustee, accompanied by any
Certificate evidencing Units tendered for redemption or a properly completed
redemption request with respect to uncertificated Units, by its close of
business five days prior to the Special Redemption Date.
All Units so tendered by a Unitholder (a "Rollover Unitholder") shall be
redeemed and canceled on the Special Redemption Date. Subject to payment by
such Rollover Unitholder of any tax or other governmental charges which may be
imposed thereon, such redemption is to be made through an in-kind distribution
pursuant to Section 6.02 by distribution of cash and/or Securities to the
Distribution Agent on the Special Redemption Date (herein called the "Rollover
Distribution"). Any Securities that are made part of the Rollover Distribution
shall be valued for purposes of the redemption distribution as of the Special
Redemption Date.
All Securities included in a Unitholder's Rollover Distribution shall be
sold by the Distribution Agent on the Special Redemption Date specified in the
Prospectus pursuant to the Depositor's direction, and the Distribution Agent may
employ the Depositor as broker or agent in connection with such sales. For such
brokerage services, the Depositor shall be entitled to compensation at its
customary rates, provided however, that its compensation shall not exceed the
amount authorized by applicable Securities laws and regulations. In the event
the Depositor does not direct the manner in which Securities are to be sold, the
Securities shall be sold in such manner as the Distribution Agent, in its sole
discretion, shall determine. The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by reason of any sale made
pursuant to this Section.
Upon each trade date for sales of Securities included in the Rollover
Unitholder's Rollover Distribution, the Distribution Agent shall, as agent for
such Rollover Unitholder, enter into a contract with the Depositor to purchase
from the Depositor Units of the New Series (if any), at the public offering
price for such Units on the Special Redemption Date. Such contract shall
provide for purchase of the maximum number of Units of the New Series whose
purchase price is equal to or less than the cash proceeds held by the
Distribution Agent for the Unitholder on such day (including therein the
proceeds anticipated to be received in respect of Securities traded on such day
net of all brokerage fees, governmental charges and any other expenses incurred
in connection with such sale), to the extent Units are available for purchase
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from the Depositor. In the event a sale of Securities included in the Rollover
Unitholder's Rollover Distribution shall not be consummated in accordance with
its terms, the Distribution Agent shall apply the cash proceeds held for such
Unitholder as of the settlement date for the purchase of Units of the New Series
to purchase the maximum number of Units which such cash balance will permit, and
the Depositor agrees that the settlement date for Units whose purchase was not
consummated as a result of insufficient funds will be extended until cash
proceeds from the Rollover Distribution are available in a sufficient amount to
settle such purchase. If the Unitholder's Rollover Distribution will produce
insufficient cash proceeds to purchase all of the Units of the New Series
contracted for, the Depositor agrees that the contract shall be rescinded with
respect to the Units as to which there was a cash shortfall without any
liability to the Rollover Unitholder or the Distribution Agent. Any cash
balance remaining after such purchase shall be distributed within a reasonable
time to the Rollover Unitholder by check mailed to the address of such
Unitholder on the registration books of the Trustee. Units of the New Series
will be uncertificated unless and until the Rollover Unitholder requests a
certificate. Any cash held by the Distribution Agent shall be held in a non-
interest bearing account which will be of benefit to the Distribution Agent in
accordance with normal banking procedures. Neither the Trustee nor the
Distribution Agent shall have any responsibility or liability for 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.
(b) Notwithstanding the foregoing, the Depositor may, in its discretion at
any time, decide not to offer a New Series in the future, and if so, this
Section 6.05 shall be inoperative.
(c) The Distribution Agent shall receive no fees for performing its duties
hereunder. The Distribution Agent shall, however, be entitled to receive
reimbursement from the Trust for any and all expenses and disbursements to the
same extent as the Trustee is permitted reimbursement hereunder.
ARTICLE VII
TRUSTEE
Section 7.01. General Definition of Trustee's Liabilities, Rights and Duties.
The Trustee shall in its discretion undertake such action as it may deem
necessary at any and all times to protect each Trust and the rights and
interests of the Unitholders thereof 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 Capital
Accounts of such Trust and the payment of such costs and expenses shall be
secured by a prior lien on such Trust.
In addition to and notwithstanding the other duties, rights, privileges and
liabilities of the Trustee as otherwise set forth the liabilities of the Trustee
are further defined as follows:
(a) all moneys deposited with or received by the Trustee hereunder
related to a Trust shall be held by it without interest in trust as part of
such Trust or the Reserve Account of such Trust until required to be
disbursed in accordance with the provisions of this Indenture and such
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moneys will be segregated by separate recordation on the trust ledger of
the Trustee so long as such practice preserves a valid preference under
applicable law, or if such preference is not so preserved, the Trustee
shall handle such moneys in such other manner as shall constitute the
segregation and holding thereof in trust within the meaning of the
Investment Company Act of 1940;
(b) the Trustee shall be under no liability for any action taken in
good faith on any appraisal, paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, evaluation, endorsement, assignment,
resolution, draft or other document, whether or not of the same kind, prima
facie properly executed, or for the disposition of moneys, Securities or
certificates pursuant to this Indenture, or in respect of any evaluation
which it is required to make or is required or permitted to have made by
others under this Indenture, or otherwise, except by reason of its own
gross negligence, lack of good faith or willful misconduct, provided that
the Trustee shall not in any event be liable or responsible for any
evaluation made by the Evaluator. The Trustee may construe any of the
provisions 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 and the Unitholders. The Trustee
shall in no event be deemed to have assumed or incurred any liability, duty
or obligation to any Unitholder or the Depositor, other than as expressly
provided for herein;
(c) the Trustee shall not be responsible for or in respect of the
recitals herein, the validity or sufficiency of this Indenture or for the
due execution hereof by the Depositor, the Evaluator or the Supervisor, 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 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 (except for the
due execution thereof by the Trustee) 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 Unitholder or the Depositor, the
Evaluator or the Supervisor, 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, the Evaluator or the
Supervisor;
(d) the Trustee shall not be under any obligation to appear in,
prosecute or defend any action, which in its opinion may involve it in
expense or liability, unless, as often as required by the Trustee, it shall
be furnished with reasonable security and indemnity against such expense or
liability, and any pecuniary cost of the Trustee from such actions shall be
deductible from and a charge against the Income and Capital Accounts of the
affected Trust;
(e) the Trustee may employ agents, attorneys, accountants and
auditors and shall not be answerable for the default or misconduct of any
such agents, attorneys, accountants or auditors if such agents, attorneys,
accountants or auditors shall have been selected with reasonable care. The
Trustee shall be fully protected in respect of any action under this
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Indenture taken, or suffered, in good faith by the Trustee, in accordance
with the opinion of counsel, which may be counsel to the Depositor
acceptable to the Trustee. The fees and expenses charged by such agents,
attorneys, accountants or auditors shall constitute an expense of the
Trustee reimbursable from the Income and Capital Accounts of the affected
Trust as set forth in Section 7.04 hereof;
(f) if at any time the Depositor shall fail to undertake or perform
any of the duties which by the terms of this Indenture are required by it
to be undertaken or performed, or such Depositor shall become incapable of
acting or 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: (1) appoint a successor depositor
who shall act hereunder in all respects in place of such Depositor which
successor shall be satisfactory to the Trustee, and which may be
compensated at rates deemed by the Trustee to be reasonable under the
circumstances, by deduction ratably from the Income Account of the affected
Trust or, to the extent funds are not available in such Account, from the
Capital Account of the affected Trust 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 (2) act hereunder in its own discretion without
appointing any successor depositor and receive additional compensation at
rates determined as provided in clause (1); or (3) terminate and liquidate
the affected Trust in the manner provided in Section 9.02;
(g) if (i) the value of any Trust as shown by any Trust Evaluation
pursuant to Section 6.01 hereof shall be less than 40% of the aggregate
principal amount of Securities initially deposited in such Trust, the
Trustee may in its discretion, and shall when so directed by the Depositor,
terminate this Indenture and the Trust created hereby and liquidate such
Trust, in such manner as the Depositor shall direct, or, if the Depositor
does not so direct, in such manner as the Trustee determines in its
discretion, (ii) within ninety days from the time that a Trust's
registration statement has first become effective under the Securities Act
of 1933, as amended, the net worth of such Trust declines to less than
$100,000 or such Trust is terminated, the Depositor shall refund, on demand
and without deduction, all sales charges to each person who purchased Units
of such Trust, and the Trustee shall liquidate the Securities then held by
such Trust and distribute the proceeds thereof to the Unitholders of such
Trust, or (iii) in the event that redemptions by the Depositor or any
underwriter of Units of a Trust constituting a part of the Units not
theretofore sold to the public results in such Trust having a net worth of
less than 40% of the principal amount of the Securities initially deposited
in such Trust, the Trustee shall terminate such Trust and distribute the
assets thereof to the Unitholders of such Trust and the Depositor shall
refund, on demand and without deduction, all sales charges to each person
who purchased Units of such Trust from the Depositor or from any
underwriter or dealer participating in the distribution.
(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
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of any Trust which it may be required to pay under any present or future
law of the United States of America or of any other taxing authority having
jurisdiction in the premises. For all such taxes and charges and for any
expenses, including counsel 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 Capital Accounts of the affected Trust,
and the payment of such amounts so paid by the Trustee shall be secured by
a lien on such Trust prior to the interests of the Unitholders;
(i) except as provided in Section 3.01, 3.03 and 3.13 hereof, no
payment to a Depositor or to any principal underwriter (as defined in the
Investment Company Act of 1940) for any Trust or to any affiliated person
(as so defined) or agent of a Depositor or such underwriter shall be
allowed as an expense except for payment of such reasonable amounts as the
Securities and Exchange Commission may prescribe as compensation for
performing bookkeeping and other administrative services of a character
normally performed by the Trustee;
(j) the Trustee except by reason of its own gross negligence 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;
(k) The Trustee in its individual or any other capacity may become an
owner or pledgee of, or be an underwriter or dealer in respect of,
obligations issued by the same issuer (or an affiliate of such issuer) 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 rights and powers as if it were not the Trustee hereunder;
(l) The Trust may include a letter or letters of credit issued by the
Trustee in its individual capacity for the account of the Depositor, and
the Trustee may otherwise deal with Depositor with the same rights and
powers as if it were not the Trustee hereunder; and
(m) The Trustee is authorized to appoint as co-trustee of any Trust a
trust company affiliated with the Trustee to perform the functions of
custodian and receiving and paying agent.
Section 7.02. Books, Records and Reports. The Trustee shall keep proper books
of record and account of all the transactions of each Trust under this Indenture
at its unit investment trust division office including a record of the name and
address of, and the Units issued by each Trust and held by, every Unitholder,
and such books and records of each Trust shall be open to inspection by any
Unitholder of such Trust at all reasonable times during the usual business
hours.
Unless the Depositor determines that such an audit is not required, the
account of each Trust shall be audited not less than annually by independent
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public accountants designated from time to time by the Depositor and reports of
such accountants shall be furnished by the Trustee, upon request, to
Unitholders.
If provided for in the Prospectus for a Trust, the Trustee shall pay, or
reimburse to the Depositor, the expenses related to the updating of the Trust's
registration statement, to the extent of legal fees, typesetting fees,
electronic filing expenses and regulatory filing fees. Such expenses shall be
paid from the Income Account, or to the extent funds are not available in such
Account, from the Capital Account, against an invoice or invoices therefor
presented to the Trustee by the Depositor. By presenting such invoice or
invoices, the Depositor shall be deemed to certify, upon which certification the
Trustee is authorized conclusively to rely, that the amounts claimed therein are
properly payable pursuant to this paragraph. The Depositor shall provide the
Trustee, from time to time as requested, an estimate of the amount of such
expenses, which the Trustee shall use for the purpose of estimating the accrual
of Trust expenses. The amount paid by the Trust pursuant to this paragraph in
each year shall be separately identified in the annual statement provided to
Unitholders. The Depositor shall assure that the Prospectus for the Trust
contains such disclosure as shall be necessary to permit payment by the Trust of
the expenses contemplated by this paragraph under applicable laws and
regulations. The provisions of this paragraph shall not limit the authority of
the Trustee to pay, or reimburse to the Depositor or others, such other or
additional expenses as may be determined to be payable from the Trust as
provided herein.
The Trustee shall make such annual or other reports as may from time to
time be required to be filed by the Trustee under any applicable state or
federal statute or rule or regulation thereunder.
Section 7.03. Indenture and List of Securities on File. The Trustee shall
keep a certified copy or duplicate original of this Indenture on file at its
unit investment trust division office available for inspection at all reasonable
times during the usual business hours by any Unitholder, together with a current
list of the Securities in each Trust.
Section 7.04. Compensation. For services performed under this Indenture the
Trustee shall be paid an annual fee in the amount per Unit set forth in the
Trust Agreement, which fee shall accrue daily and be computed on the largest
number of Units outstanding during the calendar year except during the initial
offering period as determined in Section 5.01 of this Indenture, in which case
the fee is calculated based on the largest number of Units outstanding during
the month preceding the Monthly Record Date on which the compensation is paid
(such annual fee to be prorated for any calendar year in which the Trustee
provides services during less than the whole of such year). The Trustee may
from time to time adjust its compensation as set forth above provided that total
adjustment upward does not, at the time of such adjustment, exceed the
percentage of the total increase, after the date hereof, in consumer prices for
services as measured by the United States Department of Labor Consumer Price
Index entitled "All Services Less Rent of Shelter" or similar index, if such
index should no longer be published. The consent or concurrence of any
Unitholder hereunder shall not be required for any such adjustment or increase.
Such compensation shall be charged in installments by the Trustee against the
Income and Capital Accounts of each Trust at the times specified in Section
3.05; provided, however, that such compensation shall be deemed to provide only
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for the usual, normal and proper functions undertaken as Trustee pursuant to
this Indenture. The Trustee shall also charge the Income and Capital Accounts
of each Trust for any and all expenses and disbursements incurred hereunder,
including license fees, if any, expenses incurred in printing and mailing
quarterly, semi-annual or annual communications to Unitholders if the Prospectus
so provides, legal and auditing expenses, and for any extraordinary services
performed by the Trustee hereunder relating to such Trust. Such expenses may
include an amount payable to the Trustee reflecting the cost to the Trustee of
advancing funds to the Trust, such amount to be computed on the average balance
of advances made to the Trust during the year and current short-term interest
rates.
The Trustee shall be indemnified ratably by the affected Trusts and held
harmless against any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of the 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 Capital
Accounts of the affected Trust shall be insufficient to provide for amounts
payable pursuant to this Section 7.04, the Trustee shall have the power to sell
(i) Securities of the affected Trust from the Securities designated to be sold
pursuant to Section 6.02 hereof, or (ii) if no such Securities have been so
designated, such Securities of the affected Trust 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 7.04.
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 7.04. Any moneys payable to the Trustee pursuant to this
Indenture shall be secured by a prior lien on the affected Trust.
Section 7.05. Removal and Resignation of Trustee; Successor. The following
provisions shall provide for the removal and resignation of the Trustee and the
appointment of any successor trustee:
(a) the Trustee or any trustee or trustees hereafter appointed may
resign and be discharged of a Trust created by this Indenture, by executing
an instrument in writing resigning as Trustee of such Trust and filing same
with the Depositor and mailing a copy of a notice of resignation to all
Unitholders then of record, not less than sixty days before the date
specified in such instrument when, subject to Section 7.05(e), such
resignation is to take effect. Upon receiving such notice of resignation,
the Depositor shall promptly appoint a successor trustee as hereinafter
provided, by written instrument, in duplicate, one copy of which shall be
delivered to the resigning Trustee and one copy to the successor trustee.
In case at any time the Trustee shall not meet the requirements set forth
in Section 7.06 hereof, or shall become incapable of acting, or if a court
having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Trustee in an involuntary case, or the Trustee
shall commence a voluntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or any
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) for the Trustee or for any substantial part of its
property shall be appointed, or the Trustee shall generally fail to pay its
debts as they become due, or shall fail to meet such written standards for
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the Trustee's performance as shall be reasonably established from time to
time by the Depositor, or if the Depositor determines in good faith that
there has occurred either (1) a material deterioration in the
creditworthiness of the Trustee or (2) one or more grossly negligent acts
on the part of the Trustee with respect to a Trust, the Depositor, upon
sixty days' prior written notice, may remove the Trustee and appoint a
successor trustee, as hereinafter provided, by written instrument, in
duplicate, one copy of which shall be delivered to the Trustee so removed
and one copy to the successor trustee. Notice of such resignation or
removal of a trustee and appointment of a successor trustee shall be mailed
by the successor trustee, promptly after its acceptance of such
appointment, to each Unitholder then of record;
(b) any successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Depositor and to the retiring Trustee an
instrument accepting such appointment hereunder, and such successor trustee
without any further act, deed or conveyance shall become vested with all
the rights, powers, duties and obligations of its predecessor hereunder
with like effect as if originally named Trustee herein and shall be bound
by all the terms and conditions of this Indenture. No successor trustee
shall be liable for the acts or omissions of its predecessor. 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
Securities 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;
(c) in case at any time the Trustee shall resign and no successor
trustee shall have been appointed and have accepted appointment within
thirty days after notice of resignation has been received by the Depositor,
the retiring Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee;
(d) any entity into which any trustee hereunder may be merged or with
which it may be consolidated, or any entity 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; and
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(e) any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in
subsection (b) hereof. The Trustee's and each successor trustee's right to
indemnification shall survive its resignation or removal.
Section 7.06. Qualifications of Trustee. The Trustee 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 $5,000,000.
ARTICLE VIII
RIGHTS OF UNITHOLDERS
Section 8.01. Beneficiaries of Trust. By the purchase and acceptance or other
lawful delivery and acceptance of any Unit, whether certificated or not, of a
Trust the Unitholder shall be deemed to be a beneficiary of such Trust created
by this Indenture and vested with all right, title and interest in such Trust to
the extent of the Units set forth and evidenced by such Certificate or held in
uncertificated form, subject to the terms and conditions of this Indenture and
of such Certificate.
Section 8.02. Rights, Terms and Conditions. In addition to the other rights
and powers set forth in the other provisions and conditions of this Indenture
the Unitholders shall have the following rights and powers and shall be subject
to the following terms and conditions:
(a) a Unitholder may at any time prior to the Evaluation Time on the
date on which a Trust is terminated tender his Units or his Certificate(s)
if held in certificated form (including any temporary Certificate or other
evidence of ownership of Units of such Trust, issued by the Trustee or the
Depositor) to the Trustee for redemption in accordance with Section 6.02;
(b) the death or incapacity of any Unitholder shall not operate to
terminate this Indenture or a Trust to which the Certificate relates 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 a Trust, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them. Each
Unitholder 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; and
(c) no Unitholder shall have any right to vote or in any manner
otherwise control the operation and management of a Trust, or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates which may have been issued, be
construed so as to constitute the Unitholders from time to time as partners
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or members of an association; nor shall any Unitholder ever be under any
liability to any third persons by reason of any action taken by the parties
to this Indenture, or any other cause whatsoever.
ARTICLE IX
ADDITIONAL COVENANTS; MISCELLANEOUS PROVISIONS
Section 9.01. Amendments. (a) This Indenture may be amended from time to time
by the parties hereto or their respective successors, without the consent of any
of the Unitholders, (i) to cure any ambiguity or to correct or supplement any
provision contained hereon which may be defective or inconsistent with any other
provision contained herein; or (ii) to make such other provision in regard to
matters or questions arising hereunder as shall not adversely affect the
interests of the Unitholders; provided, however, that the parties hereto may not
amend this Indenture so as to (1) increase the number of Units issuable
hereunder above the maximum number set forth in Section 2.03 of this Indenture
except as provided in Section 6.04 hereof or such lesser amount as may be
outstanding at any time during the term of this Indenture or (2) permit the
deposit or acquisition hereunder of interest-bearing obligations or other
securities either in addition to or in substitution for any of the Securities.
(b) Except for the amendments, changes or modifications as provided in
Section 9.01(a) hereof, neither the parties hereto nor their respective
successors shall consent to any other amendment, change or modification of this
Indenture without the giving of notice and the obtaining of the approval or
consent of Unitholders representing at least 66 2/3% of the Units then
outstanding of the affected Trust. Nothing contained in this Section 9.01(b)
shall permit, or be construed as permitting, a reduction of the aggregate
percentage of Units the holders of which are required to consent to any
amendment, change or modification of this Indenture without the consent of the
Unitholders of all of the Units then outstanding of the affected Trust and in no
event may any amendment be made which would (1) alter the rights to the
Unitholders as against each other, (2) provide the Trustee with the power to
engage in business or investment activities other than as specifically provided
in this Indenture or (3) adversely affect the characterization of the Trust (if
no election has been made to cause the Trust to be taxed as a "regulated
investment company") as a grantor trust for federal income tax purposes.
(c) Unless the Depositor directs that other notice shall be provided, the
Trustee shall include in the annual report provided pursuant to Section 3.06
notification of the substance of such amendment.
Section 9.02. Termination. This Indenture and each Trust created hereby shall
terminate upon the maturity, redemption, sale or other disposition as the case
may be of the last Security held in such Trust hereunder unless sooner
terminated as hereinbefore specified, and may be terminated at any time by the
written consent of 66 2/3% of the Unitholders of the respective Trust; provided
that in no event shall any Trust continue beyond its Mandatory Termination Date.
Upon the date of termination the registration books of the Trustee shall be
closed.
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In the event of any termination of the Trust prior to the Mandatory
Termination Date, the Trustee shall proceed to liquidate the Securities then
held and make the payments and distributions provided for hereinafter in this
Section 9.02, except that in such event, the distribution to each Unitholder
shall be made in cash and shall be such Unitholder's pro rata interest in the
balance of the Capital and Income Accounts after the deductions herein provided.
In the event that the Trust shall terminate on or after the Mandatory
Termination Date, the Trustee shall, not less than 30 days prior to the
Mandatory Termination Date, send a written notice to all Unitholders of record.
If such Unitholder owns the minimum number of Units set forth in a Trust's
Prospectus, such notice shall further indicate that such Unitholder may elect to
receive an in-kind distribution of their pro rata share of the Securities, to
the extent of whole shares. The Trustee will honor duly executed requests for
in-kind distributions received (accompanied by the electing Unitholder's
Certificate, if issued) by the close of business ten business days prior to the
Mandatory Termination Date. Unitholders who do not effectively request an in-
kind distribution shall receive their distribution upon termination in cash.
On the Mandatory Termination Date of a Trust, this Indenture and the
related 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 distributions to Unitholders electing in-kind
distributions.
Commencing no earlier than the business day following that date on which
Unitholders must submit to the Trustee notice of their request to receive an in-
kind distribution of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during such period and in
such daily amounts as the Deposit shall direct. The Depositor shall direct the
liquidation of the Securities in such manner as to effectuate orderly sales and
a minimal market impact. In the event the Depositor does not so direct, the
Securities shall be sold within a reasonable period and in such manner as the
Trustee, in its sole discretion, shall determine. The Trustee shall not be
liable for or responsible in any way for depreciation or loss incurred by reason
of any sale or sales made in accordance with the Depositor's direction or, in
the absence of such direction, in the exercise of the discretion granted by this
Section 9.02. The Trustee shall deduct from the proceeds of these sales and pay
any tax or governmental charges and any brokerage commissions in connection with
such sales. Amounts received by the Trustee representing the proceeds from the
sales of Securities shall be credited to the Capital Account.
On the fifth business day following receipt of all proceeds of sale of the
Securities, the Trustee shall:
(a) deduct from the Income Account of such Trust or, to the extent
that funds are not available in such Account of such Trust, from the
Capital Account of such Trust, and pay to itself individually an amount
equal to the sum of (i) its accrued compensation for its ordinary recurring
services, (ii) any compensation due it for its extraordinary services in
connection with such Trust, and (iii) any costs, expenses or indemnities in
connection with such Trust as provided herein;
(b) deduct from the Income Account of such Trust or, to the extent
that funds are not available in such Account, from the Capital Account of
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such Trust, and pay accrued and unpaid fees of the Depositor and counsel in
connection with such Trust, if any;
(c) deduct from the Income Account of such Trust or the Capital
Account of such Trust 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 in connection with such Trust;
(d) make final distributions from the Trust, against surrender for
cancellation of each Unitholder's Certificate or Certificates, if issued,
as follows:
(i) to each Unitholder requesting an in-kind distribution (y)
holder's pro rata portion of each of the Securities segregated for
distribution in-kind, in whole shares, and (z) cash equal to such
Unitholder's pro rata portion of the Income and Capital Accounts as
follows: (1) a pro rata portion of the net proceeds of sale of the
Securities representing any fractional shares included in such
Unitholder's pro rata share of the Securities and (2) such other cash
as may properly be included in such Unitholder's pro rata share of the
sum of the cash balances of the Income and Capital Accounts less
deduction of the fees and expenses specified in this Section 9.02 and
less deduction of the Trustee's cost of registration and delivery of
such Unitholder's Securities;
(ii) to each Unitholder receiving a distribution in cash, such
holder's pro rata share of the cash balances of the Income and Capital
Accounts; and
(iii) on the conditions set forth in Section 3.04 hereof, to all
Unitholders, their pro rata share of the balance of the Reserve
Account.
To the extent possible, in-kind distributions of Securities shall be made
by the Trustee through the distribution of each of the Securities in book-
entry form to the account of the Unitholder's bank or broker-dealer at the
Depository Trust Company; and
(e) together with such distribution to each Unitholder as provided
for in (d), furnish to each such Unitholder a final distribution statement,
setting forth the data and information in substantially the form and manner
provided for in Section 3.06 hereof.
The Trustee shall be under no liability with respect to moneys held by it
in the Income, Reserve and Capital Accounts of a Trust upon termination except
to hold the same in trust within the meaning of the Investment Company Act of
1940, without interest until disposed of in accordance with the terms of this
Indenture.
In the event that all of the Unitholders holding Certificates shall not
surrender their Certificates for cancellation within six months after the time
specified in the above-mentioned written notice, the Trustee shall give a second
written notice to the remaining Unitholders holding Certificates to surrender
their Certificates for cancellation and receive the liquidating distribution
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with respect thereof. If within one year after the second notice all the
Certificates shall not have been surrendered for cancellation, the Trustee may
take steps, or may appoint an agent to take appropriate steps, to contact the
remaining Unitholders concerning surrender of their Certificates. All costs and
expenses incurred by the Trustee or by its agents by reason of unsurrendered
Certificates shall be paid out of the moneys and other assets which remain in a
Trust hereunder.
Section 9.03. Termination of a Target Index. Notwithstanding anything to the
contrary herein, if at any time an Index Trust's Target Index shall no longer be
compiled, maintained or made available, the Depositor may (a) direct that the
Index Trust continue to be operated hereunder utilizing the components of the
Target Index, and the percentage weightings of such components, as existed on
the last date on which the Target Index components and weightings were available
to the Trust or (b) direct the Trustee to terminate this Indenture and the
related Index Trust and liquidate the Index Trust in such manner as the
Depositor shall direct.
Section 9.04. Construction. This Indenture is executed and delivered in the
State of New York, and all laws or rules of construction of such State shall
govern the rights of the parties hereto and the Unitholders and the
interpretation of the provisions hereof.
Section 9.05. Registration of Units. Except as provided herein, the Depositor
agrees and undertakes on its own part to register the Fund and the Units of its
constituent Trusts with the Securities and Exchange Commission or other
applicable governmental agency, federal or state, 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 maintain the registration of the Fund and
to comply with this provision during the term of the Trusts created hereunder,
and the Trustee shall incur no liability or be under any obligation for expenses
in connection therewith.
Section 9.06. Written Notice. Any notice, demand, direction or instruction to
be given to the Depositor, the Evaluator or the Supervisor hereunder shall be in
writing and shall be duly given if mailed or delivered to such party at 18925
Base Camp Road, Suite 203, Monument, Colorado 80132, or at such other address as
shall be specified by the Depositor, Evaluator or Supervisor to the other
parties hereto in writing.
Any notice, demand, direction or instruction to be given to the Trustee
hereunder shall be in writing and shall be duly given if mailed or delivered to
the unit investment trust division office of the Trustee at 2 Hanson Place, 12th
Floor, New York 11217, or at such other address as shall be specified by the
Trustee to the other parties hereto in writing.
Any notice to be given to the Unitholders shall be duly given if mailed or
delivered to each Unitholder at the address of such holder appearing on the
registration books of the Trustee.
Section 9.07. Severability. If any one or more of the covenants, agreements,
provisions or terms of this Indenture shall be held contrary to any express
provision of law or contrary to policy of express law, though not expressly
prohibited, or against public policy, or shall for any reason whatsoever be held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of this
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Indenture and shall in no way affect the validity or enforceability of the other
provisions of this Indenture or of the Certificates or the rights of the holders
thereof.
Section 9.08. 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 a Trust insofar as the duties and obligations of the Trustee
are concerned.
IN WITNESS WHEREOF, the undersigned have caused these Standard Terms and
Conditions of Trust to be executed; all as of the day, month and year first
above written.
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FIXED INCOME SECURITIES, L.P.
By /s/ ALEX R. MEITZNER
--------------------------------
Alex R. Meitzner
Managing Director
CORPORATE ACKNOWLEDGMENT
STATE OF KANSAS }
}ss.
COUNTY OF SEDGWICK }
On 5th day August, 2004, before me the undersigned officer personally
appeared Alex R. Meitzner known personally to me to be a Managing Director of
the above named company, and that he/she, as such officer, being authorized so
to do, executed the foregoing instrument for the purposes therein contained, by
signing the name of the company by him/herself as such officer.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
______________________________________
Notary Public
My Commission expires:
(NOTARIAL SEAL)
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THE BANK OF NEW YORK
By /s/ PATRICK GRIFFIN
--------------------------------
Patrick Griffin
Vice President
CORPORATE ACKNOWLEDGMENT
STATE OF NEW YORK }
}ss.
COUNTY OF KINGS }
On this 5th day August, 2004, before me the undersigned officer personally
appeared Patrick Griffin, known personally to me to be a Vice President of the
above named company, and that he/she, as such officer, being authorized so to
do, executed the foregoing instrument for the purposes therein contained, by
signing the name of the company by him/herself as such officer.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
______________________________________
Notary Public
My Commission expires:
(NOTARIAL SEAL)
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