AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 3, 1996
REGISTRATION NO. 33-62179
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
to the
REGISTRATION STATEMENT
on
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES OF UNIT
INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST: VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
(formerly filed as Voyageur Equity Trust, Series 1)
B. NAME OF DEPOSITOR: VOYAGEUR FUND MANAGERS, INC.
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
VOYAGEUR FUND MANAGERS, INC.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copy to:
THOMAS J. ABOOD MARK J. KNEEDY
Voyageur Fund Managers, Inc. c/o Chapman and Cutler
90 South Seventh Street, Suite 4400 111 West Monroe Street
Minneapolis, Minnesota 55402 Chicago, Illinois 60603
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Title and amount of Proposed maximum Amount of
securities being registered aggregate offering registration fee
price
Voyageur Unit Investment Trust, An indefinite number of Indefinite $500*
Series 4 Units of Beneficial Interest
pursuant to Rule 24f-2 under
the Investment Company Act of 1940
* previously filed
</TABLE>
E. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the Registration
Statement.
/ :/ Check box if it is proposed that this filing will become effective on
January 3, 1996 at 2:00 P.M. pursuant to Rule 487.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
______________
CROSS-REFERENCE SHEET
(FORM N-8B-2 ITEMS REQUIRED BY INSTRUCTIONS AS
TO THE PROSPECTUS IN FORM S-6)
<TABLE>
<CAPTION>
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
<S> <C> <C>
1. (a) Name of Trust } Prospectus front cover
2. (b) Title of securities issued..................................... } Summary of Essential Financial
} Information
3. Name and address of each depositor.................................. } Trust Administration
4. Name and address of Trustee......................................... } Trust Administration
5. State of organization of Trust...................................... } The Trust
6. Execution and termination of Trust agreement........................ } Trust Administration
7. Changes of name..................................................... } The Trust; Trust Administration
8. Fiscal year......................................................... } *
9. Litigation } *
II. GENERAL DESCRIPTION OF THE TRUST AND
SECURITIES OF THE TRUST
10. (a) Registered of bearer securities................................ } Rights of Unitholders
(b) Cumulative or distributive securities.......................... } Rights of Unitholders; The Trust
}
(c) Redemption..................................................... } Rights of Unitholders
(d) Conversion, transfer, etc...................................... } Rights of Unitholders
(e) Periodic payment plan.......................................... } *
(f) Voting rights.................................................. } Rights of Unitholders
(g) Notice of Unit holders......................................... } Trust Administration
(h) Consents required.............................................. } Rights of Unit holders; Trust Administration
}
(i) Other provisions............................................... } Taxation
11. Type of securities comprising units................................. } The Trust
12. Certain information regarding periodic payment certificates } *
}
13. (a) Load, fees, expenses, etc...................................... } Trust Operating Expenses
(b) Certain information regarding periodic payment certificates.... } *
}
(c) Certain percentages............................................ } Summary of Essential Financial Information;
} Public Offering
(d) Certain other fees, etc. payable by holders.................... } Rights of Unitholders
(e) Certain profits receivable by depositor,
principal, underwriters, writers, Trustee or
affiliated person......................................... } Trust Operating Expenses; Public Offering
}
(f) Ratio of annual charges to income.............................. } *
} The Trust
14. Issuance of Trust's securities...................................... } Rights of Unitholders
15. Receipt and handling of payments from purchasers.................... } *
16. Acquisition and disposition of underlying } The Trust; Objectives and Securities
securities.................................................. } Selection; Trust Administration; Public
} Offering
17. Withdrawal or redemption............................................ } Rights of Unitholders; Public Offering
}
18. (a) Receipt, custody and disposition of income..................... } Rights of Unitholders
(b) Reinvestment of distributions.................................. } Rights of Unitholders
(c) Reserves or special Trusts..................................... } Trust Operating Expenses
(d) Schedule of distributions...................................... } *
19. Records, accounts and reports....................................... } Rights of Unitholders; Trust Administration
}
20. Certain miscellaneous provisions of Trust agreement
(a) Amendment...................................................... } Trust Administration
(b) Termination.................................................... } *
(c) and (d) Trustee, removal and successor......................... } Trust Administration
(e) and (f) Depositor, removal and successor........................ } Trust Administration
21. Loans to security holders } *
22. Limitations on liability............................................ } Trust Administration
23. Bonding arrangements................................................ } *
24. Other material provisions of Trust agreement........................ } *
III. ORGANIZATION, PERSONNEL AND
AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor........................................... } Trust Administration
26. Fees received by depositor.......................................... } See Items 13(a) and 13(e)
27. Business of depositor............................................... } Trust Administration
28. Certain information as to officials and
affiliated persons of depositor............................. } Trust Administration
29. Voting securities of depositor...................................... } *
30. Persons controlling depositor....................................... } *
31. Payment by depositor for certain services
rendered to Trust........................................... } *
32. Payment by depositor for certain other services rendered to Trust... } *
33. Remuneration of employees of depositor
for certain services rendered to Trust...................... } *
34. Remuneration of other persons for certain
services rendered to Trust.................................. } *
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of Trust's securities by states........................ } Public Offering
36. Suspension of sales of Trust's securities........................... } *
37. Revocation of authority to distribute............................... } *
38. (a) Method of Distribution......................................... } Public Offering
(b) Underwriting Agreements........................................ } Underwriting
(c) Selling Agreements............................................. } Public Offering
39. (a) Organization of principal underwriters......................... } Trust Administration
(b) N.A.S.D. membership of principal underwriters.................. } *
40. Certain fees received by principal underwriters..................... } See Items 13(a) and 13(e)
41. (a) Business of principal underwriters............................. } Trust Administration
(b) Branch offices of principal underwriters....................... } *
(c) Salesmen of principal underwriters............................. } *
42. Ownership of Trust's securities by certain persons.................. } *
43. Certain brokerage commissions received by
principal underwriters...................................... } Public Offering
44. (a) Method of valuation............................................ } Public Offering
(b) Schedule as to offering price.................................. } *
(c) Variation in offering price to certain persons................. } Public Offering
45. Suspension of redemption rights..................................... } Rights of Unitholders
46. (a) Redemption valuation........................................... } Public Offering
(b) Schedule as to redemption price................................ } *
47. Maintenance of position in underlying securities.................... } Public Offering
} Rights of Unitholders
V. INFORMATION CONCERNING THE TRUSTEE
OR CUSTODIAN
48. Organization and regulation of Trustee.............................. } Trust Administration
49. Fees and expenses of Trustee........................................ } Trust Operating Expenses
50. Trustee's lien...................................................... } *
VI. INFORMATION CONCERNING INSURANCE OF
HOLDERS OF SECURITIES
51. Insurance of holders of Trust's securities.......................... } Cover Page; Trust Operating Expenses
}
VII. POLICY OF REGISTRANT
52. (a) Provisions of Trust agreement with respect
to selection or elimination................................... } The Trust; Trust Administration
(b) Transactions involving elimination of
underlying securities......................................... } *
(c) Policy regarding substitution or elimination The Trust; Trust Administration
of underlying securities...................................... }
(d) Fundamental policy not otherwise covered....................... } *
53. Tax status of Trust................................................. } Taxation
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten years............................ } *
55.-58. Certain information regarding periodic payment
certificates.............................................. } *
59. Financial statements (Instruction 1(c) to Form S-6)................. } *
_____________
*Inapplicable, answer negative or not required.
</TABLE>
MINNESOTA'S BIG TEN EQUITY TRUST, SERIES 1
================================================================================
THE TRUST. Voyageur Unit Investment Trust, Series 4 (the "FUND") is
comprised of one underlying unit investment trust designated as Voyageur Equity
Trust, Series 1 (referred to herein as "MINNESOTA'S BIG TEN EQUITY TRUST, SERIES
1" or the "TRUST"). The Trust offers investors the opportunity to purchase Units
representing proportionate interests in a fixed portfolio of common stocks
issued by the ten highest dividend yielding companies as of December 29, 1995
which (a) have their principal operations located in the State of Minnesota and
(b) have a market capitalization in excess of $250 million (the "SECURITIES").
The Trust, however, will not invest in common stock of electric utility
companies. Unless terminated earlier, the Trust will terminate on January 6,
1997, and any Securities then held will, within a reasonable time thereafter, be
liquidated or distributed by the Trustee. Any Securities liquidated at
termination will be sold at the then current market value for such Securities;
therefore, the amount distributable in cash to a Unitholder upon termination may
be more or less than the amount such Unitholder paid for his Units. Upon
liquidation, Unitholders may choose either to reinvest their proceeds into the
next Minnesota's Big Ten Equity Trust Series, if available, at a reduced sales
charge (according to the schedules set forth herein) or to receive a cash
distribution.
================================================================================
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
VOYAGEUR FUND MANAGERS, INC.
The date of this Prospectus is January 3, 1996
OBJECTIVE OF THE TRUST. The objective of the Trust is to provide an above
average total return through a combination of potential capital appreciation and
dividend income by investing in a portfolio of common stocks issued by the ten
highest dividend yielding companies as of December 29, 1995 which (a) have their
principal operations located in the State of Minnesota and (b) have a market
capitalization in excess of $250 million. The Trust, however, will not invest in
the common stock of electric utility companies. See "Schedule of Investments."
There is, of course, no guarantee that the objective of the Trust will be
achieved.
PUBLIC OFFERING PRICE. The Public Offering Price per Unit of the Trust is
equal to the aggregate underlying value of the Securities in the Trust plus or
minus cash, if any, in the Capital and Income Accounts of the Trust, divided by
the number of Units of the Trust outstanding, plus an initial sales charge equal
to the difference between the maximum total sales charge for the Trust of 2.9%
of the Public Offering Price (1.9% of the Public Offering Price for Rollover
Unitholders) and the maximum deferred sales charge for a Trust ($0.019 per
Unit). Unitholders will also be assessed a deferred sales charge of $.0019,
payable monthly, over a ten month period commencing April 1, 1996, and on the
lst day of each month thereafter, through January 1, 1997. The monthly amount of
the deferred sales charge will accrue on a daily basis from the 1st day of the
month preceding a deferred sales charge payment date. For example, Unitholders
of record on the Initial Date of Deposit will pay an initial sales charge of
1.0% of the Public Offering Price and will be subject to a deferred sales charge
of 1.9% of the Public Offering Price (payable in ten monthly installments of
$0.0019 per Unit over the final ten months of the life of the Trust).
Unitholders will be assessed that portion of the deferred sales charge accrued
from the time they became Unitholders of record. Units purchased subsequent to
the initial deferred sales charge payment will be subject only to the initial
sales charge and that portion of the deferred sales charge payments not yet
collected. This deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Securities. The total
maximum sales charge assessed to Unitholders on a per Unit basis will be 2.9% of
the Public Offering Price (2.929% of the aggregate value of the Securities in
the Trust), subject to reduction as set forth in "Public Offering--General."
During the initial offering period, the sales charge is reduced on a graduated
scale for sales involving at least $100,000. If Units were available for
purchase at the opening of business on the Initial Date of Deposit, the Public
Offering Price per Unit for the Trust would have been that amount set forth
under "Summary of Essential Financial Information." The minimum purchase is
$1,000 ($250 for a tax-sheltered retirement plan). See "Public Offering."
ADDITIONAL DEPOSITS. The Sponsor may, from time to time after the Initial
Date of Deposit, deposit additional Securities in the Trust, provided it
maintains, as nearly as is practicable, the original proportionate relationship
of the Securities in the Trust's portfolio. See "The Trust."
DIVIDEND AND CAPITAL GAINS DISTRIBUTIONS. Distributions of dividends and
realized capital gains, if any, received by the Trust will be paid in cash on
the applicable Distribution Date to Unitholders of record of the Trust on the
record date as set forth in the "Summary of Essential Financial Information."
Any distribution of income and/or capital gains for the Trust will be net of the
expenses of the Trust. See "Taxation." Additionally, upon surrender of Units for
redemption or termination of the Trust, the Trustee will distribute to each
Unitholder his PRO RATA share of the Trust's assets, less expenses, in the
manner set forth under "Rights of Unitholders--Distributions of Income and
Capital."
SECONDARY MARKET FOR UNITS. Although not obligated to do so, an affiliate
of the Sponsor, Voyageur Fund Distributors, Inc. (the "Distributor") currently
intends to maintain a market for Units of the Trust and offer to repurchase such
Units at prices which are based on the aggregate underlying value of the
Securities in the Trust (generally determined by the closing sale prices of the
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is not maintained, a Unitholder may redeem
Units at prices based upon the aggregate underlying value of the Securities in
the Trust plus or minus a pro rata share of cash, if any, in the Capital and
Income Accounts of the Trust. See "Rights of Unitholders--Redemption of Units."
Units sold or tendered for redemption prior to such time as the entire deferred
sales charge on such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of sale or redemption.
TERMINATION. The Trust will terminate approximately one year and one day
after the Initial Date of Deposit regardless of market conditions at that time.
Commencing on the Mandatory Termination Date, Securities will begin to be sold
in connection with the termination of the Trust. The Sponsor will determine the
manner, timing and execution of the sale of the Securities. Written notice of
any termination of the Trust shall be given by the Trustee to each Unitholder at
his address appearing on the registration books of the Trust maintained by the
Trustee. Unitholders of the Trust may elect to become Rollover Unitholders as
described in "Special Redemption and Rollover in New Fund" below. Rollover
Unitholders will not receive the final liquidation distribution but will receive
units of a new Series of the Fund, if one is being offered. Unitholders not
electing the Rollover Option will receive a cash distribution from the sale of
the remaining Securities within a reasonable time after the Trust is terminated.
See "Trust Administration--Amendment or Termination."
SPECIAL REDEMPTION AND ROLLOVER IN NEW FUND. Unitholders will have the
option, subject to necessary exemptive relief from the staff of the Securities
and Exchange Commission, of specifying by the Rollover Notification Date stated
in "Summary of Essential Financial Information" to have all of their Units
redeemed on the Rollover Notification Date and the distributed Securities sold
by the Trustee, in its capacity as Distribution Agent, on the Special Redemption
Date. (Unitholders so electing are referred to herein as "Rollover
Unitholders.") The Distribution Agent will appoint the Sponsor as its agent to
determine the manner, timing and execution of sales of underlying Securities.
The proceeds of the redemption will then be invested in Units of a new Series of
the Trust (the "1997 FUND"), if one is offered, at a reduced sales charge
(anticipated to be 1.9% of the Public Offering Price of the 1997 Fund). The
Sponsor may, however, stop offering units of the 1997 Fund at any time in its
sole discretion without regard to whether all the proceeds to be invested have
been invested. Cash which has not been invested on behalf of the Rollover
Unitholders in the 1997 Fund will be distributed shortly after the Special
Redemption Date. However, the Sponsor anticipates that sufficient Units will be
available, although moneys in this Trust may not be fully invested on the next
business day. The portfolio of the 1997 Fund will contain the top ten dividend
yielding common stocks of Minnesota companies satisfying the criteria
established above. Rollover Unitholders will receive the amount of dividends in
the Income Account of the Trust which will be included in the reinvestment in
units of the 1997 Fund. There is however, no assurance that the exemptive relief
necessary to provide for a special redemption and rollover into a new Fund will
be received by the Trust from the Securities and Exchange Commission.
RISK FACTORS. An investment in the Trust should be made with an
understanding of the risks associated therewith, including the possible
deterioration of either the financial condition of the issuers or the general
condition of the stock market, the lack of adequate financial information
concerning an issuer and the possibility of an economic downturn in either the
Midwestern United States as a whole or the State of Minnesota in particular. For
certain risk considerations related to the Trust, see "Risk Factors." Units of
the Trust are not deposits or obligations of, and are not guaranteed or endorsed
by, any bank and are not federally insured or otherwise protected by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other agency and
involve investment risk, including the possible loss of principal.
<TABLE>
<CAPTION>
VOYAGEUR EQUITY TRUST, SERIES 1
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AT THE CLOSE OF BUSINESS ON THE DAY BEFORE THE INITIAL DATE OF DEPOSIT: JANUARY 2, 1996
SPONSOR, EVALUATOR AND SUPERVISOR: VOYAGEUR FUND MANAGERS, INC.
TRUSTEE: INVESTORS FIDUCIARY TRUST COMPANY
GENERAL INFORMATION
<S> <C>
Number of Units.............................................................................. 404,817
Fractional Undivided Interest in the Trust per Unit.......................................... 1/404,817
Calculation of Public Offering Price per 1000 Units:
Aggregate Offering Price of Securities in Portfolio(1)...................................... $ 400,769
Divided by 404,817 Units (times 1000)........................................................ $ 990.00
Plus Maximum Sales Charge of 2.9% (2.929% of the
Aggregate Value of Securities)(2)........................................................ $ 29.00
Less Deferred Sales Charge ............................................................... $ (19.00)
---------
Public Offering Price per 1000 Units (2,3)................................................... $ 1,000.00
Sponsor's Repurchase and Redemption Price per 1000 Units..................................... $ 971.00
Evaluator's Annual Evaluation Fee..............................Maximum of $.25 per 1000 Units
Initial Date of Deposit.......................................................January 3, 1996
First Settlement Date.........................................................January 8, 1996
Rollover Notification Date...................................................December 2, 1996
Special Redemption Period......................................Beginning on December 30, 1996
until no later than January 6, 1997.
Mandatory Termination Date....................................................January 6, 1997
Minimum Termination Value ..................................................................The Trust may be
terminated if the net asset value of the Trust is less than $500,000
unless the net asset value of the Trust's deposits has exceeded
$15,000,000, then the Trust Agreement may be terminated if the net
asset value of the Trust is less than $3,000,000.
Trustee's Annual Fee and Expenses.........................................$.85 per 1000 Units
Estimated Organizational and Offering Expenses (4)............................$ .0024 per Unit
Income and Capital Account
Record Date..................................................................January 6, 1997
Income and Capital Account Distribution Date......................The final distribution date
will be made within a reasonable time of the Mandatory Termination Date.
Evaluation Time........................................................4:00 p.m. Eastern Time
</TABLE>
1 Each Security listed on a national securities exchange or the NASDAQ
National Market System is valued at the last closing sale price, or if no
such price exists or if the Security is not so listed, at the closing ask
price thereof.
2 The Maximum Sales Charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is applicable to all Units and
represents an amount equal to the difference between the Maximum Sales
Charge for the Trust of 2.9% of the Public Offering Price and the amount of
the maximum deferred sales charge of $0.019 per Unit. Subsequent to the
Initial Date of Deposit, the amount of the initial sales charge will vary
with changes in the aggregate value of the Securities in the Trust. In
addition to the initial sales charge, Unitholders will pay a deferred sales
charge of $0.0019 per Unit commencing April 1, 1996 and on the 1st day of
each month thereafter through January 1, 1997. Units purchased subsequent
to the initial deferred sales charge payment will be subject only to the
initial sales charge and that portion of the deferred sales charge payments
not yet collected. These deferred sales charge payments will be paid from
funds in the Capital Account, if sufficient, or from the periodic sale of
Securities. The total maximum sales charge will be 2.9% of the Public
Offering Price (2.929% of the aggregate value of the Securities in the
Trust). See the "Fee Table" below and "Public Offering Price--Offering
Price." Any uncollected deferred sales charge amounts will be deducted from
the sales or redemption proceeds.
3 On the Initial Date of Deposit there will be no cash in the Income or
Capital Accounts. Anyone ordering Units after such date will have included
in the Public Offering Price a pro rata share of any cash in such Accounts.
4 The Trust (and therefore Unitholders) will bear all or a portion of its
organizational and offering costs (including costs of preparing the
registration statement, the trust indenture and other closing documents,
registering Units with the Securities and Exchange Commission and states,
the initial audit of the Trust portfolio, legal fees and the initial fees
and expenses of the Trustee but not including the expenses incurred in the
preparation and printing of brochures and other advertising materials and
any other selling expenses) as is common for mutual funds. Total
organizational and offering expenses will be charged off against capital at
the end of the initial offering period which is currently expected to be
approximately three months from the Initial Date of Deposit. See "Expenses
of the Trust" and "Statement of Net Assets." Historically, the sponsors of
unit investment trusts have paid all the costs of establishing such trusts.
FEE TABLE
================================================================================
This Fee Table is intended to assist investors in understanding the costs
and expenses that an investor in the Trust will bear directly or indirectly. See
"Public Offering Price--Offering Price" and "Trust Operating Expenses." Although
the Trust has a term of only one year and is a unit investment trust rather than
a mutual fund, this information is presented to permit a comparison of fees,
assuming the principal amount and distributions are rolled over each year into a
new Trust subject only to the deferred sales charge.
================================================================================
<TABLE>
<CAPTION>
AMOUNT PER
UNITHOLDER TRANSACTION EXPENSES 1,000 UNITS
- ------------------------------- -----------
<S> <C> <C>
Maximum Initial Sales Charge Imposed on Purchase
(as a percentage of offering price)...................... 1.00% (1) $10.00
Deferred Sales Charge per Year (as a percentage of
original purchase price)................................. 1.90% (2) 19.00
----- -----
Maximum Total Sales Charge ................................... 2.90% $29.00
===== ======
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS).....................
Trustee's Fee............................................ .085% $0.85
Portfolio and Evaluation Fees............................ .025% 0.25
Other Operating Expenses................................. .010% 0.10
----- ----
Total.................................................. .120%(3) $1.20(3)
====== ======
</TABLE>
1 The Maximum Initial Sales Charge is actually the difference between the
Maximum Total Sales Charge (2.90% of the Public Offering Price) and the
maximum deferred sales charge ($19.00 per 1,000 Units) and would exceed 1%
if the Public Offering Price exceeds $1,000 per 1,000 Units
2 The actual fee is $1.90 per month per 1,000 Units, irrespective of purchase
or redemption price, deducted in each of the last 10 months of the Trust.
If a Unitholder sells or redeems Units before all of these deductions have
been made, the balance of the deferred sales charge payments remaining will
be deducted from the sales or redemption proceeds. If the Unit price
exceeds $1.00 per Unit, the deferred portion of the sales charge will be
less than 1.90%; if the Unit price is less than $1.00 per Unit, the
deferred portion of the sales charge will exceed 1.90%. Units purchased
subsequent to the initial deferred sales charge payment will be subject
only to the initial sales charge and that portion of the deferred sales
charge payments not yet collected.
3 The Trust's Estimated Annual Trust Operating Expenses does not include
organizational and offering costs which are charged against capital at the
end of the initial offering period.
<TABLE>
<CAPTION>
EXAMPLE
CUMULATIVE EXPENSES PAID FOR PERIOD OF:
1 YEAR 3 YEARS
------ -------
<S> <C> <C>
An investor would pay the following $ 30 $ 73
expenses on a $1,000 investment,
assuming the estimated operating
expense ratio of .12% and a 5%
annual return on the investment
throughout the periods.
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. Although each Trust has a
term of approximately one year and is a unit investment trust rather than a
mutual fund, this information is presented to permit comparison of fees,
assuming the principal amount and distributions are rolled over each year into a
new series subject only to the Deferred Sales Charge. The examples should not be
considered representations of past or future expenses or annual rate of return;
the actual expenses and annual rate of return may be more or less than those
assumed for purposes of the examples. The estimated operating expense ratio does
not include organizational and offering costs which are charged to capital at
the end of the initial offering period.
THE TRUST
Voyageur Unit Investment Trust, Series 4 is comprised of one unit
investment trust: Voyageur Equity Trust, Series 1 ("MINNESOTA'S BIG TEN EQUITY
TRUST, SERIES 1" or the "TRUST"). The Fund was created under the laws of the
State of Missouri pursuant to a Trust Agreement (the "TRUST AGREEMENT"), dated
the date of this Prospectus (the "INITIAL DATE OF DEPOSIT"), among Voyageur Fund
Managers, Inc., as Sponsor, Evaluator and Supervisor, and Investors Fiduciary
Trust Company, as Trustee.
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in an approximately evenly dollar weighted portfolio of
common stocks issued by the ten highest dividend yielding companies as of
December 29, 1995 which (a) have their principal operations located in the State
of Minnesota and (b) have a market capitalization in excess of $250 million. The
Sponsor's determination that the companies selected for inclusion in the Trust
have their principal operations located in the State of Minnesota is based on
the fact that such companies are either headquartered in the State, derive more
than 50% of their revenues or profits from activities within the State, have
more than 50% of their assets located in the State, or their securities are
primarily traded in the State of Minnesota. The Trust, however, will not invest
in the common stock of electric utility companies. The Trust may be an
appropriate medium for investors who desire to participate in a portfolio Trust
of common stocks with greater diversification than they might be able to acquire
individually, See "Trust Portfolio." Unless terminated earlier, the Trust will
terminate on the Mandatory Termination Date set forth under "Summary of
Essential Financial Information" and any Securities then held will, within a
reasonable time thereafter, be liquidated or distributed by the Trustee. Any
Securities liquidated at termination will be sold at the then current market
value for such Securities; therefore, the amount distributable in cash to a
Unitholder upon termination may be more or less than the amount such Unitholder
paid for his Units. Upon liquidation, Unitholders may choose either (1) to
reinvest their proceeds into a subsequent Series of the Trust, if available, at
a reduced sales charge, or (2) to receive a cash distribution.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio" herein, including delivery statements
relating to contracts for the purchase of certain such Securities and an
irrevocable letter of credit issued by a financial institution in the amount
required for such purchases. Thereafter, the Trustee, in exchange for such
Securities (and contracts) so deposited, delivered to the Sponsor documentation
evidencing the ownership of that number of Units of the Trust indicated in
"Summary of Essential Financial Information." Unless otherwise terminated as
provided in the Trust Agreement, the Trust will terminate on the Mandatory
Termination Date, and Securities then held will within a reasonable time
thereafter be liquidated or distributed by the Trustee.
Additional Units of the Trust may be issued at any time by depositing in
the Trust additional Securities or contracts to purchase securities together
with irrevocable letters of credit or cash. As additional Units are issued by
the Trust as a result of the deposit of additional Securities by the Sponsor,
the aggregate value of the Securities in the Trust will be increased and the
fractional undivided interest in the Trust represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits of Securities
into the Trust following the Initial Date of Deposit, provided that such
additional deposits will be in amounts which will maintain, as nearly as
practicable, the original proportionate relationship of the Securities in the
Trust's portfolio based on the number of shares of the Securities. Any deposit
by the Sponsor of additional Securities will duplicate, as nearly as is
practicable, this original proportionate relationship and not the actual
proportionate relationship on the subsequent date of deposit, since the actual
proportionate relationship may be different than the original proportionate
relationship. Any such difference may be due to the sale, redemption or
liquidation of any of the Securities deposited in the Trust on the Initial, or
any subsequent, Date of Deposit.
Each Unit of the Trust initially offered represents an undivided interest
in the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being deposited
by the Sponsor, the fractional undivided interest in the Trust represented by
each unredeemed Unit will increase or decrease accordingly, although the actual
interest in the Trust represented by such fraction will remain unchanged. Units
will remain outstanding until redeemed upon tender to the Trustee by
Unitholders, which may include the Sponsor, or until the termination of the
Trust Agreement.
OBJECTIVES AND SECURITIES SELECTION
The objective of the Trust is to provide an above average total return
through a combination of potential capital appreciation and dividend income by
investing in an approximately evenly dollar weighted portfolio of common stocks
issued by the ten highest dividend yielding companies as of December 29, 1995
which (a) have their principal operations located in the State of Minnesota and
(b) have a market capitalization in excess of $250 million. The Trust, however,
will not invest in the common stock of electric utility issuers. In seeking this
objective, the Sponsor considered, among other things, the ability of the
Securities to outpace inflation. While inflation is currently relatively low,
the United States has historically experienced periods of double-digit
inflation. While the prices of equity securities will fluctuate, over time
equity securities have outperformed the rate of inflation, and other less risky
investments, such as government bonds and U.S. Treasury bills. Past performance
is, however, no guarantee of future results.
The Trust will terminate approximately one year and one day from the date
of this Prospectus. Investors will be subject to taxation on the dividend income
received by the Trust and on gains from the sale or liquidation of Securities
(see "TAXATION"). Investors should be aware that there is not any guarantee that
the objective of the Trust will be achieved because it is subject to the
continuing ability of the respective issuers to declare and pay dividends and
because the market value of the Securities can be affected by a variety of
factors. Common stocks may be especially susceptible to general stock market
movements and to volatile increases and decreases of value as market confidence
in and perceptions of the issuers change. Investors should be aware that there
can be no assurance that the value of the underlying Securities will increase or
that the issuers of the Securities will pay dividends on outstanding common
shares. Any distribution of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any dividends
depends upon several factors including the financial condition of the issuers
and general economic conditions. See "Risk Factors."
Investors should be aware that the Trust is not a "managed" fund and as a
result the adverse financial condition of a company will not result in its
elimination from the portfolio except under extraordinary circumstances (see
"Trust Administration--Portfolio Administration"). In addition, Securities will
not be sold by the Trust to take advantage of market fluctuations or changes in
anticipated rates of appreciation. Investors should note in particular that the
Securities were selected by the Sponsor prior to the date the Securities were
purchased by the Trust. The Trust may continue to hold Securities originally
selected through this process even though the evaluation of the attractiveness
of the Securities may have changed and, if the evaluation were performed again
at that time, the Securities would not be selected for the Trust.
As described herein, the Securities included in the Trust have been
selected from a universe of potential securities which meet a set of criteria
established by the Sponsor. Prior to this offering neither the Sponsor nor to
its knowledge any other entity independently maintained an annual performance
record of the securities which would have been included in such a pool on any
given year, although the information necessary to generate such a performance
record was and continues to be readily available. Such annual returns do not
take into account commissions, sales charges, expenses or taxes.
<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURNS (1)
Year Ended Minnesota
12/31 BIG TEN DJIA (2) S&P 500 (3)
------------- ------- ---- -------
<S> <C> <C> <C>
1981 13.86 7.52 -4.91
1982 40.93 26.04 21.11
1983 23.52 38.91 22.37
1984 1.87 6.43 6.11
1985 47.37 29.44 32.03
1986 17.98 34.79 18.55
1987 4.02 6.07 5.22
1988 17.52 21.63 16.82
1989 33.04 26.45 31.53
1990 2.26 -7.57 -3.18
1991 42.21 35.09 30.57
1992 20.15 7.85 7.69
1993 8.48 26.92 9.99
1994 0.37 4.15 1.29
1995 27.32 36.95 37.59
</TABLE>
1 Total Return represents the sum of the percentage change in market value of
each group of stocks between the first trading day of a period and the
total dividends paid on each group of stocks during the period divided by
the opening market value of each group of stocks as of the first trading
day of a period. DJIA and S&P 500 are unmanaged indices and do not incur
sales charges, commissions, expenses or taxes. Total return of the
Minnesota Big Ten above does not take into consideration any applicable
sales charges, commissions, expenses or taxes. Returns would be lower as a
result of such charges and expenses.
2 An index of 30 stocks compiled by Dow Jones & Company, Inc. Source:
Bloomberg L.P.
3 The S&P 500 is a total return index consisting of 500 widely held common
stocks, calculated by Standard & Poor's. Source: Fact Set Data Systems,
Inc.
There can be no assurance that the Portfolio of the Trust will outperform
the S&P 500 or the DJIA over the life of the Trust.
The chart below represents past performance of the Minnesota Big Ten, DJIA
and the S&P 500 and should not be considered indicative of future results. From
January, 1981 through December 1995 the average annual total return for the
Minnesota Big Ten, DJIA and the S&P 500 was 19.14%, 19.18%, and 14.77%,
respectively. The chart reflects a hypothetical assumption that $10,000 was
invested on January 1, 1981 and the investment strategy followed for 15 years.
The chart assumes that all dividends during a year are reinvested at the end of
that year and does not reflect sales charges, commission, expenses or taxes.
There can be no assurance that the Trust will outperform the DJIA or the S&P 500
over its approximately one-year life or over consecutive rollover periods, if
available.
<TABLE>
<CAPTION>
VALUE OF $10,000 INVESTED ON JANUARY 1, 1981
Year Ended Minnesota
12/31 BIG 10 DJIA S&P 500
-------------- ------ ---- -------
<S> <C> <C> <C>
1981 11,385.78 10,752.00 9,509.00
1982 16,046.04 13,551.82 11,516.35
1983 19,820.18 18,824.83 14,092.56
1984 20,191.60 20,035.27 14,953.61
1985 29,755.58 25,933.65 19,743.25
1986 35,104.20 34,955.97 23,405.63
1987 36,515.96 37,077.80 24,627.40
1988 42,914.20 45,097.73 28,769.73
1989 57,094.25 57,026.08 37,840.83
1990 58,386.50 52,709.20 36,637.49
1991 83,029.15 71,204.86 47,837.57
1992 99,756.41 76,794.45 51,516.28
1993 108,214.07 97,467.51 56,662.76
1994 108,614.98 101,512.41 57,393.70
1995 138,288.79 139,019.83 78,965.74
</TABLE>
Past performance of any series may not be indicative of results of future
series. Trust performance may be compared to the performance on the same basis
of the DJIA, the S&P 500 Composite Price Stock Index, or performance data from
publications such as Morningstar Publications, Inc. This performance may also be
compared for various periods with an investment in short-term U.S. Treasury
securities; however, the investor should bear in mind that Treasury securities
are fixed income obligations, having the highest credit characteristics, while
equity securities involve greater risk because they have no maturities, and
income thereon is subject to the financial condition of, and declaration by, the
issuers. Past performance of course may not be indicative of future results and
results actually achieved by any Unitholder will vary depending on the dates the
Unitholder purchased and sold his Units. Additionally, the foregoing returns do
not take into account commissions, sales charges, Trust expenses or taxes. The
securities included in the Trust represent higher geographic concentration than
those of the S&P 500 and DJIA.
TRUST PORTFOLIO
The Trust consists of the following issues of Securities issued by
Minnesota companies and listed on a national securities exchange, the NASDAQ
National Market System or traded in the over-the-counter market. Each of the
companies whose Securities are included in the portfolio were selected based
upon those factors referred to under "Objectives and Securities Selection"
above. The following is a listing of the companies included in the Trust.
DELUXE CORPORATION
INTERNATIONAL MULTIFOODS CORPORATION
JOSTENS, INC.
GENERAL MILLS, INC.
SUPERVALU, INC.
NORWEST CORPORATION
MINNESOTA MINING AND MANUFACTURING CO.
FIRST BANK SYSTEM, INC.
ST. PAUL COMPANIES, INC.
BEMIS COMPANY, INC.
DELUXE CORPORATION prints a variety of checks, bank and business related
forms, provides electronic funds transfer services and sells greeting cards and
stationery. The company's operations also include new account verification
services, computer and business forms, office products and direct consumer
product marketing. Nelco, Inc., a subsidiary, is a tax form and electronic tax
filing service provider.
INTERNATIONAL MULTIFOODS CORPORATION processes and distributes specialty
foods. The company produces appetizers, ethnic foods, specialty meats and bakery
products to commercial customers, convenience stores, warehouse clubs, vending
operators and pizza, Mexican and Italian restaurants in the United States. The
company produces flour and pickles in Canada and spices in Venezuela.
JOSTENS, INC. designs, manufactures and sells products created to promote
and recognize achievement. The company is a leading producer of class rings,
yearbooks, graduation announcements and diplomas. Jostens also offers
computer-based instructional products and is in the school photography business.
GENERAL MILLS, INC. manufactures and markets consumer food products. Major
United States businesses include "Big G" cereals; "Betty Crocker" dessert, side
dish and dinner mixes; snack products; "Gold Medal" flour and "Yoplait" and
"Columbo" yogurts. General Mills sells its products in the US, Canada, Europe,
Japan and Latin America.
SUPERVALU, INC. operates as a food wholesaler in the United States. The
company serves approximately 4,650 stores in 46 states. In addition to food
wholesaling, Supervalu also owns and operates a chain of 300 supermarkets under
the names "County Market", Hornbachers", "Scott's Foods" and "Cub Foods" and
holds interest in a general merchandise retailer called "Shopko."
NORWEST CORPORATION provides banking, insurance, investments and other
financial services from over 3,000 locations in the United States, Canada and
internationally. Norwest provides its commercial and retail banking services,
bond trading and capital management services to individuals, businesses,
governments and other financial institutions.
MINNESOTA MINING & MANUFACTURING COMPANY operates in the industrial and
consumer, information, imaging and electronic and life sciences business
segments. The company manufactures industrial, commercial, healthcare and
consumer products, including adhesives, abrasives, laser imagers and "Scotch
Brand" products which are marketed worldwide.
FIRST BANK SYSTEM, INC. is a bank holding company with subsidiary banks
that attract deposits and conduct retail and commercial banking services,
offering residential and commercial real estate mortgage, agricultural and
consumer loans. The company's subsidiaries also offer trust services. The
company's serve 11 states from approximately 350 offices.
ST. PAUL COMPANIES, INC., through its subsidiaries, provides
property-liability insurance underwriting, reinsurance underwriting and selling,
insurance brokerage products and services and sponsors, markets and manages
tax-free investments for individual investors.
BEMIS COMPANY, INC. produces a broad range of flexible packaging products.
The company's products include coated and laminated film packaging, monofilm
packaging products, plastic containers and multiwall paper bags. Bemis also
manufactures specialty coated graphics products.
Investors should note that the above criteria were applied to the Equity
Securities selected for inclusion in the Trust portfolio as of the date
indicated above. Since the Sponsor may deposit additional Securities which were
originally selected through this process, the Sponsor may continue to sell Units
of the Trust even though yields on these Securities may have changed subsequent
to the Initial Date of Deposit, and therefore the Securities would no longer be
chosen for deposit into the Trust if the selection process were to be made again
at a later time.
GENERAL. The Trust consists of such of the Securities listed under
"Schedule of Investments" as may continue to be held from time to time in the
Trust and any additional Securities acquired and held by the Trust pursuant to
the provisions of the Trust Agreement together with cash held in the Income and
Capital Accounts. Neither the Sponsor nor the Trustee shall be liable in any way
for any failure in any of the Securities. However, should any contract for the
purchase of any of the Securities initially deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in the Trust to cover
such purchase are reinvested in substitute Securities in accordance with the
Trust Agreement, refund the cash and sales charge attributable to such failed
contract to all Unitholders on the next distribution date.
Because certain of the Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from such
events will be distributed to Unitholders and will not be reinvested, no
assurance can be given that the Trust will retain for any length of time its
present size and composition. Although the portfolio is not managed, the Sponsor
may instruct the Trustee to sell Securities under certain limited circumstances.
Pursuant to the Trust Agreement and with limited exceptions, the Trustee may
sell any securities or other property acquired in exchange for Securities such
as those acquired in connection with a merger or other transaction. If offered
such new or exchanged securities or property, the Trustee shall reject the
offer. However, in the event such securities or property are nonetheless
acquired by the Trust, they may be accepted for deposit in the Trust and either
sold by the Trustee or held in the Trust pursuant to the direction of the
Sponsor (who may rely on the advice of the Supervisor). See "Trust
Administration--Portfolio Administration."
Unitholders will be unable to dispose of any of the Securities as such and
will not be able to vote the Securities. As the holder of the Securities, the
Trustee will have the right to vote all of the voting stocks in the Trust and
will vote such stocks in accordance with the instructions of the Sponsor.
RISK FACTORS
GENERAL. An investment in Units of the Trust should be made with an
understanding of the risks which an investment in common stocks entails,
including the risk that the financial condition of the issuers of the Securities
or the general condition of the common stock market may worsen and the value of
the Securities and therefore the value of the Units may decline. Common stocks
are especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises. Shareholders of common stocks
have rights to receive payments from the issuers of those common stocks that are
generally subordinate to those of creditors of, or holders of debt obligations
or preferred stocks of, such issuers. Shareholders of common stocks of the type
held by the Trusts have a right to receive dividends only when and if, and in
the amounts, declared by each issuer's board of directors and have a right to
participate in amounts available for distribution by such issuer only after all
other claims on such issuer have been paid or provided for. Common stocks do not
represent an obligation of the issuer and, therefore, do not offer any assurance
of income or provide the same degree of protection of capital as do debt
securities. The issuance of additional debt securities or preferred stock will
create prior claims for payment of principal, interest and dividends which could
adversely affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. The value of
common stocks is subject to market fluctuations for as long as the common stocks
remain outstanding, and thus the value of the Securities in a portfolio may be
expected to fluctuate over the life of the Trust to values higher or lower than
those prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Cumulative preferred stock dividends must be paid before
common stock dividends and any cumulative preferred stock dividend omitted is
added to future dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on liquidation
which are senior to those of common stockholders.
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Trust may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemption, and the value of
the Trust, will be adversely affected if trading markets for the Securities are
limited or absent.
TAXATION
GENERAL. The following is a general discussion of certain of the
federal income tax consequences of the purchase, ownership and disposition of
he Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "CODE"). Unitholders should
consult their tax advisers in determining the federal, state, local and any
other tax consequences of the purchase, ownership and disposition of Units in
the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. The Trust is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of the assets of the Trust under the Code; and the income of the Trust
will be treated as income of the Unitholders thereof under the Code. Each
Unitholder will be considered to have received his pro rata share of income
derived from each Security when such income is received by the Trust.
2. A Unitholder will be considered to have received all of the dividends
paid on his pro rata portion of each Security when such dividends are received
by the Trust regardless of whether such dividends are used to pay a portion of
the deferred sales charge. Unitholders will be taxed in this manner regardless
of whether distributions from the Trust are actually received by the Unitholder
or are automatically reinvested (see "Rights of Unitholders--Reinvestment
Option").
3. The Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, exchange, redemption, or otherwise) or upon the sale
or redemption of Units by such Unitholder. The price a Unitholder pays for his
Units, including sales charges, is allocated among his pro rata portion of each
Security held by the Trust (in proportion to the fair market values thereof on
the date the Unitholder purchases his Units) in order to determine his initial
cost for his pro rata portion of each Security held by the Trust. For federal
income tax purposes, a Unitholder's pro rata portion of dividends as defined by
Section 316 of the Code paid with respect to a Security held by the Trust is
taxable as ordinary income to the extent of such corporation's current and
accumulated "earnings and profits." A Unitholder's pro rata portion of dividends
paid on such Security which exceed such current and accumulated earnings and
profits will first reduce a Unitholder's tax basis in such Security, and to the
extent that such dividends exceed a Unitholder's tax basis in such Security
shall generally be treated as capital gain. In general, any such capital gain
will be short-term unless a Unitholder has held his Units for more than one
year.
4. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain except in the case of a dealer or a financial
institution and, will be long-term if the Unitholder has held his Units for more
than one year (the date on which the Units are acquired (I.E., the "TRADE DATE")
is excluded for purposes of determining whether the Units have been held for
more than one year). A Unitholder's portion of loss, if any, upon the sale or
redemption of Units or the disposition of Securities held by the Trust will
generally be considered a capital loss except in the case of a dealer or a
financial institution and, in general, will be long-term if the Unitholder has
held his Units for more than one year. However, a Rollover Unitholder's loss, if
any, incurred in connection with the exchange of Units for units in the next new
series of the Trust (the "1997 FUND") will generally be disallowed with respect
to the disposition of any Securities pursuant to such exchange to the extent
that such Unitholder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into account such
Unitholder's deemed ownership of the securities underlying the Units in the 1997
Fund in the manner described above, if such substantially identical securities
were acquired within a period beginning 30 days before and ending 30 days after
such disposition. However, any gains incurred in connection with such an
exchange by a Rollover Unitholder would be recognized. Unitholders should
consult their tax advisers regarding the recognition of gains and losses for
federal income tax purposes.
5. The Code provides that "miscellaneous itemized deductions" are allowable
only to the extent that they exceed two percent of an individual taxpayer's
adjusted gross income. Miscellaneous itemized deductions subject to this
limitation under present law include a Unitholder's pro rata share of expenses
paid by the Trust, including fees of the Trustee and the Sponsor.
6. The Unitholder's basis in his Units will be equal to the cost of his
Units, including the total sales charge. A portion of the sales charge is
deferred as set forth in "Public Offering -General." The proceeds received by a
Unitholder upon the sale or redemption of a Unit will reflect deduction of the
deferred amount (the "DEFERRED SALES CHARGE AMOUNT"). The annual statement and
the relevant tax reporting forms received by Unitholders will reflect the actual
amounts paid to them, net of the Deferred Sales Charge Amount. Accordingly,
Unitholders should not increase their basis in their Units by the Deferred Sales
Charge Amount.
DIVIDENDS RECEIVED DEDUCTION. A corporation that owns Units will generally
be entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion of dividends received by the Trust (to the extent
such dividends are taxable as ordinary income, as discussed above, and are
attributable to domestic corporations) in the same manner as if such corporation
directly owned the Securities paying such dividends (other than corporate
shareholders, such as "S" corporations, which are not eligible for the deduction
because of their special characteristics and other than for purposes of special
taxes such as the accumulated earnings tax and the personal holding corporation
tax). However, a corporation owning Units should be aware that Sections 246 and
246A of the Code impose additional limitations on the eligibility of dividends
for the 70% dividends received deduction. These limitations include a
requirement that stock (and therefore Units) must generally be held at least 46
days (as determined under Section 246(c) of the Code). Proposed changed final
regulations have been recently issued which address special rules that must be
considered in determining whether the 46 day holding period requirement is met.
Moreover, the allowable percentage of the deduction will be reduced from 70% if
a corporate Unitholder owns certain stock (or Units) the financing of which is
directly attributable to indebtedness incurred by such corporation. It should be
noted that various legislative proposals that would affect the dividends
received deduction have been introduced. Unitholders should consult with their
tax advisers with respect to the limitations on and possible modifications to
the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
RECOGNITION OF TAXABLE GAIN OR LOSS UPON DISPOSITION OF SECURITIES BY THE
TRUST OR DISPOSITION OF UNITS. AS discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit (although losses incurred by Rollover Unitholders
may be subject to disallowance, as discussed above). For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "TAX ACT") raised tax rates
on ordinary income while capital gains remained subject to a 28% maximum stated
rate. Because some or all capital gains are taxed at a comparatively lower rate
under the Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions that are
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment in
Units.
As discussed in "Rights of Unitholders--Special Redemption and Rollover in
New Fund," a Unitholder may elect to become a Rollover Unitholder. To the extent
a Rollover Unitholder exchanges his Units for Units of the 1997 Fund in a
taxable transaction, such Unitholder will recognize gains, if any, but generally
will not be entitled to a deduction for any losses recognized upon the
disposition of any Securities pursuant to such exchange to the extent that such
Unitholder is considered the owner of substantially identical securities under
the wash sale provisions of the Code taking into account such Unitholder's
deemed ownership of the securities underlying the Units in the 1997 Fund in the
manner described above, if such substantially identical securities were acquired
within a period beginning 30 days before and ending 30 days after such
disposition under the wash sale provisions contained in Section 1091 of the
Code. In the event a loss is disallowed under the wash sale provisions, special
rules contained in Section 1091 (d) of the Code apply to determine the
Unitholder's tax basis in the securities acquired. Rollover Unitholders are
advised to consult their tax advisers.
OTHER MATTERS. Each Unitholder will be requested to provide the
Unitholder's taxpayer identification number to the Trustee and to certify that
the Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by the
Trust to such Unitholder (including amounts received upon the redemption of
Units) will be subject to back-up withholding. Distributions by the Trust (other
than those that are not treated as United States source income, if any) will
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax advisers.
At the termination of the Trust, the Trustee will furnish to each
Unitholder of such Trust a statement containing information relating to the
dividends received by such Trust on the Securities, the gross proceeds received
by the Trust from the disposition of any Security (resulting from redemption or
the sale of any Security), and the fees and expenses paid by the Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Dividend income and long-term capital gains may also be subject to state
and local taxes. Investors should consult their tax advisers for specific
information on the tax consequences of particular types of distributions.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker-dealers for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed plans
established.
TRUST OPERATING EXPENSES
COMPENSATION OF SPONSOR AND EVALUATOR. The Sponsor will not receive any
fees in connection with its activities relating to the Trust. However, the
Sponsor shall receive for regularly providing evaluation services to the Trust
the annual per Unit evaluation fee, payable in monthly installments, set forth
under "Summary of Essential Financial Information" for regularly evaluating the
Fund portfolio. This fee may be increased without approval of the Unitholders by
an amount not exceeding proportionate increases under the category "All Services
Less Rent of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category. Such fee may exceed the actual costs of providing such evaluation
services for the Trust, but at no time will the total amount received for
evaluation services rendered to all unit investment trusts sponsored by the
Sponsor for which the Sponsor supplies evaluation services exceed the aggregate
cost to the Sponsor for supplying such services in such year. The Sponsor will
receive sales commissions and may realize other profits (or losses) in
connection with the sale of Units and the deposit of the Securities as described
under "Public Offering--Sponsor and Other Compensation".
TRUSTEE'S FEE. For its services the Trustee will receive the annual fee set
forth under "Summary of Essential Financial Information". The Trustee's fees are
payable in monthly installments on or before the fifteenth day of each month
from the Income Account to the extent funds are available and then from the
Capital Account. The Trustee benefits to the extent there are funds for future
distributions, payment of expenses and redemptions in the Capital and Income
Accounts since these Accounts are non-interest bearing and the amounts earned by
the Trustee are retained by the Trustee. Part of the Trustee's compensation for
its services to the Trust is expected to result from the use of these funds.
Such fees may be increased without approval of the Unitholders by amounts not
exceeding proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States Department
of Labor or, if such category is no longer published, in a comparable category.
For a discussion of the services rendered by the Trustee pursuant to its
obligations under the Trust Agreement, see "Rights of Unitholders-- Reports
Provided" and "Trust Administration."
MISCELLANEOUS EXPENSES. Expenses incurred in establishing the Trust,
including the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by the Trust and charged off against capital at the end
of the initial offering period which is currently expected to be approximately
three months from the Initial Date of Deposit. The following additional charges
are or may be incurred by the Trust: (a) normal expenses (including the cost of
mailing reports to Unitholders) incurred in connection with the operation of
such Trust, (b) fees of the Trustee for extraordinary services, (c) expenses of
the Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect the Trust and the rights and interests of
Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith, reckless disregard of its duty or wilful misconduct on its part and (g)
expenditures incurred in contacting Unitholders upon termination of the Trust.
The fees and expenses set forth herein are payable out of the Trust. When such
fees and expenses are paid by or owing to the Trustee, they are secured by a
lien on the Trust's portfolio. Since the Securities are all common stocks, and
the income stream produced by dividend payments is unpredictable, the Sponsor
cannot provide any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. If the balances in the Income and Capital Accounts
are insufficient to provide for amounts payable by the Trust, the Trustee has
the power to sell Securities to pay such amounts. These sales may result in
capital gains or losses to Unitholders. See "Taxation."
PUBLIC OFFERING
GENERAL. Units are offered at the Public Offering Price (which is based on
the aggregate underlying value of the Securities and includes an initial sales
charge equal to the difference between the maximum total sales charge for the
Trust of 2.9% of the Public Offering Price and the maximum deferred sales charge
for the Trust ($0.019 per Unit). Unitholders will also be assessed a deferred
sales charge of $0.0019, payable monthly, over a ten month period commencing
April 1, 1996, and on the 1st day of each month thereafter, through January 1,
1997. The monthly amount of the deferred sales charge will accrue on a daily
basis from the 1st day of the month preceding a deferred sales charge payment
date. For example, Unitholders of record on the Initial Date of Deposit will pay
an initial sales charge of 1.0% of the Public Offering Price and will be subject
to a deferred sales charge of 1.9% of the Public Offering Price (payable in ten
monthly installments of $0.0019 per Unit over the final ten months of the life
of the Trust). The deferred sales charge as a percentage of the Public Offering
Price of the Units will fluctuate with changes in the Public Offering Price per
Unit. Unitholders will be assessed that portion of the deferred sales charge
accrued from the time they became Unitholders of record. Units purchased
subsequent to the initial deferred sales charge payment will be subject to only
the initial sales charge and that portion of the deferred sales charge payments
not yet collected. This deferred sales charge will be paid from funds in the
Capital Account, if sufficient, or from the periodic sale of Securities. The
total maximum sales charge assessed to Unitholders on a per Unit basis will be
2.9% of the Public Offering Price (2.929% of the aggregate value of the
Securities). Such underlying value shall include the proportionate share of any
undistributed cash held in the Capital and Income Accounts of the Trust. The
initial sales charge applicable to quantity purchases is reduced on a graduated
basis to any person acquiring $100,000 as follows:
<TABLE>
<CAPTION>
DOLLAR AMOUNT OF SALES
AGGREGATE DOLLAR VALUE CHARGE REDUCTION
OF UNITS PURCHASED PER DOLLAR INVESTED
- ------------------ -----------------------
<S> <C>
$100,000 - $249,999 .......................................................... $.0065
$250,000 or More.............................................................. $.0100
</TABLE>
The sales charge reduction will primarily be the responsibility of the
selling broker, dealer or agent. Registered representatives of selling brokers,
dealers, or agents may purchase Units of the Trust at the current Public
Offering Price less the dealer's concession during the initial offering period
and for secondary market transactions. See "Sponsor and Dealer Compensation."
Employees, officers and directors (including their immediate family members,
defined as spouses, children, grandchildren, parents, grandparents,
mothers-in-law, fathers-in-law, sons-in-law and daughters-in-law, and trustees,
custodians or fiduciaries for the benefit of such persons) of the Sponsor and
its subsidiaries may purchase Units of the Trusts without an initial sales
charge in the initial offering period.
OFFERING PRICE. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in accordance
with fluctuations in the prices of the underlying Securities in the Trust.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities an amount
equal to the difference between the maximum total sales charge for the Trust of
2.9% of the Public Offering Price and the maximum deferred sales charge for the
Trust ($0.019 per Unit) and dividing the sum so obtained by the number of Units
outstanding. Such underlying value shall include the proportionate share of any
cash held in the Income and Capital Accounts. Such price determination as of the
close of business on the day before the Initial Date of Deposit was made on the
basis of an evaluation of the Securities prepared by Voyageur Fund Managers,
Inc., as Evaluator. Thereafter, the Evaluator on each business day will appraise
or cause to be appraised the value of the underlying Securities as of the
Evaluation Time on days the New York Stock Exchange is open and will adjust the
Public Offering Price of the Units commensurate with such valuation. Such Public
Offering Price will be effective for all orders received prior to the Evaluation
Time on each such day. Orders received by the Trustee, Sponsor or Underwriters
for purchases, sales or redemptions after that time, or on a day which is not a
business day for the Trust, will be held until the next determination of price.
Unitholders who purchase Units subsequent to the Initial Date of Deposit will
pay an initial sales charge equal to the difference between the maximum total
sales charge of 2.9% of the Public Offering Price and the maximum deferred sales
charge for a Trust ($0.019 per Unit) and will be assessed a deferred sales
charge of $0.0019 per Unit on each of the remaining deferred sales charge
payment dates as set forth in "Public Offering-General."
The value of the Securities during the initial offering period is
determined on each business day by the Evaluator in the following manner: if the
Securities are listed on a national securities exchange or the NASDAQ National
Market System, this evaluation is generally based on the closing sale prices on
that exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale price on
that exchange or system, at the closing ask prices. If the Securities are not so
listed or, if so listed and the principal market therefore is other than on the
exchange, the evaluation shall generally be based on the current ask price on
the over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are unavailable,
the evaluation is generally determined (a) on the basis of current ask prices
for comparable securities, (b) by appraising the value of the Securities on the
ask side of the market or (c) by any combination of the above.
In offering the Units to the public, neither the Sponsor, nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
UNIT DISTRIBUTION. During the initial offering period, Units will be
distributed to the public by an affiliate of the Sponsor, Voyageur Fund
Distributors, Inc. (the "Distributor"), broker-dealers and others at the Public
Offering Price. Upon the completion of the initial offering period (which is
expected to be approximately 3 months from the Initial Date of Deposit), Units
repurchased in the secondary market, if any, may be offered by this Prospectus
at the secondary market Public Offering Price in the manner described above.
The Sponsor intends to qualify the Units for sale in a number of states.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the agency
commission referred to above) is retained by or remitted to the banks. Under the
Glass-Steagall Act, banks are prohibited from underwriting Trust Units; however,
the Glass-Steagall Act does permit certain agency transactions and the banking
regulators have not indicated that these particular agency transactions are not
permitted under such Act. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein and banks and
financial institutions may be required to register as dealers pursuant to state
law.
SPONSOR AND DEALER COMPENSATION. The Distributor will receive the gross
sales commission equal to 2.9% of the Public Offering Price of the Units, less
any reduced sales charge for quantity purchases as described under "General"
above. Any such quantity discount provided to investors will be borne by the
selling dealer or agent. Sales will be made to brokers, dealers and agents which
represent a concession or agency commission of $.02 per Unit for primary sales.
Brokers, dealers and agents will receive a concession or agency commission of
$.01 per Unit on purchases by Rollover Unitholders. However, resales of Units by
such broker-dealers and others to the public will be made at the Public Offering
Price described in the Prospectus. The Distributor reserves the right to reject,
in whole or in part, any order for the purchase of Units and the right to change
the amount of the concession or agency commission from time to time. Volume
concessions or agency commissions of an additional $.001 per Unit will be given
to any broker dealer, bank or other financial intermediary who purchases Units
from the Distributor during the initial offering period and who agree to
underwrite a portion of Units of the next unit investment trust investing in
fixed income securities made available by the Sponsor.
At various times the Distributor may implement programs under which the
sales forces of brokers, dealers, banks and/or others may be eligible to win
nominal awards for certain sales efforts, or under which the Distributor will
re-allow to any such brokers, dealers, banks and/or others that sponsor sales
contests or recognition programs conforming to criteria established by the
Distributor, or participate in sales programs sponsored by the Sponsor, an
amount not exceeding the total applicable sales charges on the sales generated
by such person at the public offering price during such programs. Also, the
Distributor in its discretion may from time to time pursuant to objective
criteria established by the Sponsor pay fees to qualifying brokers, dealers,
banks or others for certain services or activities which are primarily intended
to result in sales of Units of the Trusts. Such payments are made by the Sponsor
out of its own assets, and not out of the assets of the Trust. These programs
will not change the price Unitholders pay for their Units or the amount that the
Trust will receive from the Units sold.
In addition, the Sponsor will realize a profit or will sustain a loss, as
the case may be, as a result of the difference between the price paid for the
Securities by the Sponsor and the cost of such Securities to the Trust on the
Initial Date of Deposit as well as on subsequent deposits. See "Schedule of
Investments." The Sponsor and the Distributor have not participated as sole
underwriter or as manager or as a member of the underwriting syndicates or as an
agent in a private placement for any of the Securities in the Trust. The Sponsor
may further realize additional profit or loss during the initial offering period
as a result of the possible fluctuations in the market value of the Securities
in the Trust after a date of deposit, since all proceeds received from
purchasers of Units (excluding dealer concessions and agency commissions
allowed, if any) will be retained by the Sponsor. Certain broker-dealers
acquired or will acquire the securities for the Sponsor and thereby benefit from
transaction fees. Such broker dealers in their general securities business act
as agent or principal in connection with the purchase and sale of equity
securities, including the securities in the Trust, and may act as a market maker
in certain of the securities. Such broker dealers also from time to time may
issue reports on and make recommendations relating to equity securities, which
may include the securities of the Trust.
A person will become the owner of the Units on the date of settlement
provided payment has been received. Cash, if any, made available to the Sponsor
prior to the date of settlement for the purchase of Units may be used in the
Sponsor's business and may be deemed to be a benefit to the Sponsor, subject to
the limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Sponsor currently intends to
maintain a secondary market for Units of the Trust. In so maintaining a market,
the Sponsor will also realize profits or sustain losses in the amount of any
difference between the price at which Units are purchased and the price at which
Units are resold (which price includes the applicable sales charge). In
addition, the Sponsor will also realize profits or sustain losses resulting from
a redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
PUBLIC MARKET. Although it is not obligated to do so, the Sponsor currently
intends to maintain a market for the Units offered hereby and offer continuously
to purchase Units at prices, subject to change at any time, based upon the
aggregate underlying value of the Securities in the Trust (computed as indicated
under "Offering Price" above and "Rights of Unitholders--Redemption of Units").
If the supply of Units exceeds demand or if some other business reason warrants
it, the Sponsor may either discontinue all purchases of Units or discontinue
purchases of Units at such prices. In the event that a market is not maintained
for the Units and the Unitholder cannot find another purchaser, a Unitholder
desiring to dispose of his Units will be able to dispose of such Units by
tendering them to the Trustee for redemption at the Redemption Price. See
"Rights of Unitholders--Redemption of Units." A Unitholder who wishes to dispose
of his Units should inquire of his broker as to current market prices in order
to determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof. Units sold prior to such time as the
entire deferred sales charge on such Units has been collected will be assessed
the amount of the remaining deferred sales charge at the time of sale.
TAX-SHELTERED RETIREMENT PLANS. Units of the Trust are available for
purchase in connection with certain types of tax-sheltered retirement plans,
including Individual Retirement Accounts for the individuals, Simplified
Employee Pension Plans for employees, qualified plans for self-employed
individuals, and qualified corporate pension and profit sharing plans for
employees. The purchase of Units of the Trust may be limited by the plans'
provisions and does not itself establish such plans. The minimum purchase in
connection with a tax-sheltered retirement plan is $250.
RIGHTS OF UNITHOLDERS
CERTIFICATES. The Trustee is authorized to treat as the record owner of
Units that person who is registered as such owner on the books of the Trustee.
wnership of Units of the Trust will be evidenced by book entry unless a
Unitholder or the Unitholder's registered broker-dealer makes a written request
to the Trustee that ownership be in certificate form. Units are transferable by
making a written request to the Trustee and, in the case of Units evidenced by a
certificate, by presentation and surrender of such certificate to the Trustee
properly endorsed or accompanied by a written instrument or instruments of
transfer. A Unitholder must sign such written request, and such certificate or
transfer instrument, exactly as his name appears on the records of the Trustee
and on the face of any certificate representing the Units to be transferred with
the signature guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program in
addition to, or in substitution for, STAMP as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may
require a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.
DISTRIBUTIONS OF INCOME AND CAPITAL. Any dividends received by the Trust
with respect to the Securities therein are credited by the Trustee to the Income
Account. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account.
The Trustee will distribute any net income received with respect to any of
the Securities in the Trust on or about the Income Distribution Date to
Unitholders of record on the preceding Income Record Date. See "Summary of
Essential Financial Information." Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units,
pay the deferred sales charge or pay expenses, will be distributed annually on
the Capital Account Distribution Date to Unitholders of record on the preceding
Capital Account Record Date. The Trustee is not required to pay interest on
funds held in the Capital or Income Accounts (but may itself earn interest
thereon and therefore benefits from the use of such funds). The Trustee is
authorized to reinvest any funds held in the Capital or Income Accounts, pending
distribution, in money market funds or U.S. Treasury obligations which mature on
or before the next applicable distribution date. Any obligations so acquired
must be held until they mature and proceeds therefrom may not be reinvested.
The distribution to Unitholders as of the record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Persons who purchase Units will commence receiving
distributions only after such person becomes a record owner. Notification to the
Trustee of the transfer of Units is the responsibility of the purchaser, but in
the normal course of business such notice is provided by the selling
broker-dealer.
As of the first day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account amounts necessary to pay the expenses of the Trust (as determined on the
basis set forth under "Trust Operating Expenses"). The Trustee also may withdraw
from said accounts such amounts, if any, as it deems necessary to establish a
reserve for any governmental charges payable out of the Trust. Amounts so
withdrawn shall not be considered a part of the Trust's assets available for
distribution to Unitholders until such time as the Trustee shall return all or
any part of such amounts to the appropriate accounts. In addition, the Trustee
may withdraw from the Income and Capital Account such amounts as may be
necessary to cover redemptions of Units.
It is anticipated that the deferred sales charge will be collected from the
Capital Account and that amounts in the Capital Account will be sufficient to
cover the cost of the deferred sales charge. To the extent that amounts in the
Capital Account are insufficient to satisfy the then current deferred sales
charge obligation, Securities may be sold to meet such shortfall. Distributions
of amounts necessary to pay the deferred portion of the sales charge will be
made to an account maintained by the Trustee for purposes of satisfying
Unitholders' deferred sales charge obligations.
REPORTS PROVIDED. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of income and the
amount of other receipts (received since the preceding distribution), if any,
being distributed, expressed in each case as a dollar amount representing the
pro rata share of each Unit of the Trust outstanding. Within a reasonable period
of time after the end of each calendar year, the Trustee shall furnish to each
person who at any time during the calendar year was a registered Unitholder of
the Trust a statement (i) as to the Income Account: income received, deductions
for applicable taxes and for fees and expenses of the Trust, for redemptions of
Units, if any, and the balance remaining after such distributions and
deductions, expressed in each case both as a total dollar amount and as a dollar
amount representing the pro rata share of each Unit outstanding on the last
business day of such calendar year; (ii) as to the Capital Account: the dates of
disposition of any Securities and the net proceeds received therefrom,
deductions for payment of applicable taxes, fees and expenses of the Trust held
for distribution to Unitholders of record as of a date prior to the
determination and the balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (iii) a list of the Securities held by the Trust and the number
of Units of the Trust outstanding on the last business day of such calendar
year; (iv) the Redemption Price per Unit of the Trust based upon the last
computation thereof made during such calendar year; and (v) amounts actually
distributed during such calendar year from the Income and Capital Accounts of
the Trust, separately stated, expressed as total dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
REDEMPTION OF UNITS. A Unitholder may redeem all or a portion of his Units
by tender to the Trustee, Investors Fiduciary Trust Company, P.O. Box 419350,
Kansas City, Missouri 64173-0216 and, in the case of Units evidenced by a
certificate, by tendering such certificate to the Trustee, duly endorsed or
accompanied by proper instruments of transfer with signature guaranteed as
described above (or by providing satisfactory indemnity, as in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. No redemption fee will be charged. On the third
business day following such tender the Unitholder will be entitled to receive in
cash an amount for each Unit equal to the Redemption Price per Unit next
computed after receipt by the Trustee of such tender of Units as of the
Evaluation Time set forth under "Summary of Essential Financial Information."
The "date of tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after the applicable
Evaluation Time the date of tender is the next business day as defined under
"Public Offering--Offering Price" and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption price
computed on that day.
The Trustee is empowered to sell Securities of the Trust in order to make
funds available for redemption if funds are not otherwise available in the
Capital and Income Accounts to meet redemptions. The Securities to be sold will
be selected by the Trustee from those designated on a current list provided by
the Supervisor for this purpose. Units so redeemed shall be cancelled. Units
tendered for redemption prior to such time as the entire deferred sales charge
on such Units has been collected will be assessed the amount of the remaining
deferred sales charge at the time of redemption.
To the extent that Securities are sold, the size of the Trust will be, and
the diversity of the Trust may be, reduced. Sales may be required at a time when
Securities would not otherwise be sold and may result in lower prices than might
otherwise be realized. The price received upon redemption may be more or less
than the amount paid by the Unitholder depending on the value of the Securities
in the portfolio at the time of redemption.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate underlying
value of the Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust. On the Initial Date of Deposit, the Public
Offering Price per Unit (which includes the sales charge) exceeded the value at
which Units could have been redeemed by the amount shown under "Summary of
Essential Financial Information." The Redemption Price per Unit is the pro rata
share of each Unit determined on the basis of (i) the cash on hand in the Trust,
(ii) the value of the Securities in the Trust and (iii) dividends receivable on
the Equity Securities of the Trust trading ex-dividend as of the date of
computation, less (a) amounts representing taxes or other governmental charges
payable out of the Trust and (b) the accrued expenses of the Trust. The
Evaluator may determine the value of the Securities in the Trust in the
following manner: if the Securities are listed on a national securities exchange
or the NASDAQ National Market System, this evaluation is generally based on the
closing sale prices on that exchange or that system (unless it is determined
that these prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange or system, at the closing bid prices. If the
Securities of the Trust are not so listed or, if so listed and the principal
market therefore is other than on the exchange, the evaluation shall generally
be based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of current
bid prices for comparable securities, (b) by appraising the value of the
Securities of the Trust on the bid side of the market or (c) by any combination
of the above.
The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than for
customary weekend and holiday closings, or any period during which the
Securities and Exchange Commission determines that trading on that Exchange is
restricted or an emergency exists, as a result of which disposal or evaluation
of the Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
SPECIAL REDEMPTION AND ROLLOVER IN NEW FUND. It is expected that a special
redemption will be made of all Units of the Trust held by any Unitholder (a
"ROLLOVER UNITHOLDER") who affirmatively notifies the Trustee in writing that he
desires to roll over his Units by the Rollover Notification Date specified in
the "Summary of Essential Financial Information."
Investors should be aware that the staff of the Division of Investment
Management of the Securities and Exchange Commission is of the view that the
rollover option described in this Prospectus constitutes an "exchange offer" for
the purposes of Section 11(c) of the Investment Company Act of 1940, and would
therefore be prohibited absent an exemptive order. An application which was
submitted by the Sponsor for an exemptive order under Section 11(c) which would
permit it to offer the rollover option has been "noticed" by the SEC but no
assurance can be given that the SEC will issue such an order.
All Units of Rollover Unitholders will be redeemed during the Special
Redemption Period and the underlying Securities will be distributed to the
Distribution Agent on behalf of the Rollover Unitholders. During the Special
Redemption Period (as set forth in "Summary of Essential Financial
Information"), the Distribution Agent will be required to sell all of the
underlying Securities on behalf of Rollover Unitholders. The sales proceeds will
be net of brokerage fees, governmental charges or any expenses involved in the
sales.
The Distribution Agent will engage the Sponsor as its agent to sell the
distributed Securities. The Sponsor will attempt to sell the Securities as
quickly as is practicable during the Special Redemption and Liquidation Period.
The Sponsor does not anticipate that the period will be longer than 10 business
days, and it could be as short as one day, given that the Securities are usually
highly liquid. The liquidity of any Security depends on the daily trading volume
of the Security and the amount that the Sponsor has available for sale on any
particular day.
It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Securities: for highly liquid
Securities, the Sponsor will generally sell Securities on the first day of the
Special Redemption and Liquidation Period; for less liquid Securities, on each
of the first two days of the Special Redemption and Liquidation Period, the
Sponsor will generally sell any amount of any underlying Securities at a price
no less than 1/2 of one point under the closing sale price of those Securities
on the preceding day. Thereafter, the Sponsor intends to sell without any price
restrictions at least a portion of the remaining underlying Securities, the
numerator of which is one and the denominator of which is the total number of
days remaining (including that day) in the Special Redemption and Liquidation
Period.
The Rollover Unitholders' proceeds will be invested in the next subsequent
series of the Trust (the "1997 FUND"), if then being offered, the portfolio of
which will be selected prior to the initial date of deposit of the 1997 Fund.
The proceeds of redemption available on each day will be used to buy 1997 Fund
units in the portfolio as the proceeds become available.
The Sponsor intends to create the 1997 Fund as quickly as possible after
the commencement of the Special Redemption Date, dependent upon the availability
and reasonably favorable prices of the Securities included in the 1997 Fund
portfolio, and it is intended that Rollover Unitholders will be given first
priority to purchase the 1997 Fund units. There can be no assurance, however, as
to the exact timing of the creation of the 1997 Fund units or the aggregate
number of 1997 Fund units which the Sponsor will create. The Sponsor may, in its
sole discretion, stop creating new units at any time it chooses, regardless of
whether all proceeds of the Special Redemption have been invested on behalf of
Rollover Unitholders. Cash which has not been invested on behalf of the Rollover
Unitholders in 1997 Fund units will be distributed shortly after of the Special
Redemption Date.
Any Rollover Unitholder may thus be redeemed out of the Fund and become a
holder of an entirely different unit investment trust in the 1997 Fund with a
different portfolio of Securities. The Rollover Unitholders' Units will be
redeemed and the distributed Securities shall be sold during the Special
Redemption Period. In accordance with the Rollover Unitholders' offer to
purchase the 1997 Fund units, the proceeds of the sales (and any other cash
distributed upon redemption) will be invested in the 1997 Fund portfolio at the
public offering price, including the applicable sales charge per Unit (which for
Rollover Unitholders is currently expected to be 1.9% of the Public Offering
Price of the 1997 Fund units).
This process of redemption and rollover into a new trust is intended to
allow for the fact that the portfolio selected by the Sponsor is chosen on the
basis of growth and income potential only for a year, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption and
rollover in new unit investment trusts will be available for the 1997 Fund and
each subsequent series of the Fund, approximately a year after that Series'
creation.
The Sponsor believes that the gradual redemption and rollover in the Trust
will help mitigate any negative market price consequences stemming from the
trading of large volumes of securities and of the underlying Securities in the
Trust in a short, publicized period of time. The above procedures may, however,
be insufficient or unsuccessful in avoiding such price consequences. In fact,
market price trends may make it advantageous to sell or buy more quickly or more
slowly than permitted by these procedures. Rollover Unitholders could then
receive a less favorable average unit price than if they bought all their units
of the 1997 Fund on any given day of the period.
It should also be noted that Rollover Unitholders may realize taxable
capital gains on the Special Redemption and Rollover but, in certain
circumstances, will not be entitled to a reduction for certain capital losses
and, due to the procedures for investing in the subsequent Trust, no cash would
be distributed at that time to pay any taxes. Included in the cash for the
Special Redemption and Rollover will be any amount of cash attributable to the
last distribution of dividend income; accordingly, Rollover Unitholders also
will not have such cash distributed to pay any taxes. See "Taxation."
In addition, during this period a Unitholder will be at risk to the extent
that the Securities are not sold and will not have the benefit of any stock
appreciation to the extent that moneys have not been invested; for this reason,
the Sponsor will be inclined to sell and purchase the Securities in as short a
period as it can without materially adversely affecting the price of the
Securities.
Unitholders who do not inform the Distribution Agent that they wish to have
their Units so redeemed and liquidated ("Remaining Unitholders") will continue
to hold Units of the Trust as described in this Prospectus until the Trust is
terminated or until the Mandatory Termination Date listed in the "Summary of
Essential Financial Information," whichever occurs first. These Remaining
Unitholders will not realize capital gains or losses due to the Special
Redemption and Rollover and will not be charged any additional sales charge. If
a large percentage of Unitholders become Rollover Unitholders, the aggregate
size of the Trust will be sharply reduced and, as a consequence, expenses might
constitute a higher percentage amount per Unit of the Trust than prior to such
Special Redemption and Rollover. The Trust might also reduce to the Minimum
Termination Value set forth in the "Summary of Essential Financial Information"
because of the lesser number of Units in the Trust, and possibly also due to a
value reduction, however temporary, in Units caused by the Sponsor's sales of
Securities; if so, the Sponsor could then choose to liquidate the Trust without
the consent of the remaining Unitholders. See "Trust Administration--Amendment
or Termination." The Securities remaining in the Trust after the Special
Redemption Period will be sold by the Sponsor as quickly as possible without, in
its judgment, materially adversely affecting the market price of the Securities.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the 1997 Fund or any subsequent series of the Fund, without penalty or
incurring liability to any Unitholder. If the Sponsor so decides, the Sponsor
shall notify the Unitholders before the Special Redemption Period would have
commenced. All Unitholders will then be Remaining Unitholders, with rights to
ordinary redemption as before. The Sponsor may modify the terms of the 1997 Fund
or any subsequent series of the Fund. The Sponsor may also modify the terms of
the Special Redemption and Rollover in the 1997 Fund upon notice to the
Unitholders prior to the Rollover Notification Date specified in the related
"Summary of Essential Financial Information."
TRUST ADMINISTRATION
SPONSOR PURCHASES OF UNITS. The Trustee shall notify the Sponsor of any
Units tendered for redemption. If the Sponsor's bid in the secondary market at
that time equals or exceeds the Redemption Price per Unit, it may purchase such
Units by notifying the Trustee before the close of business on the next
succeeding business day and by making payment therefor to the Unitholder not
later than the day on which the Units would otherwise have been redeemed by the
Trustee. Units held by the Sponsor may be tendered to the Trustee for redemption
as any other Units.
The offering price of any Units acquired by the Sponsor will be in accord
with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Sponsor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.
PORTFOLIO ADMINISTRATION. The portfolio of the Trust is not "managed" by
the Sponsor, Supervisor or the Trustee; their activities described herein are
governed solely by the provisions of the Trust Agreement. Traditional methods of
investment management for a managed fund typically involve frequent changes in a
portfolio of securities on the basis of economic, financial and market analyses.
While the Trust will not be managed, the Trust Agreement, however, provides that
the Sponsor may (but need not) direct the Trustee to dispose of a Security in
certain events such as the issuer having defaulted on the payment on any of its
outstanding obligations or the price of a Security has declined to such an
extent as a result of serious adverse credit factors affecting the issuer of the
Security such that in the opinion of the Sponsor the retention of such Security
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Securities such as those acquired in connection with a
merger or other transaction. The proceeds from such sales, if any, will be
deposited in the Capital Account of the Trust. If offered such new or exchanged
securities or property, the Trustee shall reject the offer. However, in the
event such securities or property are nonetheless acquired by the Trust, they
may be accepted for deposit in such Trust and either sold by the Trustee or held
in such Trust pursuant to the direction of the Sponsor (who may rely on the
advice of the Supervisor). Proceeds from the sale of Securities (or any
securities or other property received by the Fund in exchange for Securities)
are credited to the Capital Account for distribution to Unitholders, pay an
accrued deferred sales charge or to meet redemptions. Except as stated under
"Trust Portfolio" for failed securities and as provided in this paragraph, the
acquisition by the Trust of any securities other than the Securities is
prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above, the
Trustee may also sell Securities designated by the Supervisor, or if no such
designation has been made, in its own discretion, for the purpose of redeeming
Units of the Trust tendered for redemption and the payment of expenses.
The Supervisor, in designating Securities to be sold by the Trustee, will
generally make selections in order to maintain, to the extent practicable, the
proportionate relationship among the number of shares of individual issues of
Securities in the Trust. To the extent this is not practicable, the composition
and diversity of the Securities in such Trust may be altered. In order to obtain
the best price for the Trust, it may be necessary for the Supervisor to specify
minimum amounts (generally 100 shares) in which blocks of Securities are to be
sold.
AMENDMENT OR TERMINATION. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor and
the Trustee), provided, however, that the Trust Agreement may not be amended to
increase the number of Units (except as provided in the Trust Agreement). The
Trust Agreement may also be amended in any respect by the Trustee and Sponsor,
or any of the provisions thereof may be waived, with the consent of the holders
representing 51% of the Units of the Trust then outstanding, provided that no
such amendment or waiver will reduce the interest in the Trust of any Unitholder
without the consent of such Unitholder or reduce the percentage of Units
required to consent to any such amendment or waiver without the consent of all
Unitholders. The Trustee shall advise the Unitholders of any amendment promptly
after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders
representing 66-2/3% of the Units of the Trust then outstanding or by the
Trustee when the value of the Securities owned by the Trust, as shown by any
evaluation, is less than that amount set forth under Minimum Termination Value
in the "Summary of Essential Financial Information."The Trust will be liquidated
by the Trustee in the event that a sufficient number of Units of the Trust not
yet sold are tendered for redemption by the Underwriters or the Sponsor, so that
the net worth of the Trust would be reduced to less than 40% of the value of the
Securities at the time they were deposited in the Trust. If the Trust is
liquidated because of the redemption of unsold Units by the Underwriters,
including the Sponsor, the Sponsor will refund to each purchaser of Units the
entire sales charge paid by such purchaser. The Trust Agreement will terminate
upon the sale or other disposition of the last Security held thereunder, but in
no event will it continue beyond the Mandatory Termination Date stated under
"Summary of Essential Financial Information."
Commencing on the Mandatory Termination Date, Securities will begin to be
sold in connection with the termination of the Fund. The Sponsor will determine
the manner, timing and execution of the sales of the Securities. At least 30
days before the Mandatory Termination Date the Trustee will provide written
notice of any termination to all Unitholders. Unitholders who do not elect the
Rollover Option will receive a cash distribution from the sale of the remaining
Securities within a reasonable time following the Mandatory Termination Date.
Regardless of the distribution involved, the Trustee will deduct from the funds
of the Trust any accrued costs, expenses, advances or indemnities provided by
the Trust Agreement, including estimated compensation of the Trustee, costs of
liquidation and any amounts required as a reserve to provide for payment of any
applicable taxes or other governmental charges. Any sale of Securities in the
Trust upon termination may result in a lower amount than might otherwise be
realized if such sale were not required at such time. The Trustee will then
distribute to each Unitholder his pro rata share of the balance of the Income
and Capital Accounts of the Trust.
The Sponsor currently intends to, but is not obligated to, offer for sale
units of a subsequent series of the Trust pursuant to the Rollover Option (see
"Rights of Unitholders--Special Redemption and Rollover in New Fund"). There is,
however, no assurance that units of any new series of such Fund will be offered
for sale at that time, or if offered, that there will be sufficient units
available for sale to meet the requests of any or all Unitholders. The Sponsor
will attempt to sell any remaining Securities as quickly as possible commencing
on the Mandatory Termination Date without in the judgment of the Sponsor
materially adversely affecting the market price of the Securities. The Sponsor
does not anticipate that the period will be longer than one month, and it could
be as short as one day, depending on the liquidity of the Securities being sold.
The liquidity of any Security depends on the daily trading volume of the
Security and the amount that the Sponsor has available on any particular day.
Within 60 days of the final distribution, Unitholders will be furnished
a final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof
to Unitholders in the same manner.
LIMITATIONS ON LIABILITIES. The Sponsor, the Evaluator, the Supervisor and
the Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason
of the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act thereunder
and shall not be liable for any action taken by it in good faith under the Trust
Agreement. The Trustee shall not 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 under the Trust Agreement or upon or in respect of
the Trust which the Trustee 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 addition, the Trust Agreement contains other customary
provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be made
in good faith upon the basis of the best information available to it, provided,
however, that the Evaluator shall be under no liability to the Trustee, Sponsor
or Unitholders for errors in judgment. This provision shall not protect the
Evaluator in any case of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties.
SPONSOR. Voyageur Fund Managers, Inc. is the Sponsor of the Fund and
Voyageur Fund Distributors, Inc. is the primary distributor of Fund Units.
Voyageur Fund Managers, Inc. and Voyageur Fund Distributors, Inc. are each
indirect wholly-owned subsidiaries of Dougherty Financial Group, Inc. ("DFG"),
which is owned approximately 49% by Michael E. Dougherty, 49% by Pohlad
Companies and less than 1% by certain benefit plans for the employees of DFG and
its subsidiaries.
Mr. Dougherty co-founded the predecessor of DFG in 1977 and has served as
DFG's Chairman of the Board and Chief Executive Officer since inception. Pohlad
Companies is a holding company owned in equal parts by each of James O. Pohlad,
Robert C. Pohlad and William M. Pohlad. As of November 30, 1995, Voyageur Fund
Managers, Inc. served as the manager to six closed-end and ten open-end
investment companies (comprising 29 separate investment portfolios),
administered numerous private accounts and managed approximately $8.0 billion in
assets. The principal business address for both Voyageur Fund Managers, Inc. and
Voyageur Fund Distributors, Inc. is 90 South Seventh Street, Suite 4400,
Minneapolis, Minnesota 55402. As of November 30, 1995, the total stockholders'
equity of Voyageur Fund Mangers, Inc. was $6,083,405 (unaudited). (This
paragraph relates only to the Sponsor and not to the Fund or to any Series
thereof or to any of the Underwriters. The information is included herein only
for the purpose of informing investors as to the financial responsibility of the
Sponsor and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and not
exceeding amounts prescribed by the Securities and Exchange Commission, (ii)
terminate the Trust Agreement and liquidate the Fund as provided therein or
(iii) continue to act as Trustee without terminating the Trust Agreement.
EVALUATOR. The Sponsor also serves as Evaluator. The Evaluator may resign
or be removed by the Trustee in which event the Sponsor and/or the Trustee are
to use their best efforts to appoint a satisfactory successor. Such resignation
or removal shall become effective upon acceptance of appointment by the
successor evaluation. If upon resignation of the Evaluator no successor has
accepted appointment within 30 days after notice of resignation, the Evaluator
may apply to a court of competent jurisdiction for the appointment of a
successor. Notice of such resignation or removal and appointment shall be mailed
by the Trustee to each Unitholder.
TRUSTEE. The Trustee, Investors Fiduciary Trust Company, is a trust company
specializing in investment related services, organized and existing under the
laws of Missouri, having its trust office at 127 West 10th Street, Kansas City,
Missouri 64105. The Trustee is subject to supervision and examination by the
Division of Finance of the State of Missouri and the Federal Deposit Insurance
Corporation.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books
of record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Fund. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
LEGAL OPINIONS. The legality of the Units offered hereby has been passed
upon by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS. The statement of net assets and
the related schedule of investments as of the opening of business on the Initial
Date of Deposit included in this Prospectus have been included herein in
reliance upon the report of KPMG Peat Marwick LLP, independent auditors,
appearing elsewhere herein and the authority of said firm as experts in
accounting and auditing.
INDEPENDENT AUDITORS' REPORT
TO THE SPONSOR, TRUSTEE AND THE UNITHOLDERS OF VOYAGEUR UNIT INVESTMENT
TRUST, SERIES 4 ("VOYAGEUR EQUITY TRUST, SERIES 1" OR " MINNESOTA'S BIG TEN
EQUITY TRUST, SERIES 1"):
We have audited the accompanying statement of net assets, including the
schedule of investments, of Voyageur Unit Investment Trust, Series 4 ("Voyageur
Equity Trust, Series 1" or Minnesota's Big Ten Equity Trust, Series 1") as of
January 3, 1996. The statement of net assets is the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited to purchase securities
by correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation. We believe our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Voyageur Unit Investment
Trust, Series 4 ("Voyageur Equity Trust, Series 1" or "Minnesota's Big Ten
Equity Trust, Series 1") as of January 3, 1996, in conformity with generally
accepted accounting principles.
Minneapolis, Minnesota
January 3, 1996
KPMG PEAT MARWICK LLP
<TABLE>
<CAPTION>
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
STATEMENT OF NET ASSETS
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT, JANUARY 3, 1996
INVESTMENT IN SECURITIES
<S> <C>
Contracts to purchase securities (1)......................................................... $ 400,769
Organizational and Offering Costs (2)........................................................ 24,398
------
Total................................................................................... $ 425,167
=======
LIABILITY AND INTEREST OF UNITHOLDERS
Liabilities --
Accrued Organizational and Offering Costs (2)........................................... 24, 398
Payment of Deferred portion of sales charge (3)......................................... 7,692
-------
Total Liabilities....................................................................... 32,090
------
Interest of Unitholders --
404,817 Units of fractional undivided interest outstanding:
Cost to investors (4)........................................................................ $ 404,817
Gross underwriting commission (4,5).......................................................... (11,740)
--------
Net Amount Applicable to Unitholders......................................................... 393,077
-------
Total .................................................................................. $ 425,167
=======
</TABLE>
1 The aggregate value of the Securities listed under "Portfolio" herein and
their cost to the Trust are the same. The value of the Securities is
determined by Voyageur Fund Managers, Inc. as set forth under "Public
Offering--Offering Price." The contracts to purchase Securities are
collateralized by an irrevocable letter of credit of $410,000 which has
been deposited with the Trustee.
2 The Trust (and therefore Unitholders) will bear all or a portion of its
organizational and offering costs, which will be deferred and charged off
against capital at the end of the initial offering period. Organizational
and offering costs have been estimated based on a projected Trust size of
$10,000,000. To the extent the Trust is larger or smaller, the estimate
will vary.
3 Represents the aggregate amount of mandatory distributions of $19.00 per
1,000 units per month payable on the 1st day of each month from April 1,
1996 through January 1, 1997. Distributions will be made to an account
maintained by the Trustee from which the Unitholder's Deferred Sales
Charges obligation to the Sponsor will be satisfied. If Units are redeemed
prior to January 1, 1997, the remaining portion of the distribution
applicable to such Units will be transferred to such account on the
redemption date.
4 The aggregate public offering price and the aggregate initial sales charge
are computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Underwriter Compensation" and assume all
single transactions involve less than $100,000. For single transactions in
excess of this amount, the sales charge is reduced (see "Public
Offering--General") resulting in an equal reduction in both the Cost to
investors and the Gross underwriting commission while the Net amount
applicable to Unitholders remains unchanged.
5 Gross underwriting commission includes a deferred sales charge of $.019 per
Unit.
<TABLE>
<CAPTION>
MINNESOTA'S BIG TEN EQUITY TRUST, SERIES 1
SCHEDULE OF PORTFOLIO SECURITIES (VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4)
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT: JANUARY 3, 1996
Number Price Per Cost of Current
of % of Annual Share to Securities Dividend
ISSUER (1) SHARES TRUST(5) DIVIDEND(4) TRUST (2) TO TRUST(2) YIELD(3)
- ------ ------ ------ -------- ----- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Deluxe Corporation 1,400 10.04% $1.48 $28.750 $40,250 5.15%
International Multifoods
Corporation 2,000 10.11 .80 20.250 40,500 3.95
Jostens, Inc. 1,700 10.07 .88 23.750 40,375 3.71
General Mills, Inc. 650 9.55 1.88 58.875 38,269 3.19
Supervalu, Inc. 1,300 10.14 .98 31.250 40,625 3.14
Norwest Corporation 1,200 9.84 .96 32.875 39,450 2.92
First Bank System, Inc. 800 10.13 1.45 50.750 40,600 2.86
St. Paul Companies, Inc. 700 9.87 1.60 56.500 39,550 2.83
Minnesota Mining
and Manufacturing Co. 600 10.14 1.88 67.750 40,650 2.77
Bemis Company, Inc. 1,500 10.11 .64 27.000 40,500 2.37
----- ------
Total 100.00% $400,769
======= ========
</TABLE>
Notes to Schedule of Portfolio Securities
1 All of the Securities are represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited
with the Trustee. At the Initial Date of Deposit, the Sponsor has assigned
to the Trustee all of its right, title and interest in and to such
Securities. Contracts to acquire Securities were entered into on January 2,
1996 and are expected to settle on January 5, 1996. The aggregate purchase
price (excluding commissions) and profit to the Sponsor for the securities
deposited in the Trust is $400,269 and $500, respectively.
2 The market value of each of the Securities is based on the aggregate
underlying value of the Securities acquired (generally determined by the
closing sale prices of the listed Securities and the ask prices of
over-the-counter traded Securities on the business day prior to the Initial
Date of Deposit as provided by the Trustee).
3 Current Dividend Yield for each Security was calculated by annualizing the
last quarterly or semi-annual dividend received on that Security and
dividing the result by that Security's market value as of the closing of
trading on January 2, 1996.
4 Based on the latest quarterly or semi-annual dividend received. There can
be no assurance that future dividend payments, if any, will be maintained
at the indicated amount.
5 Based on Cost of Securities to Trust.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund,
the Sponsor or the Underwriters. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such state.
================================================================================
TABLE OF CONTENTS
TITLE PAGE
Summary of Essential Financial
Information...................................5
The Trust.........................................8
Objectives and Securities Selection...............10
Trust Portfolio...................................12
Risk Factors......................................15
Taxation..........................................16
Trust Operating Expenses..........................19
Public Offering...................................21
Rights of Unitholders.............................25
Trust Administration..............................31
Other Matters.....................................36
Independent Auditors' Report......................37
Statements of Net Assets..........................38
Schedule of Portfolio Securities..................40
Notes to Schedule of Portfolio
Securities....................................40
================================================================================
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and exhibits relating thereto, which the Fund has filed with the Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.
PROSPECTUS
================================================================================
January 3, 1996
VOYAGEUR UNIT INVESTMENT TRUST,
SERIES 4
MINNESOTA'S BIG TEN EQUITY TRUST,
SERIES 1
================================================================================
VOYAGEUR FUND MANAGERS, INC.
90 SOUTH SEVENTH STREET,
SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
PLEASE RETAIN THIS PROSPECTUS FOR FUTURE
REFERENCE.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6
The Cross-Reference Sheet
The Prospectus
The signatures
The following exhibits:
1.1 Standard Terms and Conditions of Trust - Voyageur Equity Trust Series 1 and
Subsequent Series, dated January 3, 1996 filed as an exhibit hereto.
1.2 Form of Trust Agreement for Voyageur Unit Investment Trust, Series 4.
2. Opinion of counsel to the Sponsor as to legality of the securities being
registered including a consent to the use of its name under the headings
"Taxation" and "Legal Opinions" in the Prospectus and opinion of counsel as
to Federal income tax status of the securities being registered.
3. None.
4. Not applicable.
5. Financial Data Schedules filed hereto electronically as Exhibit(s) 27
pursuant to Rule 401 of Regulation S-T.
6. Written Consent of Independent Auditors' - KPMG Peat Marwick LLP.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Voyageur Unit Investment Trust, Series 4, has duly caused this Amendment No. 3
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis and State of Minnesota on
the 2nd day of January, 1996.
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
(Registrant)
By: Voyageur Fund Managers, Inc.
(Depositor)
By: /s/Thomas J. Abood
-------------------------------
General Counsel and Senior
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on by the following person in the
capacity indicated and on January 2, 1996.
SIGNATURE TITLE
MICHAEL E. DOUGHERTY
- ------------------------- Chairman of the Board
Michael E. Dougherty and Director
JOHN G. TAFT
- -------------------------
John G. Taft Chief Executive Officer and Director
EDWARD J. KOHLER
- -------------------------
Edward J. Kohler Director
FRANK C. TONNEMAKER
- -------------------------
Frank C. Tonnemaker Director
JANE M. WYATT
- -------------------------
Jane M. Wyatt Director
/s/Thomas J. Abood
------------------------
Thomas J. Abood
Thomas J. Abood signs this document pursuant to a Power of Attorney filed
with the Securities and Exchange Commission with the Registration Statement on
Form S-6 for Voyageur Tax-Exempt Trust, Series 5 (Registration No. 33-62681).
================================================================================
VOYAGEUR EQUITY TRUST, SERIES 1
and certain subsequent Series
STANDARD TERMS AND CONDITIONS OF TRUST
DATED: January 3, 1996
BETWEEN
VOYAGEUR FUND MANAGERS, INC.
Depositor
AND
INVESTORS FIDUCIARY TRUST COMPANY
Trustee
===============================================================================
<TABLE>
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VOYAGEUR EQUITY TRUST
STANDARD TERMS AND CONDITIONS OF TRUST
for Series for which Investors Fiduciary Trust Company
may act as Trustee
EFFECTIVE
January 3, 1996
INDEX
<S> <C>
ARTICLE I DEFINITIONS...........................................................................................1
Agreement.................................................................................................................1
Business Day..............................................................................................................2
Capital Account...........................................................................................................2
Capital Distribution Date.................................................................................................2
Certificate...............................................................................................................2
Contract Securities.......................................................................................................5
Deferred Sales Charge.....................................................................................................5
Depositor.................................................................................................................5
Distribution Agent........................................................................................................5
Evaluation Time...........................................................................................................5
Evaluator.................................................................................................................5
Fund......................................................................................................................5
In Kind Distribution......................................................................................................5
Income Account............................................................................................................5
Income Distribution.......................................................................................................6
Income Distribution Date..................................................................................................6
Initial Date of Deposit...................................................................................................6
Mandatory Termination Date................................................................................................6
Program Agent.............................................................................................................6
Record Date...............................................................................................................6
Redemption Date...........................................................................................................6
Redemption Price..........................................................................................................6
Reserve Account...........................................................................................................6
Rollover Distribution.....................................................................................................7
Rollover Notification Date................................................................................................7
Rollover Unitholder.......................................................................................................7
Securities................................................................................................................7
Special Redemption Period.................................................................................................7
Supplement Trust Agreement................................................................................................7
Trust Agreement...........................................................................................................7
Trust Fund or Trust.......................................................................................................7
Trust Fund Evaluation.....................................................................................................8
Trustee...................................................................................................................8
Unit......................................................................................................................8
Unitholder................................................................................................................8
Unit Value................................................................................................................8
ARTICLE II DEPOSIT OF SECURITIES, ACCEPTANCE OF TRUST, ISSUANCE OF UNITS; FORM OF
CERTIFICATES..........................................................................................8
Section 2.01. Deposit of Securities.............................................................................8
Section 2.02. Acceptance of Trust..............................................................................10
Section 2.03. Issuance of Units................................................................................10
Section 2.04. Form of Certificates.............................................................................11
ARTICLE III ADMINISTRATION OF FUND...............................................................................11
Section 3.01. Certain Moneys to be Credited to Income Account..................................................11
Section 3.02. Certain Moneys to be Credited to Capital Account.................................................11
Section 3.03. Establishment of Reserve Account.................................................................12
Section 3.04. Certain Deductions and Distributions.............................................................12
Section 3.05. Statements and Reports...........................................................................15
Section 3.06. Extraordinary Sale of Securities.................................................................16
Section 3.07. Counsel..........................................................................................17
Section 3.08. Action by Trustee Regarding Securities...........................................................17
Section 3.09. Notice of Change in Capital Account..............................................................18
Section 3.10. Limited Replacement of Special Securities........................................................18
Section 3.11. Compensation of Depositor for Supervisory Services...............................................19
Section 3.12. Deferred Sales Charge............................................................................20
ARTICLE IV EVALUATION OF SECURITIES; THE EVALUATOR..............................................................20
Section 4.01. Evaluation of Securities.........................................................................20
Section 4.02. Certain Information to Be Made Available.........................................................21
Section 4.03. Compensation of the Evaluator....................................................................21
Section 4.04. Liability of the Evaluator.......................................................................22
Section 4.05. Resignation, Removal and Other Matters Relating to the Evaluator.................................22
ARTICLE V TRUST FUND EVALUATION; REDEMPTION OF UNITS...........................................................23
Section 5.01. Trust Fund Evaluation............................................................................23
Section 5.02. Redemption of Units; Sale of Securities..........................................................23
Section 5.03. Rollover of Units................................................................................25
ARTICLE VI ISSUANCE, TRANSFER, INTERCHANGE AND REPLACEMENT OF CERTIFICATES......................................27
Section 6.01. Issuance of Certificates.........................................................................27
Section 6.02. Transfer of Units; Interchange of Certificates...................................................27
Section 6.03. Replacement of Certificates......................................................................28
Section 6.04. Form of Certificate..............................................................................28
ARTICLE VII DEPOSITOR............................................................................................29
Section 7.01. Certain Matters Regarding Succession.............................................................29
Section 7.02. Liability of Depositor and Indemnification.......................................................29
ARTICLE VIII TRUSTEE..............................................................................................30
Section 8.01. General Matters Relating to the Trustee..........................................................30
Section 8.02. Books, Records and Reports.......................................................................32
Section 8.03. Reports to Securities and Exchange Commission and Others.........................................32
Section 8.04. Agreement and List of Securities on File.........................................................32
Section 8.05. Compensation of Trustee..........................................................................32
Section 8.06. Resignation, Discharge or Removal of the Trustee; Successors.....................................33
Section 8.07. Qualification of Trustee.........................................................................35
Section 8.08. Collateral.......................................................................................35
ARTICLE IX TERMINATION..........................................................................................35
Section 9.01. Procedure Upon Termination.......................................................................35
Section 9.02. Notice to Unitholders............................................................................36
Section 9.03. Moneys to be Held in Trust Without Interest......................................................37
Section 9.04. Dissolution of Depositor Not to Terminate........................................................37
ARTICLE X MISCELLANEOUS PROVISIONS.............................................................................37
Section 10.01. Amendment and Waiver.............................................................................37
Section 10.02. Initial Costs....................................................................................38
Section 10.03. Registration (Initial and Current) of Units and Fund.............................................38
Section 10.04. Certain Matters Relating to Unitholders..........................................................38
Section 10.05. Missouri Law to Govern...........................................................................39
Section 10.06. Notices..........................................................................................39
Section 10.07. Severability.....................................................................................39
Section 10.08. Separate and Distinct Series.....................................................................39
Execution.......................................................................................................................40
</TABLE>
VOYAGEUR EQUITY TRUST
STANDARD TERMS AND CONDITIONS OF TRUST
for Series for which Investors Fiduciary Trust Company
may act as Trustee
EFFECTIVE January 3, 1996
These Standard Terms and Conditions of Trust, Effective January 3, 1996,
are executed between Voyageur Fund Managers, Inc., as Depositor, and Investors
Fiduciary Trust Company, as Trustee.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
INTRODUCTION
These Standard Terms and Conditions of Trust shall be applicable to each
Series created on or subsequent to the date hereof of Voyageur Equity Trust for
which Investors Fiduciary Trust Company acts as Trustee as provided in this
paragraph. For each such series of Voyageur Equity Trust to which these Standard
Terms and Conditions of Trust are to be applicable, the Depositor and the
Trustee shall execute a Trust Agreement incorporating by reference these
Standard Terms and Conditions of Trust and designating any exclusion from or
exception to such incorporation by reference for the purposes of that series or
variation of the terms hereof for the purposes of that series and specifying for
that series (i) the name of each Trust Fund and (ii) the Securities deposited in
trust for each Trust Fund.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
AGREEMENT
These Standard Terms and Conditions of Trust and all amendments and
supplements hereto and thereto.
BUSINESS DAY
Any day other than a Saturday, Sunday or a day on which the New York Stock
Exchange is closed.
CAPITAL ACCOUNT
The account created pursuant to Section 3.02.
CAPITAL DISTRIBUTION DATE
The meaning assigned to it in the Prospectus for each respective Trust
under the caption "Income and Capital Account Distribution Dates" appearing in
the "Summary of Essential Financial Information."
CERTIFICATE
Any one of the Certificates manually executed by the Trustee in
substantially the following form with the blanks appropriately filled in:
FACE OF CERTIFICATE
NUMBER VOYAGEUR EQUITY TRUST UNITS
CERTIFICATE OF BENEFICIAL OWNERSHIP
THIS CERTIFIES THAT _____________ is the registered owner of Unit(s)_____
of fractional undivided interest in Voyageur Equity Trust of the above Series
(herein referred to as the "TRUST") created under the laws of the State of
Missouri pursuant to the Agreement and the related Trust Agreement, 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 aforesaid
Agreement and the related Trust Agreement to which the holder of this
Certificate by virtue of the acceptance hereof assents and is bound. This
Certificate is transferable and interchangeable by the registered owner in
person or by his duly authorized attorney at the office of the Trustee upon
surrender of this Certificate properly endorsed or accompanied by a written
instrument of transfer 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:
VOYAGEUR FUND MANAGERS, INC., INVESTORS FIDUCIARY TRUST COMPANY,
Depositor Trustee,
127 West 10th Street
Kansas City, Missouri 64105
By___________________________ By_________________________________
Authorized Signature Authorized Signature
REVERSE OF CERTIFICATE
FORM OF ASSIGNMENT
FOR VALUE RECEIVED
hereby sells, assigns and transfers
unto
-------------------------
-------------------------
Please Insert Social Security or Other
Identifying Number of Assignee
-------------------------
-------------------------
the within Certificate and does hereby irrevocably constitute and appoint
_______________, attorney, to transfer the within Certificate on the books of
the Trustee, with full power of substitution in the premises.
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, and must be
guaranteed by a participant in the Securities Transfer Agents
Medallion Program ("STAMP") or such other signature guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by
the Trustee.
Signature Guaranteed
By_______________________
CONTRACT SECURITIES
The Securities listed in Schedule A of the Trust Agreement which are to be
acquired by any Trust Fund pursuant to a contract or contracts for the purchase
of such securities which have been assigned to the Trustee along with the
amounts required for their purchase which have been delivered to the Trustee or
Securities which the Depositor has contracted to purchase for any Trust Fund
pursuant to Section 3.10 hereof.
DEFERRED SALES CHARGE
The meaning assigned to it in Section 3.12.
DEPOSITOR
Voyageur Fund Managers, Inc. or its successors or any successor Depositor
appointed as herein provided.
DISTRIBUTION AGENT
Investors Fiduciary Trust Company acting in its capacity as distribution
agent pursuant to Section 5.03.
EVALUATION TIME
That time stated in the Prospectus for each respective Trust Fund under the
caption "Evaluation Time" appearing in the "Summary of Essential Financial
Information."
EVALUATOR
Voyageur Fund Managers, Inc. or its successors or any successor Evaluator
appointed as herein provided.
FUND
All Trust Funds outstanding under this Agreement.
IN KIND DISTRIBUTION
The meaning assigned to it in Section 5.02.
INCOME ACCOUNT
The account created pursuant to Section 3.01.
INCOME DISTRIBUTION
The meaning assigned to it in Section 3.04.
INCOME DISTRIBUTION DATE
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Income and Capital Account Distribution Dates" appearing in
the "Summary of Essential Financial Information."
INITIAL DATE OF DEPOSIT
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Initial Date of Deposit" appearing in the "Summary of
Essential Financial Information."
MANDATORY TERMINATION DATE
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Mandatory Termination Date" appearing in the "Summary of
Essential Financial Information."
PROGRAM AGENT
Program Agent shall mean Investors Fiduciary Trust Company or its
successors, unless a different Program Agent shall be designated by the Trust
Agreement for a particular Trust Fund.
RECORD DATE
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Income and Capital Account Record Dates" appearing in the
"Summary of Essential Financial Information."
REDEMPTION DATE
The meaning assigned to it in Section 5.02.
REDEMPTION PRICE
The meaning assigned to it in Section 5.02.
RESERVE ACCOUNT
The account created pursuant to Section 3.03.
ROLLOVER DISTRIBUTION
The meaning assigned to it in Section 5.03.
ROLLOVER NOTIFICATION DATE
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Rollover Notification Date" appearing in the "Summary of
Essential Financial Information."
ROLLOVER UNITHOLDER
The meaning assigned to it in Section 5.03.
SECURITIES
The equity securities, including Contract Securities listed in Schedule A
to the Trust Agreement or other securities deposited in the Trust Fund pursuant
to Section 2.01(b) and any obligations received in exchange or substitution for
such securities pursuant to Sections 3.08 or 3.10 hereof, as may from time to
time continue to be held as a part of any Trust Fund.
SPECIAL REDEMPTION PERIOD
The meaning assigned to it in the Prospectus for each respective Trust Fund
under the caption "Special Redemption Period" appearing in the "Summary of
Essential Financial Information."
SUPPLEMENT TRUST AGREEMENT
Shall mean an amendment or supplement to the Trust Agreement executed
pursuant to Section 2.01(b) for the purpose of depositing additional Securities
in the Trust Fund and issuing additional Units.
TRUST AGREEMENT
The Trust Agreement for the particular series of Voyageur Equity Trust into
which these Standard Terms and Conditions of Trust are incorporated.
TRUST FUND OR TRUST
Any one of the separate trusts created by this Agreement and a Trust
Agreement which shall consist of the Securities and all undistributed dividends
or other amounts received thereon and any undistributed cash held in the Capital
and Income Accounts or otherwise realized from the sale, liquidation or exchange
thereof, exclusive of any amounts which may be on deposit in the Reserve
Account.
TRUST FUND EVALUATION
The meaning assigned to it in Section 5.01.
TRUSTEE
Investors Fiduciary Trust Company or its successors or any successor
Trustee appointed as herein provided.
UNIT
The fractional undivided interest in and ownership of an individual Trust
Fund equal initially to the fraction specified in the Prospectus for each
respective Trust Fund under the caption "Fractional Undivided Interest in the
Trust per Unit" appearing in the "Summary of Essential Financial Information,"
the denominator of which fraction shall be (1) increased by the number of any
additional Units issued pursuant to Section 2.03 hereof and (2) decreased by the
number of any such Units redeemed as provided in Section 5.02. Whenever
reference is made herein to the "interest" of a Unitholder in the Trust Fund or
in the Income or Capital Accounts, it shall mean such fractional undivided
interest represented by the number of Units, whether or not evidenced by a
Certificate or Certificates, held of record by such Unitholder in such Trust
Fund.
UNITHOLDER
The holder of any Unit 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 holder of any Unit.
UNIT VALUE
The value of the fractional undivided interest in and ownership of any
individual Trust Fund represented by each Unit as determined by a Trust Fund
Evaluation.
Words importing a singular number shall include the plural number in each
case and vice versa, except as the context herein may clearly indicate otherwise
and words importing persons shall include corporations, partnerships and
associations, as well as natural persons. The words "herein", "hereby",
"herewith", "heretofore", and other singular words or phrases or references and
associations shall refer to the Agreement in its entirety.
ARTICLE II
DEPOSIT OF SECURITIES, ACCEPTANCE OF TRUST, ISSUANCE OF UNITS;
FORM OF CERTIFICATES
SECTION 2.01. DEPOSIT OF SECURITIES. (a) The Depositor, concurrently with
the execution and delivery hereof, hereby grants and conveys all of its right,
title and interest in and to and hereby conveys to and deposits with the Trustee
in an irrevocable Trust the Securities and confirmations of contracts to
purchase Securities, including Contract Securities, listed in Schedule A to the
Trust Agreement 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 for the benefit of each Unitholder to
the extent of such Unitholder's interest in the Trust Fund. The Depositor hereby
also delivers to the Trustee a certified check or checks, cash or cash
equivalents or an irrevocable letter or letters of credit issued by a commercial
bank or banks in an amount necessary to consummate the purchase of any
Securities or Contract Securities. In the event any Securities have not been
delivered to the Trustee on or before the close of business of the Trustee on
the day before the date of expiration of any letter or letters of credit, the
Trustee is hereby directed to draw on such letter or letters of credit unless
the Depositor has either extended or replaced such letter or letters on or
before such close of business.
(b) From time to time following the Initial Date of Deposit for a Trust,
the Depositor is hereby authorized, in its discretion, to assign, convey to and
deposit with the Trustee additional Securities for such Trust, duly endorsed in
blank or accompanied by all necessary instruments of assignment and transfer in
proper form (or Contract Securities), to be held, managed and applied by the
Trustee as herein provided. In lieu of additional Securities or Contract
Securities, the Depositor may deposit with the Trustee cash (or a letter of
credit) in an amount equal to the valuation made in accordance with Section 4.01
for the date of such deposit of the additional Securities not delivered or
represented by Contract Securities together with instructions to purchase such
additional Securities containing such information as the Trustee may require to
settle said transactions. Each deposit of additional Securities shall be made
pursuant to an executed Supplemental Trust Agreement. The Depositor in each case
shall ensure that each deposit of additional Securities pursuant to this Section
shall be, as nearly as is practicable, equal to the original percentage
relationship among the number of shares of each Security as is specified in the
Prospectus for such Trust Fund. The Depositor shall obtain an opinion of counsel
satisfactory to the Depositor as to the validity of each deposit of additional
Securities. Any brokerage fees related to the purchase of Securities deposited
in the Trust Fund after the Initial Date of Deposit shall be an expense of such
Trust Fund. The Depositor shall deliver the additional Securities which were not
delivered concurrently with the deposit of additional Securities and which were
represented by Contract Obligations 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
by the seller thereof for any reason beyond the control of the Depositor or if
for any other reason such 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 amounts, in sufficient to
settle such contract apply the monies in accordance with Section 2.01(d), and
the Depositor shall forthwith take the remedial action specified in Section
3.10. If the Depositor does not take the action specified in Section 3.10 within
10 calendar days of the end of the Additional Securities Delivery Period, the
Trustee shall forthwith take the action specified in Section 3.10.
(c) In connection with the deposits described in Section 2.01(a) and (b),
the Depositor has, 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 Obligations (the
"PURCHASE AMOUNT") relating to Securities which are not actually delivered to
the Trustee at the time of such deposit, the terms of which 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 the Trust.
(d) In the event that the purchase of Securities or Contract Securities
pursuant to any contract shall not be consummated in accordance with said
contract or if the Securities represented by a Contract Obligation are not
delivered to the Trust in accordance with Section 2.01(a) or 2.01(b) and the
monies, or, if applicable, the monies drawn on the Letter of Credit, deposited
by the Depositor are not utilized, and the Depositor does not, on or before the
third Business Day prior to the next following Distribution Date, direct the
Trustee to utilize monies deposited for the purchase of Replacement Securities
or Replacement Contract Securities, the Trustee shall credit to the Capital
Account referred to in Section 3.02 the monies, or, if applicable, the monies
drawn on an irrevocable letter of credit, deposited by the Depositor for the
purpose of such purchase. Such funds shall be distributed pursuant to Section
3.04 to Unitholders of record as of the Record Date next following the failure
of consummation of such purchase. The Depositor shall cause to be refunded to
each Unitholder his pro rata portion of the sales charge levied on the sale of
Units to such Unitholder attributable to such Security or Contract Security.
(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.
(f) In connection with and at the time of any deposit of additional
Securities pursuant to Section 2.01(b), the Depositor shall exactly 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) received by the Trust as of the
date of deposit or receivable by the Trust in respect of distributions declared
but not received as of the date of the deposit, reduced by the amount of any
cash or other property received or receivable.
SECTION 2.02. ACCEPTANCE OF TRUST. The Trustee hereby accepts the trusts
herein created, and the Trustee declares that it holds and will hold the Trust
Fund as Trustee, in trust upon the trusts herein set forth, for the use and
benefit of the present and future Unitholders and subject to the terms and
conditions of the Trust Agreement and this Agreement.
SECTION 2.03. ISSUANCE OF UNITS. (a) The Trustee hereby acknowledges
receipt of the deposit of the Securities listed in Schedule A 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 to or
on the order of the Depositor in exchange therefor delivered documentation
evidencing the ownership of the number of Units specified substantially in the
form above recited representing the ownership of those Units. The Trustee hereby
agrees that on the date of any Supplemental Trust Agreement, it shall
acknowledge that the additional Securities identified therein 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) Units will be held in uncertificated form unless the Trust Fund
Prospectus provides otherwise. Under the terms and conditions of the Trust
Agreement and this Agreement and at such times as are permitted by the Trustee,
Units may also be held in certificated form. Unitholders may elect to have their
Units held in certificated form by making a written request to the Trustee
requesting Units be held in certificated form. The Trustee is entitled to
specify the minimum denomination of any Certificate issued. 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. The rights set forth in this
Agreement of any holder of Units held in certificated form shall be the same as
those of any other Unitholder. Certificates may be transferred as provided in
Article VI.
SECTION 2.04. 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 on the books of the Trustee as herein provided,
executed manually by an authorized signature of the Trustee and by a facsimile
signature of an Authorized Officer of the Depositor and dated the date of
execution and delivery by the Trustee.
ARTICLE III
ADMINISTRATION OF FUND
SECTION 3.01. CERTAIN MONEYS TO BE CREDITED TO INCOME ACCOUNT. The Trustee
shall collect any dividends paid on the Securities for each Trust Fund and
credit any such dividends to a separate account for each Trust Fund to be known
as the "Income Account."
SECTION 3.02. CERTAIN MONEYS TO BE CREDITED TO CAPITAL ACCOUNT. (a) With
respect to each Trust Fund all moneys (except moneys held by the Trustee
pursuant to subsection (b) hereof) other than amounts credited to the Income
Account received by the Trustee in respect of the Securities under this
Agreement shall be credited to a separate account for each Trust Fund to be
known as the "CAPITAL ACCOUNT."
(b) Moneys and/or irrevocable letters of credit required to purchase
Contract Securities or to purchase Securities pursuant to the Depositor's
written instructions, or deposited to secure such purchases, are hereby declared
to be held specially by the Trustee for such purchases and shall not be deemed
to be part of the Capital Account until (i) the Depositor fails to timely
purchase a Contract Security and has not given the Failed Contract Notice (as
defined in Section 3.10) at which time the moneys and/or letters of credit
attributable to the Contract Security not purchased by the Depositor shall be
credited to the Capital Account; or (ii) the Depositor has given the Trustee the
Failed Contract Notice at which time the moneys and/or letters of credit
attributable to failed contracts referred to in such Notice shall be credited to
the Capital Account; PROVIDED, HOWEVEr, that if the Depositor also notifies the
Trustee in the Failed Contract Notice (or by separate notice delivered
concurrently with or prior to the Failed Contract Notice) that it has purchased
or entered into a contract to purchase a New Security (as defined in Section
3.10), the Trustee shall not credit such moneys and/or letters of credit to the
Capital Account unless the New Security shall also have failed or is not
delivered by the Depositor within two business days after the settlement date of
such New Security, in which event the Trustee shall forthwith credit such moneys
and/or letters of credit to the Capital Account. The Depositor shall in any case
forthwith pay to the Trustee and the Trustee shall credit to the Capital Account
the difference, if any, between the purchase price of the failed Contract
Security and the purchase price of the New Security, together with any sales
charge and distribute such moneys to Unitholders pursuant to Section 3.04.
SECTION 3.03. ESTABLISHMENT OF RESERVE ACCOUNT. From time to time the
Trustee may withdraw from the Income or Capital Accounts of each Trust Fund 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 Fund or for indemnification or extraordinary expenses
of the Depositor or Trustee pursuant to Section 7.02, 8.01 or 8.05. Such amounts
so withdrawn shall be credited to a separate account for such Trust Fund 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, in its sole discretion, determines that such
amounts are no longer necessary, then it shall promptly deposit such amounts in
the account from which withdrawn, or if such Trust Fund has been terminated or
shall be in the process of termination, the Trustee, upon such determination,
shall distribute to each Unitholder of such Trust Fund such holder's interest in
the Reserve Account in accordance with Section 9.01.
SECTION 3.04. CERTAIN DEDUCTIONS AND DISTRIBUTIONS. (a) On or before each
Income Distribution Date as of the close of business on the preceding Record
Date the Trustee shall separately with respect to each Trust Fund to which such
Income Distribution Date relates:
(1) 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 8.05 on account of its services theretofore performed
and expenses theretofore incurred;
(2) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to the
Evaluator the amounts that the Evaluator is at the time entitled to receive
pursuant to Section 4.03 on account of its services theretofore performed
and expenses theretofore incurred;
(3) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to counsel an
amount equal to unpaid fees and expenses, if any, of counsel pursuant to
Section 3.07 as certified by the Depositor;
(4) deduct from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account and pay to the
Depositor the amounts that the Depositor is at the time entitled to receive
pursuant to Section 3.11 on account of its services theretofore performed
and expenses theretofore incurred; and
(5) deduct from the Income Account, or, to the extent funds are not
available in such Account, from the Capital Account, and reimburse itself
for any other fees and expenses arising from time to time out of the Trust
operations that the Trustee has paid.
(b) The Trustee shall for each Trust Fund as of the close of business on
the applicable Record Date compute the amount of the income distribution per
Unit for the next Income Distribution Date (each such amount being herein called
the "INCOME DISTRIBUTION") (i) by deducting from the amount actually received
with respect to dividends on the Securities in the Trust Fund during the period
from the Record Date preceding such Record Date (or the Initial Date of Deposit
if such Record Date is the first Record Date) to and including such Record Date
the total of the amounts to be deducted from the Income Account of such Trust
Fund as of such Record Date pursuant to the foregoing provisions of Section
3.04(a) and (ii) by dividing the result of the calculation performed pursuant to
the immediately preceding clause by the number of Units outstanding on the
applicable Record Date. On or shortly after each Income Distribution Date, the
Trustee shall distribute with respect to each Unitholder of the Trust Fund of
record at the close of business on the preceding Record Date an amount
substantially equal to the Income Distribution computed as of such Record Date.
To the extent that moneys in the Capital Account have not been previously
used to pay for the redemption of Units tendered to a Trust Fund, on the Capital
Distribution Dates each Unitholder shall receive such holder's pro rata share of
the cash balance of the Capital Account of the Trust Fund computed as of the
close of business on the preceding Record Date for such Capital Distribution
Date by (i) deducting from such cash balance the total of (X) cash required to
cover contracts to purchase Securities, (Y) cash required for the redemption of
unredeemed tendered Units and (Z) the sum of the amounts to be deducted from the
Capital Account as of each such Record Date pursuant to the foregoing provisions
of Section 3.04(a) and (ii) dividing the amount so obtained by the number of
Units outstanding on the Record Date immediately preceding such Capital
Distribution Date.
In making the computation of any Unitholder's interest in the balance of
the Income and Capital Accounts, fractions of less than one cent per Unit shall
be omitted. In addition, the Trustee in its discretion may on any Distribution
Date determine that the amount to be distributed to Unitholders should be more
or less than the amount of the applicable Income or Capital Distribution per
Unit because of any unusual or extraordinary increase or decrease in the
expenses incurred or expected to be incurred by such Trust Fund. The Trustee
shall not be obligated to make a distribution from the Capital Account if the
amount available for such distribution is less than $1.00 per 100 Units. The
Trustee is authorized to reinvest any funds held in the Capital or Income
Accounts, pending distribution, in money market mutual funds or U.S. Treasury
obligations which mature on or before the next applicable distribution date. Any
obligations so acquired must be held until they mature and proceeds therefrom
may not be reinvested.
(c) If the Depositor fails to replace any failed Special Security (as
defined in Section 3.10), the Trustee shall distribute to all Unitholders the
moneys originally deposited with respect to such Special Security and sales
charge attributable to such Special Security not more than 30 days after the
expiration of the Purchase Period (as defined in Section 3.10). If any contract
for a New Security in replacement of a Special Security shall fail, the Trustee
shall distribute the moneys originally deposited with respect to such Special
Security and sales charge attributable to the Special Security to the
Unitholders not more than 30 days after the date on which the contract in
respect of such New Security failed. If at the end of the Purchase Period less
than all moneys attributable to a failed Special Security have been applied or
allocated by the Trustee pursuant to a contract to purchase New Securities, the
Trustee shall distribute the remaining moneys (i) to Unitholders not more than
30 days after the end of the Purchase Period to the extent the failed Special
Security has not been fully replaced by New Securities or (ii) to the Depositor
to the extent moneys remain after the purchase of the New Securities, if any,
and the distribution referred to in clause (i).
(d) Except as provided below, all distributions shall be made by first
class mail to each Unitholder of record at the close of business on the
preceding applicable Record Date at the address of such holder appearing on the
registration books of the Trustee PROVIDED, HOWEVER, that the Trustee shall if
so directed with respect to distributions from the Income and/or Capital Account
at the time of purchase of Units or thereafter in writing signed by the
Unitholder and timely received, make such distributions to the Program Agent. A
Unitholder's written notice must be received by the Program Agent at least ten
days prior to the Record Date for the next Income Distribution in order to be in
effect for such Income Distribution and by the last Record Date for distribution
of capital in any year in order to be effective for the following calendar year.
All such notices shall remain in effect until a subsequent notice is received by
the Program Agent. Upon receipt of any such distribution the Program Agent shall
purchase shares (or fractions thereof) in the applicable reinvestment fund as
directed by the Unitholder. The Program Agent shall not be liable to any
Unitholder for any action taken with respect to its duties and responsibilities
as Program Agent; PROVIDED, HOWEVER, that this provision shall not protect the
Program Agent against liability to which it would otherwise be subject by reason
of wilful 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.
(e) Except as provided by the preceding paragraph, Unitholders of record on
the registration books of the Trustee at the close of business on the Record
Date prior to each Distribution Date, shall be entitled to the distribution in
respect of such Distribution Date, and, except as provided in Article VIII, no
liability shall attach to the Trustee by reason of payment to or on the order of
any such Unitholder of record. Nothing herein shall be construed to prevent the
payment of distributions from the Income and Capital Accounts to any such
Unitholder by means of one check, draft or other proper instrument.
SECTION 3.05. STATEMENTS AND REPORTS. With each distribution from the
Income or Capital Accounts of each Trust Fund the Trustee shall set forth,
either in the instrument by means of which payment of such distribution is made
or in an accompanying statement, the amount being distributed from each such
account expressed as a dollar amount per Unit of such Trust Fund. If the
distribution is an In Kind Distribution, the Trustee shall provide a list of the
Securities being distributed, the aggregate number of shares of each Security
being distributed and any cash representing fractional shares being distributed.
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 any individual Trust Fund a statement for such
Trust Fund setting forth with respect to such calendar year:
(A) as to the Income Account:
(1) the amount of dividends received on the Securities;
(2) the amounts paid for purchases of New Securities pursuant to
Section 3.10 and for redemptions pursuant to Section 5.02;
(3) the deductions for applicable taxes and fees and expenses of
the Trust;
(4) the reservations made by the Trustee pursuant to Section
3.03, if any; and
(5) the balance remaining after such distributions, deductions
and reservations 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 dates of sale or liquidation of any of the Securities and
the net proceeds received therefrom (excluding any portion thereof
credited to the Income Account);
(2) the results of In Kind Distributions in connection with
redemptions of Units, if any;
(3) the amounts paid for purchases of New Securities pursuant to
Section 3.10 and for redemptions pursuant to Section 5.02;
(4) the deductions for payment of applicable taxes and fees and
expenses of the Trust;
(5) the reservations made by the Trustee pursuant to Section
3.03, if any; and
(6) the balance remaining after such distributions, deductions
and reservations, 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 as of the last business day of such
calendar year;
(2) the number of Units outstanding on the last business day of
such calendar year;
(3) the Unit Value based on the Trust Fund Evaluations made on
the last day of December (or the last business day prior thereto) of
such calendar year; and
(4) the amounts actually distributed to Unitholders 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 3.06. EXTRAORDINARY SALE OF SECURITIES. The Depositor by written
notice may direct the Trustee to sell Securities at such price and time and in
such manner as shall be deemed appropriate by the Depositor if the Depositor
shall have determined that any one or more of the following conditions exist:
(a) that there has been a default in the payment of principal of or
interest on any outstanding debt obligations of the issuer of such
Securities; or
(b) that the price of any such Security has declined to such an
extent, as a result of adverse issuer credit factors, so that in the
opinion of the Depositor the retention of such Securities would be
detrimental to the interest of the Unitholders.
Upon receipt of such direction from the Depositor, the Trustee shall
proceed to sell the specified Securities. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any sale
made pursuant to any such direction or by reason of the failure of the Depositor
to give any such direction, and in the absence of such direction the Trustee
shall have no duty to sell any Securities under this Section 3.06. The Depositor
shall not be liable for errors of judgment in directing or failing to direct the
Trustee pursuant to this Section 3.06. This provision, however, shall not
protect the Trustee or Depositor against any liability for which they would
otherwise be subject, respectively, by reason of wilful misfeasance, bad faith
or gross negligence in the performance of their duties or by reason of their
reckless disregard of their obligations and duties hereunder.
SECTION 3.07. COUNSEL. The Depositor may employ from time to time counsel
to act on behalf of any Trust Fund for any legal services in connection with the
Securities, and any legal matters relating to the possible disposition of any
Securities pursuant to any provisions hereof. The fees and expenses of such
counsel shall be paid by the Trustee as provided in Section 3.04(a)(3) hereof.
SECTION 3.08. ACTION BY TRUSTEE REGARDING SECURITIES. 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 the Trustee shall promptly
notify the Depositor and shall thereupon take such action or refrain from taking
any action as the Depositor shall in writing direct; PROVIDED, HOWEVER, that if
the Depositor shall not within five business days of the giving of such notice
to the Depositor direct the Trustee to take or refrain from taking any action,
the Trustee shall take such action as it, in its sole discretion, shall deem
advisable. In connection with any solicitation of proxies by management of any
of the Securities in the Trust Fund, if the Depositor fails to instruct the
Trustee how to vote such proxy, the Trustee shall vote with the recommendation
of such management. Except as provided in Article VII and Article VIII, 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 3.08.
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 refection or
without an initial offer, any securities, cash and/or property received shall be
promptly sold, if securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the Trustee to keep such
securities or property. The cash received in such exchange and cash proceeds of
any such sales shall be distributed to Unitholders on the next distribution date
in the manner set forth in Section 3.04(b) regarding distributions from the
Capital Account. Except as provided in Article VIII, the Trustee shall not be
liable or responsible in any way for depreciation or loss incurred by reason of
any such sale.
Neither the Depositor nor the Trustee shall be liable to any person for any
action or failure to take action pursuant to the terms of this Section 3.08.
Whenever new securities or property is received and retained by a Trust
Fund pursuant to this Section 3.08, the Trustee shall, within a reasonable
amount of time thereafter, mail to all Unitholders of such Trust Fund notices of
such acquisition unless legal counsel for such Trust Fund determines that such
notice is not required by The Investment Company Act of 1940, as amended.
SECTION 3.09. NOTICE OF CHANGE IN CAPITAL ACCOUNT. The Trustee shall give
prompt written notice to the Depositor and the Evaluator of all amounts credited
to or withdrawn from the Capital Account of any Trust Fund pursuant to any of
the provisions of this Article III and the balance in such Account after giving
effect to the credit or withdrawal.
SECTION 3.10. LIMITED REPLACEMENT OF SPECIAL SECURITIES. If any contract in
respect of Contract Securities other than a contract to purchase a New Security
(as defined below), including those purchased on a delayed delivery basis, shall
have failed due to any occurrence, act or event beyond the control of the
Depositor or the Trustee (such failed Contract Securities being herein called
the "SPECIAL SECURITIES"), the Depositor shall notify the Trustee (such notice
being herein called the "FAILED CONTRACT NOTICE") of its inability to deliver
the failed Special Security to the Trustee after it is notified that the Special
Security will not be delivered by the seller thereof to the Depositor. Prior to,
or simultaneously with, giving the Trustee the Failed Contract Notice, or within
a maximum of 20 days after giving such Failed Contract Notice (such 20 day
period being herein called the "PURCHASE PERIOD"), the Depositor shall, if
possible, purchase, or enter into a contract to purchase, an obligation to be
held as a Security hereunder (herein called the "NEW SECURITY") as part of the
Trust Fund in replacement of the failed Special Security, subject to the
satisfaction of all of the following conditions in the case of each purchase or
contract to purchase:
(a) The New Securities shall be equity securities and shall, in the
opinion of the Depositor, be of the same general quality as those
Securities originally deposited.
(b) The purchase price of the New Securities shall not exceed the
amount of funds reserved for the purchase of the Special Securities.
(c) The Depositor shall furnish a notice to the Trustee (which may be
part of the Failed Contract Notice) in respect of the New Security
purchased or to be purchased that shall (i) identify the New Securities,
(ii) state that the contract to purchase, if any, entered into by the
Depositor is satisfactory in form and substance and (iii) state that the
foregoing conditions of clauses (a) and (b) have been satisfied with
respect to the New Securities.
Upon satisfaction of the foregoing conditions with respect to any New
Security, the Trustee shall pay the purchase price for the New Security from the
amount of funds reserved for the purchase of the Special Securities or, if the
Trustee has credited any moneys and/or letters of credit attributable to the
failed Special Security to the Capital Account, the Trustee shall pay the
purchase price of the New Security upon directions from the Depositor from the
moneys and/or letters of credit so credited to the Capital Account. If the
Trustee has credited moneys of the Depositor to the Capital Account, the Trustee
shall forthwith return to the Depositor the portion of such moneys that is not
properly distributable to Unitholders pursuant to Section 3.04.
Whenever a New Security is acquired by the Depositor pursuant to the
provisions of this Section 3.10, the Trustee shall, within five days thereafter,
mail to all Unitholders notices of such acquisition, including an identification
of the failed Special Securities and the New Securities acquired. The purchase
price of the New Securities shall be paid out of the funds reserved for the
purchase of the failed Special Securities. Except as provided in Article VIII,
the Trustee shall not be liable or responsible in any way for depreciation or
loss incurred by reason of any purchase made pursuant to any such directions and
in the absence of such directions the Trustee shall have no duty to purchase any
New Securities under this Agreement. The Depositor shall not be liable for any
failure to instruct the Trustee to purchase any New Securities or for errors of
judgment in respect of this Section 3.10; PROVIDED, HOWEVER, that this provision
shall not protect the Depositor 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 3.11. COMPENSATION OF DEPOSITOR FOR SUPERVISORY SERVICES. As
compensation for providing supervisory portfolio services under this Agreement,
the Depositor shall receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee in the amount
specified as compensation for the Depositor in the Prospectus, but in no event
shall such compensation when combined with all compensation received from other
series of the Fund or other unit investment trusts sponsored by the Depositor or
its affiliates for providing such supervisory services in any calendar year
exceed the aggregate cost to the Depositor for providing such services. The rate
of such compensation may be increased by the Depositor from time to time,
without the consent or approval of any Unitholder or the Trustee, by amounts not
exceeding the proportionate increase, during the period from the date of such
Trust Agreement to the date of any such increase, in consumer prices as last
published prior to each such date under the classification "All Services Less
Rent of Shelter" in the Consumer Price Index For All Urban Consumers (CPI-U)
U.S. City Average, not seasonally adjusted, base 1982 - 84 = 100, published by
the United States Department of Labor. In the event that such classification
ceases to incorporate a significant number of items, or if a substantial change
is made in the method of establishing such classification, then the
classification shall be adjusted in a fair and reasonable manner to the figure
that would have resulted had no substantial change occurred in the manner of
computing such classification. In the event that such classification (or a
successor or substitute index) is not available, such governmental or other
service or publication as shall evaluate the information in substantially the
same manner as the aforesaid classification, shall be used in lieu thereof. Such
compensation shall be charged by the Trustee, upon receipt of invoice therefor
from the Depositor, against the Income and Capital Accounts on or before the
Distribution Date on which such period terminates. If the cash balance in the
Income and Capital Accounts shall be insufficient to provide for amounts payable
pursuant to this Section 3.11, the Trustee shall have the power to sell (i)
Securities from the current list of Securities designated to be sold pursuant to
Section 5.02 hereof, or (ii) if no such Securities have been so designated, such
Securities as the Trustee may see fit to sell in its own discretion, and to
apply the proceeds of any such sale in payment of the amounts payable pursuant
to this Section 3.11. Any moneys payable to the Depositor pursuant to this
Section 3.11 shall be secured by a prior lien on the Trust Fund except that such
lien shall be junior and subordinate to any lien in favor of the Trustee under
the provisions of Section 8.08 and of the Evaluator under the provisions of
Section 4.03.
SECTION 3.12. DEFERRED SALES CHARGE. If the Prospectus related to the Trust
specifies a deferred sales charge, the Trustee shall, on the dates specified in
and as permitted by such Prospectus, withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such amount to a special
non-Trust account designated by the Depositor out of which the deferred sales
charge will be distributed to the Depositor (the "DEFERRED SALES CHARGE
ACCOUNT"). If the balance in the Capital Account is insufficient to make such
withdrawal, the Trustee shall, as directed by the Depositor, advance funds in an
amount required to fund the proposed withdrawal and be entitled to reimbursement
of such advance upon the deposit of additional monies in the Capital Account,
and/or sell Securities and credit the proceeds thereof to the Deferred Sales
Charge Account, PROVIDED, HOWEVER, that the aggregate amount advanced by the
Trustee at any time for payment of the deferred sales charge shall not exceed
$15,000. Such direction shall, if the Trustee is directed to sell a Security,
identify the Security to be sold and include instructions as to the execution of
such sale. 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, withhold 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 the Deferred Sales Charge Account. If pursuant to
Section 5.02 hereof, the Depositor shall purchase a Unit tendered for redemption
prior to the payment in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unitholder the amount specified under
Section 5.02 less the unpaid portion of the deferred sales charge. All advances
made by the Trustee pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unitholders.
ARTICLE IV
EVALUATION OF SECURITIES; THE EVALUATOR
SECTION 4.01. EVALUATION OF SECURITIES. The Evaluator shall determine
separately and promptly furnish to the Trustee and the Depositor upon request
the value of each issue of Securities as of the Evaluation Time as provided in
the following manner:
The Evaluator will prepare each evaluation for which market quotations for
the Securities are available by the use of outside services normally used and
contracted with for this purpose. If the Securities are listed on a national
securities exchange or the NASDAQ National Market System, the evaluation will be
based on the closing sale price on the exchange or system or, if there is no
closing sale price on the exchange or system, at the closing bid price on the
exchange or system. If such market quotations are not available, the Depositor
shall determine the value of the Securities. Such evaluation shall generally be
based on the current bid prices on the over-the-counter market (unless it is
determined that these prices are inappropriate as a basis for evaluation). If
such prices are not available on the over-the-counter market, the evaluation
will generally be made by the Depositor in good faith (1) on the basis of the
current bid prices for comparable securities, (2) by the Depositor's appraising
the value of the Securities in good faith at the bid side of the market or (3)
by any combination thereof. For each evaluation, the Evaluator shall also
determine and furnish to the Trustee and the Depositor the aggregate of (a) the
value of all Securities on the basis of such evaluation and (b) on the basis of
the information furnished to the Evaluator by the Trustee pursuant to Section
3.02, the amount of cash then held in the Capital Account which was received by
the Trustee after the Record Date preceding such determination less any amounts
held in the Capital Account for distribution to Unitholders on a subsequent
Distribution Date when a Record Date occurs four business days or less after
such determination. For the purposes of the foregoing, the Evaluator may obtain
current prices for the Securities from investment dealers or brokers (including
the Depositor) that customarily deal in similar securities.
SECTION 4.02 CERTAIN INFORMATION TO BE MADE AVAILABLE. 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 evaluations
pursuant to Section 4.01 which concern the Trust Fund in which such Unitholder
holds Units.
SECTION 4.03. COMPENSATION OF THE EVALUATOR. As compensation for its
services hereunder, the Evaluator shall receive against a statement therefor
submitted to the Trustee on or before each Distribution Date the amount
specified as compensation for the Evaluator in the Prospectus, but in no event
shall such compensation, when combined with all compensation received from other
series of the Fund or other unit investment trusts sponsored by the Depositor or
its affiliates for providing such evaluation services in any calendar year,
exceed the aggregate cost to the Depositor for providing such services. The rate
of such compensation may be increased by the Evaluator from time to time,
without the consent or approval of any Unitholder or the Trustee, by amounts not
exceeding the proportionate increase, during the period from the date of such
Trust Agreement to the date of any such increase, in consumer prices as last
published prior to each such date under the classification "All Services Less
Rent of Shelter" in the Consumer Price Index For All Urban Consumers (CPI-U)
U.S. City Average, not seasonally adjusted, base 1982 - 84 = 100, published by
the United States Department of Labor. In the event that such classification
ceases to incorporate a significant number of items, or if a substantial change
is made in the method of establishing such classification, then the
classification shall be adjusted in a fair and reasonable manner to the figure
that would have resulted had no substantial change occurred in the manner of
computing such classification. In the event that such classification (or a
successor or substitute index) is not available, such governmental or other
service or publication as shall evaluate the information in substantially the
same manner as the aforesaid classification, shall be used in lieu thereof. Such
compensation shall be charged by the Trustee, upon receipt of invoice therefor
from the Evaluator, against the Income and Capital Accounts on or before the
Distribution Date. If the cash balances in the Income and Capital Accounts shall
be insufficient to provide for amounts payable pursuant to this Section 4.03,
the Trustee shall have the power to sell (i) Securities designated to be sold
pursuant to Section 5.02 hereof or (ii) if no such Securities have been so
designated, such Securities as the Trustee may see fit to sell in its own
discretion, and to apply the proceeds of any such sale in payment of the amounts
payable pursuant to this Section 4.03. Any moneys payable to the Evaluator
pursuant to this Section 4.03 shall be secured by a prior lien on the Trust Fund
except that such lien shall be junior and subordinate to any lien in favor of
the Trustee under the provisions of Section 8.08.
SECTION 4.04. LIABILITY OF THE EVALUATOR. The Trustee, the Depositor (if
separate from the Evaluator) and the Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. The Trustee, the Depositor (if separate from the Evaluator) and the
Unitholders may rely on any evaluation furnished by the Depositor and shall have
no responsibility for the accuracy thereof. The determinations made by the
Evaluator and the Depositor hereunder shall be made in good faith. The Evaluator
and the Depositor shall be under no liability to the Trustee, the Depositor or
the Unitholders except for any liability to which it would be subject by reason
of wilful 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 4.05. RESIGNATION, REMOVAL AND OTHER MATTERS RELATING TO THE
EVALUATOR. (a) The Evaluator may resign and be discharged hereunder, by
executing an instrument in writing resigning as the Evaluator and filing the
same with the Depositor (if separate from the Evaluator) and the Trustee not
less than 60 days before the date specified in such instrument when, subject to
Section 4.05(c), such resignation is to take effect. Upon receiving such notice
of resignation, the Depositor shall use its best efforts to appoint a successor
Evaluator having qualifications and at a rate of compensation satisfactory to
the Depositor. Such appointment shall be made by written instrument executed by
the Depositor and the Trustee in duplicate, one copy of which shall be delivered
to the resigning Evaluator and one copy to the successor evaluator. The
Depositor or the Trustee may remove the Evaluator at any time upon thirty days'
written notice and appoint a successor evaluator having qualifications and at a
rate of compensation satisfactory to the Depositor and the Trustee. Such
appointment shall be made by written instrument executed by the Depositor and
the Trustee in duplicate, one copy of which shall be delivered to the Evaluator
so removed and one copy to the successor evaluator. Notice of such resignation
or removal and appointment of a successor evaluator shall be mailed by the
Trustee to each Unitholder.
(b) If the Evaluator resigns and no successor evaluator shall have been
appointed and have accepted appointment within 30 days after receipt of the
notice of resignation 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, appoint a successor evaluator.
(c) 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
the Evaluator herein and shall be bound by all the terms and conditions of this
Agreement. Any resignation or removal of the Evaluator and appointment of a
successor evaluator pursuant to this Section 4.05 shall become effective upon
such acceptance of appointment.
(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 Agreement without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything herein, or in any agreement relating to such merger or consolidation,
by which the Evaluator may seek to retain certain powers, rights and privileges
theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
ARTICLE V
TRUST FUND EVALUATION; REDEMPTION OF UNITS
SECTION 5.01. TRUST FUND EVALUATION. As of the Evaluation Time next
following any tender by a Unitholder for redemption and on any other business
day desired by it or as may be required hereunder, the Trustee shall as to each
Trust Fund:
Add
(1) cash on hand in the Trust Fund (other than cash held
especially for the purchase of Contract Securities) and moneys in the
process of being collected from declared dividends,
(2) the aggregate value of each issue of the Securities in the
Trust Fund (including Contract Securities) as determined by the
Evaluator pursuant to Section 4.01,
(3) amounts representing organizational expenses paid from the
Trust less amounts representing accrued organizational expenses of the
Trust, and
(4) all other assets of the Trust;
Deduct
(1) amounts representing any applicable taxes, governmental
charges or other charges pursuant to Section 3.03 payable out of the
Trust Fund and for which no deductions shall have previously been made
for the purpose of addition to the Reserve Account,
(2) amounts representing estimated accrued fees and expenses of
the Trust Fund including but not limited to unpaid fees and expenses
of the Trustee (including legal and auditing expenses), the Evaluator,
the Depositor and counsel, and
(3) cash allocated for distribution to Unitholders of the Trust
Fund of record as of the business day prior to the evaluation then
being made.
The resulting figure is herein called a "TRUST FUND EVALUATION."
Until the Depositor has informed the Trustee that there will be no further
deposits of Additional Securities pursuant to section 2.01(b), the Depositor
shall provide the Trustee with written estimates of (i) the total organizational
expenses to be borne by the Trust pursuant to Section 10.02 and (ii) the total
number of Units to be issued in connection with the initial deposit and all
anticipated deposits of additional Securities. For purposes of calculating the
Trust Fund Evaluation and Unit Value, the Trustee shall treat all such
anticipated expenses as having been paid and all liabilities therefor as having
been incurred, and all Units as having been issued, in each case on the date of
the Trust Agreement, and, in connection with each such calculation, shall take
into account a pro rata portion of such expense and liability based on the
actual number of Units issued as of the date of such calculation. In the event
the Trustee is informed by the Depositor of a revision in its estimate of total
expenses or total Units and upon the conclusion of the deposit of additional
Securities, the Trustee shall base calculations made thereafter on such revised
estimates or actual expenses, respectively, but such adjustment shall not affect
calculations made prior thereto and no adjustment shall be made in respect
thereof.
SECTION 5.02. REDEMPTION OF UNITS; SALE OF SECURITIES. Section
5.02.Redemption of Units; Sale of Securities. Any Unitholder may cause any of
his Units to be redeemed by the Trustee, subject to the terms of this Section
5.02, by making a written request to the Trustee at its principal trust office,
and, in the case of Units evidenced by a Certificate, by tendering such
Certificate to the Trustee at such office, properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Trustee. Unitholders must sign such written request, and such Certificate or
transfer instrument, exactly as their name appears on the records of the Trustee
and on any Certificate representing the Units to be redeemed. Such signature
must be guaranteed by a participant in the Securities Transfer Agents Medallion
Program ("STAMP") or such other signature guarantee program in addition to, or
in substitution for, STAMP, as may be accepted by the Trustee. Such redemption
shall be made by the Trustee on the third business day following the day on
which request for redemption is received by the Trustee, (such date being herein
called the "REDEMPTION DATE"). Subject to payment by such Unitholder of any tax
or other governmental charges which may be imposed thereon and subject to
payments in the form of In Kind Distributions (as defined below), such
redemption is to be made by payment on the Redemption Date of cash equal to the
Unit Value (determined on the basis of the Trust Fund Evaluation made in
accordance with Section 5.01) multiplied by the number of Units being redeemed
(herein called the "REDEMPTION PRICE"). The portion of the Redemption Price
which represents dividends shall be withdrawn from the Income Account of the
affected Trust Fund to the extent available. The balance paid on any redemption
shall be withdrawn from the Capital Account of the affected Trust to the extent
that funds are available for such purpose. If such available balance shall be
insufficient, the Trustee shall sell from such Trust Fund such Securities from
among those designated for such purpose by the Depositor as the Trustee in its
discretion, shall deem advisable or necessary. In the event that funds are
withdrawn from the Capital Account or Securities are sold for payment of any
portion of the Redemption Price representing declared but unpaid dividends, the
Capital Account shall be reimbursed when sufficient funds are next available in
the Income Account for such funds so applied.
The Trustee may in its discretion, and shall when so directed by the
Depositor in writing, suspend the right of redemption or postpone the date of
payment of the Redemption Price for more than three business days following the
day on which tender for redemption is made (1) for any period during which the
New York Stock Exchange, Inc. is closed other than customary weekend and holiday
closings; (2) for any period during which (i) trading on the New York Stock
Exchange, Inc. is restricted or (ii) an emergency exists as a result of which
disposal by the Trust Fund of the Securities is not reasonably practicable or it
is not reasonably practicable fairly to determine in accordance herewith the
value of the Securities for the purposes of any Trust Fund Evaluation; or (3)
for such other period as the Securities and Exchange Commission may by order
permit.
No later than the close of business on the day of tender of any 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 Units 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 Units were
tendered for redemption. Such purchase shall be made by payment for such Units
by the Depositor to the Unitholder not later than the close of business on the
Redemption Date of any amount not less than the Redemption Price which would
otherwise be payable by the Trustee to such Unitholder.
Any Unit so purchased by the Depositor may at the option of the Depositor
be tendered to the Trustee for redemption in the manner provided in the first
paragraph of this Section 5.02.
Notwithstanding anything to the contrary in this Section 5.02, if offered
by the terms of the Prospectus, any Unitholder may, if such Unitholder tenders
at least that number of Units set forth in the Prospectus for redemption and
makes such tender on or prior to the date provided in the Prospectus, request at
the time of tender to receive from the Trustee in lieu of cash such Unitholder's
pro rata share of each Security then held by the Trust Fund. Such tendering
Unitholder will receive his pro rata number of whole shares of each of the
Securities comprising the portfolio of the Trust Fund and cash from the Capital
Account equal to the value of the fractional shares to which such tendering
Unitholder is entitled. Such pro rata share of each Security and the related
cash equal to the value of the fractional shares to which such tendering
Unitholder is entitled is referred to herein as an "IN KIND DISTRIBUTION". An In
Kind Distribution will 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 Depository Trust Company. If funds in the Capital Account are
insufficient to cover the required cash distribution to the tendering
Unitholder, the Trustee may sell Securities according to the criteria discussed
above.
The Depositor shall deliver a current list of Securities in each Trust Fund
to be sold for the purpose of redemption of Units tendered for redemption and
for payment of expenses hereunder. If at any such time the Depositor shall for
any reason fail to deliver such a list, the Trustee, in its sole discretion, may
designate a current list of Securities in each Trust Fund for such purposes. The
net proceeds of any sale of Securities shall be credited to the Capital Account
of such Trust Fund.
Except as provided in Article VII and Article VIII, neither the Depositor
nor the Trustee shall be liable or responsible in any way for depreciation or
loss incurred by reason of any sale or designation of Securities made pursuant
to this Section 5.02.
Any Certificates evidencing Units redeemed pursuant to this Section 5.02
shall be cancelled by the Trustee and the Unit or Units evidenced by such
Certificates shall be extinguished by such redemptions.
SECTION 5.01. ROLLOVER UNITS. (a) If the Depositor shall offer a subsequent
series of the Voyageur Equity Trust (the "NEW SERIES"), the Trustee shall, at
the Depositor's direction and at the Depositor's sole cost and expense, include
in the notice sent to Unitholders a form of election 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(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included in the redemption
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 on the Rollover Notification Date.
All Units so tendered by a Unitholder (a "ROLLOVER UNITHOLDER") shall be
redeemed and cancelled on the first day of the Special Redemption Period.
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 in kind
pursuant to Section 5.02 by distribution of cash and/or Securities to the
Distribution Agent based on the net asset value as of the first day of the
Special Redemption Period multiplied by the number of Units being redeemed
(herein called the "ROLLOVER DISTRIBUTION").
All Securities included in a Unitholder's Rollover Distribution shall be
sold by the Distribution Agent during the Special Redemption Period pursuant to
the Depositor's direction, and the Distribution Agent shall employ the Depositor
or one of its affiliates as broker in connection with such sales. All such sales
shall be effected through the Depository Trust Company. For such brokerage
services, the Depositor or such affiliate 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. The
Depositor or such affiliate shall direct that sales be made in accordance with
the guidelines set forth in the related Prospectus. 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 Depositor's public
offering price for such Units on such day, and at such reduced sales charge as
shall be described in the Prospectus for the Trust. 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 from the Depositor. In the
event a sale of Securities included in the Rollover Unitholder's redemption
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. 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.
Except as provided in Article VIII, 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 their discretion
at any time, decide not to offer Trust Series in the future, and if so, this
Section 5.03 concerning the Rollover of Units 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 VI
ISSUANCE, TRANSFER, INTERCHANGE AND REPLACEMENT OF CERTIFICATES
SECTION 6.01 ISSUANCE OF CERTIFICATES. Unless otherwise provided in the
Prospectus, Certificates representing Units held by a Unitholder will not be
issued except upon written request by a Unitholder, or his or her registered
broker/dealer, to the Trustee at its principal trust office that such Units be
held in certified form. Certificates that have been issued may be returned to
the Trustee at any time and cancelled, without affecting the Unitholder's
interest in the Trust Fund, when accompanied by proper written instructions from
the Unitholder.
SECTION 6.02.TRANSFER OF UNITS; INTERCHANGE OF CERTIFICATES. A Unitholder
may transfer any of his Units by making a written request to the Trustee at its
principal trust office and, in the case of Units evidenced by a Certificate, by
presenting and surrendering such Certificate at such office properly endorsed or
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Trustee. Unitholders must sign such written request, and
such Certificate of transfer instrument, exactly as their name appears on the
records of the Trustee and on any Certificate representing the Units to be
transferred. Such signature must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other signature
guarantee program in addition to, or in substitution for, STAMP, as may be
accepted by the Trustee. Such transfer shall thereupon be made on the records of
the Trustee and, if appropriate, a new registered Certificate or Certificates
for the same number of Units of the same Trust Fund shall be issued in exchange
and substitution therefor. Certificates issued pursuant to this Agreement are
interchangeable for one or more other Certificates of the same Trust Fund in an
equal aggregate number of Units and all Certificates issued shall be issued in
denominations of one Unit or any whole multiple thereof as may be requested by
the Unitholder. The Trustee may deem and treat the person in whose name any Unit
or Certificate shall be registered upon the books of the Trustee as the owner of
such Unit or Certificate for all purposes hereunder and the Trustee shall not be
affected by any notice to the contrary. The transfer books maintained by the
Trustee for each Trust Fund for the purpose of this Section 6.02 shall be closed
for an individual Trust Fund as such Trust Fund is terminated pursuant to
Article IX hereof.
A sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any such transfer or interchange shall be paid to the
Trustee. A Unitholder may be required to pay $2 (or such other amount as may be
specified by the Trustee and approved by the Depositor) for each new Certificate
issued on any such transfer or interchange.
All Certificates cancelled pursuant to this Agreement, other than those
endorsed for transfer, may be cremated or otherwise destroyed by the Trustee.
SECTION 6.03. REPLACEMENT OF CERTIFICATES. In case any Certificate shall
become mutilated or be destroyed, stolen or lost, the Trustee shall execute and
deliver a new Certificate in exchange and substitution therefor upon the
Unitholder'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,
PROVIDED, HOWEVER, that if the particular Trust Fund has terminated or is in the
process of termination, the Trustee, in lieu of issuing such new Certificate,
may, upon the terms and conditions set forth herein, make the distributions set
forth in Section 9.01 hereof. Any mutilated Certificate shall be duly
surrendered and cancelled before any duplicate Certificate shall be issued in
exchange and substitution therefor. Any duplicate Certificate issued pursuant to
this Section 6.03 shall constitute complete and indefeasible evidence of
ownership in the Trust Fund, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time. Upon issuance of any
duplicate Certificate pursuant to this Section 6.03, the Certificate claimed to
have been lost, stolen or destroyed shall become null and void and of no effect,
and any bona fide purchaser thereof shall have only such rights as are afforded
under Article 8 of the Uniform Commercial Code to a holder presenting a
Certificate for transfer in the case of an overissue.
SECTION 6.04. FORM OF CERTIFICATE. Each Certificate shall be in fully
registered form, shall be numbered serially for identification, shall be
executed in facsimile by the original Depositor of the Trust Fund in question
and manually by an authorized signatory of the Trustee, shall be dated the date
of execution and delivery by the Trustee and shall represent a fractional
undivided interest in the specified Trust Fund, the numerator of which fraction
shall be the number of Units set forth on the face of such Certificate and the
denominator of which shall be the total number of Units of undivided interest of
such Trust Fund outstanding at any such time.
ARTICLE VII
DEPOSITOR
SECTION 7.01. CERTAIN MATTERS REGARDING SUCCESSION. 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 Agreement. Any
Depositor may transfer all or substantially all of its assets to a corporation
or partnership which carries on the business of such Depositor, if at the time
of such transfer such successor duly assumes all the obligations of such
Depositor under this Agreement.
SECTION 7.02. LIABILITY OF DEPOSITOR AND INDEMNIFICATION. (a) The Depositor
shall not be under any liability to any Trust Fund or the Unitholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment or for depreciation or
loss incurred by reason of the purchase or sale of any Securities, PROVIDED,
HOWEVER, that this provision shall not protect the Depositor against any
liability to which it would otherwise be subject by reason of wilful
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, evaluation, opinion, endorsement, assignment, draft or any other
document of any kind prima facie properly executed and submitted to it by the
Trustee, the Trustee's counsel, the Evaluator or any other person for any
matters arising hereunder. The Depositor shall in no event be deemed to have
assumed or incurred any liability, duty or obligation to any Unitholder, the
Evaluator or the Trustee other than as expressly provided for herein.
(b) Each Trust Fund shall pay and hold the Depositor harmless from and
against any loss, liability or expense incurred in acting as Depositor of such
Trust Fund other than by reason of wilful 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 Agreement 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 Fund
concerned and shall be paid directly by the Trustee out of the Income and
Capital Accounts of such Trust Fund.
(c) None of the provisions of this Agreement shall be deemed to protect or
purport to protect the Depositor against any liability to the Trust Fund or to
the Unitholders to which the Depositor would otherwise be subject by reason of
wilful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of the Depositor's reckless disregard of its obligations
and duties under this Agreement.
ARTICLE VIII
TRUSTEE
SECTION 8.01. GENERAL MATTERS RELATING TO THE TRUSTEE. (a) All moneys
deposited with or received by the Trustee hereunder shall be held by it without
interest in trust as part of the appropriate Trust Fund or Reserve Account until
required to be disbursed in accordance with the provisions of this Agreement and
such moneys will be segregated in such 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 evaluation, paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, endorsement, assignment, resolution,
draft or other document whether or not of the same kind, prima facie properly
executed, or the disposition of moneys or Securities pursuant to this Agreement;
PROVIDED, HOWEVER, that this provision shall not protect the Trustee against any
liability to which it would otherwise be subject by reason of wilful
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, and
the Trustee may construe any of the provisions of this Agreement 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.
(c) The Trustee shall not be responsible for or in respect of the recitals
herein, the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor, or for the form, character, genuineness, sufficiency,
value or validity of any Securities or for or in respect of the validity or
sufficiency of any Certificates (except for the due execution thereof by the
Trustee) or for 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 to the Depositor or Evaluator, other than as expressly provided for herein.
The Trustee shall not be responsible for or in respect of the validity of any
signature by or on behalf of the Depositor.
(d) The Trustee shall not be under any obligation to appear in, prosecute
or defend any action which in its opinion may involve it in expense or liability
unless it shall be furnished with such reasonable security and indemnity against
such expense or liability as it may be required, and any pecuniary cost of the
Trustee from such actions shall be deductible ratably from and a ratable charge
against the Trust Funds concerned. The Trustee shall in its discretion undertake
such action as it may deem necessary at any and all times to protect the Trust
Funds and the rights and interests of the Unitholders pursuant to the terms of
this Agreement, PROVIDED, HOWEVER, that the expenses and costs of such actions,
undertakings or proceedings shall be reimbursable to the Trustee ratably from
the Trust Funds concerned.
(e) The Trustee may employ agents, attorneys, accountants and auditors,
including an agent or agents for the purpose of custody and safeguarding
Securities, 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 not be liable in respect of any action taken or suffered under
this Agreement in good faith, in accordance with an opinion of counsel. The fees
and expenses charged by such agents, attorneys, accountants or auditors, except
for the fees and expenses charged by any agent or agents for custody and
safeguarding of Securities, shall constitute an expense of the Trustee
reimbursable from the Income and Capital Accounts as set forth in Section 3.04
hereof.
(f) If at any time the Depositor shall fail to undertake or perform any of
the duties which by the terms of this Agreement are affirmatively required by it
to be undertaken or performed, or the Depositor shall be incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Depositor or of
its property shall be appointed, or any public officer shall take charge or
control of the Depositor or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then in any such case, the Trustee
may do any one or more of the following: (1) appoint a successor Depositor who
shall act hereunder in all respects in place of such Depositor and which may be
compensated, at rates deemed by the Trustee to be reasonable under the
circumstances, by deduction ratably from the Income Account or, to the extent
funds are not available in such Account, from the Capital Account of the Trust
Funds 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; (2) continue to act as
Trustee hereunder without terminating this Agreement; or (3) terminate this
Agreement and the trust created hereby and liquidate the Trust Funds in the
manner provided in Section 9.01.
(g) If the value of any Trust Fund as shown by any Trust Fund Evaluation
shall be less than the liquidation amount specified in the Prospectus, the
Trustee may in its discretion, and shall if so directed by the Depositor,
terminate this Agreement and the trust created hereby, only insofar as it
relates to such Trust Fund, and liquidate such Trust Fund all in the manner
provided in Section 9.01 or if by reason of the aggregate redemption of Units
not theretofore sold by the Depositor and/or one or more of the underwriters
such that the net worth of such Trust Fund is reduced to less than 40% of the
aggregate original value of the Securities initially deposited therein, the
Trustee shall terminate this Agreement and the trust created hereby, only
insofar as it relates to such Trust Fund, and liquidate such Trust Fund, all in
the manner provided in Section 9.01.
(h) In no event shall the Trustee be personally liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or upon
any dividends or interest thereon. The Trustee shall be reimbursed and
indemnified out of the Income and Capital Accounts of the appropriate Trust Fund
for all such taxes and charges, for any tax or charge imposed against the
Trustee as Trustee of such Trust Fund and for any expenses, including counsel
fees, which the Trustee may sustain or incur with respect to such taxes or
charges.
(i) Notwithstanding any provisions of this Agreement to the contrary, no
payment to a Depositor or to any principal underwriter (as defined in the
Investment Company Act of 1940) for the Trust Fund or to any affiliated person
(as so defined) or agent of a Depositor or such underwriter shall be allowed the
Trustee 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.
SECTION 8.02 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 corporate trust office including a record of the name and
address of, and the Certificates 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
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. The Trustee, however, in connection with any such audits shall not
be obligated to use Trust assets to pay for such audits in excess of the amounts
indicated in the Prospectus relating to such Trust.
To the extent permitted under the Investment Company Act of 1940 as
evidenced by an opinion of independent counsel to the Depositor, the Trustee
shall pay, or reimburse to the Depositor or others, the costs of the preparation
of documents and information with respect to a Trust required by law or
regulation in connection with the maintenance of a secondary market in Units of
such Trust. Such costs may include, but are not limited to, accounting and legal
fees, blue sky registration and filing fees, printing expenses and other
reasonable expenses related to documents required under federal and state
securities laws. Such costs shall be a Trust expense and the Trustee shall not
be obligated to advance any of its own funds to make such payments.
SECTION 8.03 REPORTS TO SECURITIES AND EXCHANGE COMMISSION AND OTHERS. The
Trustee shall make such annual or other reports as may from time to time be
required under any applicable state or federal statute or rule or regulation
thereunder.
SECTION 8.04. AGREEMENT AND LIST OF SECURITIES ON FILE. The Trustee shall
keep a certified copy or duplicate original of this Agreement on file at its
principal trust office available for inspection by any Unitholder at all
reasonable times during its usual business hours, and the Trustee shall keep and
so make available for inspection a current list of the Securities in each Trust
Fund.
SECTION 8.05. COMPENSATION OF TRUSTEE. The Trustee shall receive at the
times and in the manner set forth in Section 3.04 as compensation for performing
the usual, ordinary, normal and recurring services under this Agreement during
the preceding month an amount equal to the amount specified as compensation for
the Trustee in the Prospectus. The Trustee may periodically adjust the
compensation provided for pursuant to this paragraph (i) in response to
fluctuations in short-term interest rates and (ii) from time to time, without
the consent or approval of any Unitholder or the Depositor, by amounts not
exceeding the proportionate increase, during the period from the date of such
Trust Agreement to the date of any such increase, in consumer prices as last
published prior to each such date under the classification "All Services Less
Rent of Shelter" in the Consumer Price Index For All Urban Consumers (CPI-U)
U.S. City Average, not seasonally adjusted, base 1982 - 84 = 100, published by
the United States Department of Labor. In the event that such classification
ceases to incorporate a significant number of items, or if a substantial change
is made in the method of establishing such classification, then the
classification shall be adjusted in a fair and reasonable manner to the figure
that would have resulted had no substantial change occurred in the manner of
computing such classification. In the event that such classification (or a
successor or substitute index) is not available, such governmental or other
service or publication as shall evaluate the information in substantially the
same manner as the aforesaid classification, shall be used in lieu thereof. The
Trustee shall also receive, at the times and in the manner set forth in Section
3.04, reimbursement for any and all expenses and disbursements incurred
hereunder (except as set forth in Section 8.01(e)), including legal and auditing
expenses and additional compensation for any extraordinary services performed
hereunder, which extraordinary services shall include, but not be limited to,
all costs and expenses incurred by the Trustee in making any annual or other
reports pursuant to Section 8.03, or in making any distribution of cash
attributable to failed contracts covering Contract Securities in accordance with
Section 3.04; PROVIDED, HOWEVER, that the amount of any such charge which has
not been finally determined as of any Distribution Date may be estimated and any
necessary adjustments shall be made in any succeeding period.
The Trustee shall be indemnified ratably from the Trust Funds and held
harmless against any loss, liability or expense incurred without gross
negligence, bad faith, wilful misconduct or reckless disregard of its duties on
the part of the Trustee arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in the premises.
The Trustee's normal and extraordinary compensation and reimbursement of
the above-mentioned expenses and losses shall be charged by the Trustee against
the Income and Capital Accounts of the appropriate Trust Funds in accordance
with Section 3.04 on or before each Distribution Date. If the balances in the
Income and Capital Accounts shall be insufficient to provide for amounts payable
pursuant to this Section 8.05, the Trustee shall have the power to sell
Securities in the manner provided in Section 5.02 hereof. 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 8.05.
SECTION 8.06.RESIGNATION, DISCHARGE OR REMOVAL OF THE TRUSTEE; SUCCESSORS.
(a) The Trustee may resign and be discharged of the trust created by this
Agreement by executing an instrument in writing resigning as Trustee of such
trust, filing the 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 8.06(c), such
resignation is to take effect. Upon receiving such notice of resignation, the
Depositor shall use its best efforts promptly to appoint a successor trustee in
the manner and meeting the qualifications hereinafter provided, by written
instrument or instruments delivered to the resigning Trustee and the successor
trustee. Notice of such appointment of a successor trustee shall be mailed
promptly after acceptance of such appointment by the successor trustee to each
Unitholder then of record. The Depositor may remove the Trustee at any time with
or without cause upon 90 day written notice to the Trustee and appoint a
successor trustee by written instrument or instruments delivered to the Trustee
so removed and the successor trustee, PROVIDED that a notice of such removal and
appointment of a successor trustee shall be mailed by the successor trustee
promptly after acceptance of such appointment to each Unitholder then of record.
The Trustee, however, may not be removed without cause during the first two
months of any calendar year.
(b) In case at any time the Trustee shall resign and no successor trustee
shall have been appointed 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.
(c) Any successor trustee appointed hereunder shall execute and acknowledge
to the Depositor and the retiring Trustee an instrument accepting such
appointment hereunder, and such successor trustee without any further act, deed
or conveyance shall become vested with all rights, powers, duties and
obligations of its predecessor hereunder with like effect as if originally named
a Trustee herein and shall be bound by all the terms and conditions of this
Agreement. Upon the request of such successor trustee, the retiring Trustee
shall, upon payment of all amounts due the 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, if any, 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 Agreement. Any resignation or removal of
a Trustee and appointment of a successor trustee pursuant to this Section 8.06
shall become effective upon such acceptance of appointment by the successor
trustee.
(d) Any corporation into which a Trustee hereunder may be merged or with
which it may be consolidated, or any corporation resulting from any merger or
consolidation to which such Trustee hereunder shall be a party, shall be the
successor trustee under this Agreement without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything herein, or in any agreement relating to such merger or consolidation,
by which any such Trustee may seek to retain certain powers, rights and
privileges theretofore obtaining for any period of time following such merger or
consolidation, to the contrary notwithstanding.
SECTION 8.07. QUALIFICATION OF TRUSTEE. The Trustee and any successor
trustee shall be a corporation organized under laws of the United States, or any
state thereof, which is authorized under such laws to exercise trust powers and
has at all times an aggregate capital, surplus and undivided profits of not less
than $5,000,000.
SECTION 8.08. COLLATERAL. As collateral security for the prompt payment to
the Trustee of all reimbursement to which the Trustee is entitled hereunder and
of all sums at any time owed to or payable to the Trustee hereunder (including,
without limitation, the prompt reimbursement of the Trustee for any sums that it
may from time to time in its discretion advance to the account of the Trust
Fund), the Trustee is hereby granted a first and prior lien and security
interest in and to the Trust Fund and all Securities now or hereafter included
therein, including (without limitation) those Securities listed in the Trust
Agreement, together with all Securities, obligations, Contract Securities and
instruments received in exchange or substitution therefor and all proceeds
thereof and all additions and substitutions.
ARTICLE IX
TERMINATION
SECTION 9.01 PROCEDURE UPON TERMINATION. This Agreement and the trust
created hereby shall terminate as to an individual Trust Fund upon the maturity,
redemption, sale or other disposition, as the case may be, of the last Security
held hereunder in such Trust Fund, unless sooner terminated as hereinbefore
specified, and may be terminated at any time by written instrument executed by
the Depositor and consented to by holders of Units representing 66-2/3% of the
Units of such Trust Fund then outstanding under this Agreement; PROVIDED, that
in no event shall any individual Trust Fund continue beyond the Mandatory
Termination Date for such Trust Fund.
Written notice of any termination, specifying the time or times at which
any Unitholder holding Certificates may surrender such Certificates for
cancellation and the date, determined by the Trustee, upon which the transfer
books of the Trustee, maintained pursuant to Section 8.02, shall be closed with
respect to the terminated Trust Fund or the entire Fund, as the case may be,
shall be given by the Trustee to Unitholders of such terminated Trust Fund or
all Unitholders, as the case may be.
Within a reasonable period of time after the termination of a Trust Fund or
the entire Fund, the Trustee shall sell all of the Securities then held, if any,
and shall:
(a) deduct from the Income Account or to the extent that funds are not
available in such Account, from the Capital Account of every Trust Fund
separately and pay to itself individually an amount equal to the sum of (1)
its accrued compensation for its ordinary services in connection with such
Trust Fund, (2) any compensation due it for its extraordinary services in
connection with such Trust Fund and (3) any other expenses and
disbursements in connection with such Trust Fund as provided herein;
(b) deduct from the Income Account or to the extent that funds are not
available in such account, from the Capital Account of every Trust Fund
separately and pay accrued and unpaid fees in connection with such Trust
Fund of the Evaluator, the Depositor and counsel, if any;
(c) deduct from the Income Account, or to the extent that funds are
not available from such Account, from the Capital Account of every Trust
Fund separately any amounts which it in its sole discretion shall deem
requisite to be deposited in the Reserve Account to provide for any
applicable taxes or other governmental charges that may be payable out of
such Trust Fund;
(d) distribute to each Unitholder (upon surrender for cancellation of
his Certificate or Certificates, if issued) such Unitholder's interest in
the balances of the Income and, on the conditions set forth in Section 3.03
hereof, the Reserve Accounts of the Trust Fund in which he holds Units,
PROVIDED that such distribution shall be made to Unitholders of record as
of the date of such computation and shall be distributed to them within
five days or shortly thereafter;
(e) either distribute in cash to each Unitholder (upon surrender for
cancellation of his Certificate or Certificates, if issued) such
Unitholder's pro rata share of the balance of the Capital Account, or, in
the alternative, if offered by the terms of the Prospectus, distribute to
each Unitholder who then owns at least that number of Units set forth in
the Prospectus and who has requested an In Kind Distribution under the
conditions set forth in Section 5.02, such holder's In Kind Distribution as
set forth in Section 5.02; and
(f) together with such distribution to each Unitholder as provided for
in paragraph (d) and (e), furnish to each such Unitholder a final statement
as of the date of the computation of the amount distributable to
Unitholders of the same Trust Fund, setting forth the data and information
in substantially the form and manner provided for in Section 3.05 hereof.
Any Unitholder who receives an In Kind Distribution, if offered by the
terms of the Prospectus, shall receive such Distribution in the same manner as
is provided in connection with redemptions in Section 5.02.
SECTION 9.02 NOTICE TO UNITHOLDERS. 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 applicable,
above-mentioned notice, the Trustee shall give a second written notice to the
remaining Unitholders to surrender their Certificates for cancellation and
receive the liquidating distribution with respect thereto. If within one year
after the second notice all the Certificates issued shall not have been
surrendered for cancellation, the Trustee may take appropriate steps or may
appoint an agent to take appropriate steps, to contact the remaining Unitholders
concerning surrender of their Certificates and the cost thereof shall be paid
out of the moneys and other assets which remain in the affected Trust Fund.
SECTION 9.03. MONEYS TO BE HELD IN TRUST WITHOUT INTEREST. The Trustee
shall be under no liability with respect to moneys in the Income, Capital and
Reserve Accounts upon termination, except to hold the same in trust without
interest.
SECTION 9.04. DISSOLUTION OF DEPOSITOR NOT TO TERMINATE. The dissolution of
the Depositor shall not, subject to Section 8.01(f), operate to terminate this
Agreement or the Fund or any individual Trust Fund.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. AMENDMENT AND WAIVER. This Agreement may be amended from
time to time by the Depositor and the Trustee without the consent of any of the
Unitholders (a) to cure any ambiguity or to correct or supplement any provisions
contained herein which may be defective or inconsistent with any other provision
contained herein; (b) to change any provision hereof as may be required by the
Securities and Exchange Commission or any successor governmental agency
exercising similar authority; or (c) to make such other provisions in regard to
matters or questions arising hereunder as shall not adversely affect the
interest of the Unitholders (as determined in good faith by the Depositor and
the Trustee). This Agreement may also be amended from time to time by the
Depositor and the Trustee (or the performance of any of the provisions of this
Agreement may be waived) with the consent of holders of Units representing
66-2/3% of the Units at the time outstanding under the Trust Agreement of the
individual Trust Fund or Trust Funds affected for the purpose of adding any
provisions of this Agreement or of modifying in any manner the rights of the
holders of Units of such Trust Fund or Trust Funds; PROVIDED, HOWEVER, that in
no event may any amendment be made which would (a) alter the rights to the
Unitholders as against each other, (b) provide the Trustee with the power to
engage in business or investment activities other than as specifically provided
in this Agreement or (c) adversely affect the characterization of the Trust as a
grantor trust for federal income tax purposes; PROVIDED, FURTHER, that the
consent of 100% of the Unitholders of any individual Trust Fund is required to
amend this Agreement (a) to increase the number of Units of such Trust Fund
issuable hereunder above the number of Units specified in the Prospectus or such
lesser amount as may be outstanding at any time during the term of this
Agreement, (b) to permit, in addition to acquisitions permitted under Section
3.10 hereof, the acquisition hereunder of any Securities for such Trust Fund
different from those specified in Schedule A to the Trust Agreement, (c) to
reduce the aforesaid percentage of Units the holders of which are required to
consent to certain amendments and (d) to reduce the interest in such Trust Fund
represented by any Units of such Trust Fund.
Promptly after the execution of any amendment the Trustee shall furnish
written notification of the substance of such amendment to each Unitholder then
of record affected thereby.
It shall not be necessary for the consent of Unitholders under this Section
10.01 or under Section 9.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Unitholders shall be subject to such
reasonable regulations as the Trustee may prescribe.
SECTION 10.02. INITIAL COSTS. Unless otherwise provided in the Trust's
prospectus, the expenses incurred in establishing the Trust, including the cost
of the preparation and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture and other documents relating
to the 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 the 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 preliminary prospectuses and
prospectuses, expenses incurred in the preparation and printing of brochures and
other advertising materials and any other selling expenses, to the extent not
borne by the Depositor, shall be borne by the Trust. To the extent the funds in
the Income and Capital Accounts of the Trust shall be insufficient to pay the
expenses borne by the Trust specified in this Section 10.02, the Trustee shall
advance out of its own funds and cause to be deposited and credited to the
Income Account such amount as may be required to permit payment of such
expenses. The Trustee shall be reimbursed for such advance on each Record Date
from funds on hand in the Income Account or, to the extent funds are not
available in such Account, from the Capital Account, in the amount deemed to
have accrued as of such Record Date as provided in the following sentence (less
prior payments on account of such advances, if any), and the provisions of
Section 8.05 with respect to the reimbursement of disbursements for Trust
expenses, including, without limitation, the lien in favor of the Trustee
therefor and the authority to sell Securities as needed to fund such
reimbursement, shall apply to the payment of expenses and the amounts advanced
pursuant to this Section. For the purposes of the preceding sentence and the
addition provided in clause (3) of the first sentence of Section 5.01, the
expenses borne by the Trust pursuant to this Section shall be deemed to have
been paid on the date of the Trust Agreement and to accrue at a daily rate over
the time period specified for their amortization provided in the Prospectus;
provided, however, that nothing herein shall be deemed to prevent, and the
Trustee shall be entitled to, full reimbursement for any advances made pursuant
to this Section no later than the termination of the Trust. For purposes of
calculating the accrual of organizational expenses under this Section 10.02, the
Trustee shall rely on the written estimates of such expenses provided by the
Depositor pursuant to Section 5.01."
SECTION 10.03. REGISTRATION (INITIAL AND CURRENT) OF UNITS AND FUND. The
Depositor agrees and undertakes on its own part to register the Units, each
Trust Fund and the Fund with the Securities and Exchange Commission and under
the Blue Sky laws of such states as the Depositor may select.
SECTION 10.04 CERTAIN MATTERS RELATING TO UNITHOLDERS. (a) The death or
incapacity of any Unitholder shall not operate to terminate this Agreement, the
Fund or the Trust Fund in which he holds Units nor entitle his legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Fund or such Trust
Fund, 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 Agreement, in respect of the Securities or moneys
from time to time received, held and applied by the Trustee hereunder.
(b) No Unitholder shall have any right to vote except as provided in
Sections 9.01 and 10.01 or in any manner otherwise to control the operation of
the Fund or the obligations of the parties hereto, nor shall anything set forth
in this Agreement or the Trust Agreement or contained in the terms of any
Certificates which may have been issued be construed so as to constitute the
Unitholders from time to time as partners 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 Agreement, or for any other cause
whatsoever.
(c) By the purchase and acceptance or other lawful delivery and acceptance
of any Unit, whether certificated or not, the Unitholder shall be deemed to be a
beneficiary of the Trust created by this Agreement and the Trust Agreement and
vested with all right, title and interest in the Trust Fund therein created to
the extent of the Unit or Units set forth whether evidenced by such Certificate
or held in uncertificated form, subject to the terms and conditions of this
Agreement and the Trust Agreement.
(d) A Unitholder may at any time tender his Units or his Certificate(s) if
held in certificated form (including any temporary Certificate or other evidence
of ownership of Units of the Trust Fund, issued by the Trustee or the Depositor)
to the Trustee for redemption, subject to and in accordance with Section 5.02.
SECTION 10.05 MISSOURI LAW TO GOVERN. This Agreement is executed and
delivered in the State of Missouri, and all laws or rules of construction of
such State, except for provisions with respect to choice of law, shall govern
the rights of the parties hereto and the Unitholders and the interpretation of
the provisions hereof.
SECTION 10.06 NOTICES. Any notice, demand, direction or instruction to be
given to the Depositor hereunder shall be in writing and shall be duly given if
mailed, first class with proper postage prepaid, or delivered to the Depositor
at 90 South Seventh Street, Suite 4400, Minneapolis, Minnesota 55402, or at such
other address as shall be specified in the Prospectus or by the Depositor to the
other parties hereto in writing. Any notice, demand, direction or instruction to
be given to the Trustee shall be in writing and shall be duly given if mailed,
first class with proper postage prepaid, or delivered to the Trustee at 127 West
10th Street, Kansas City, Missouri 64105, or such other address as shall be
specified to the other parties hereto in writing. Any notice to be given to a
Unitholder shall be duly given if mailed, first class with proper postage
prepaid, or delivered to each Unitholder at the address of such holder appearing
on the registration books of the Trustee.
SECTION 10.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms shall be for any reason whatsoever held invalid,
then such covenants, agreements, provisions or terms shall be deemed severable
from the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement or of any Certificates or the rights of the holders
thereof.
SECTION 10.08. SEPARATE AND DISTINCT SERIES. Each series of Voyageur Equity
Trust to which these Standard Terms and Conditions of Trust shall be applicable
shall, for all financial and administrative purposes, be considered separate and
distinct from every other series, and neither the assets of nor the expenses of
any one series shall be applied or charged against any other series.
IN WITNESS WHEREOF, the parties hereto have caused these Standard Terms and
Conditions of Trust, Dated January 3, 1996 to be duly executed.
VOYAGEUR FUND MANAGERS, INC.,
Depositor
By /s/Thomas J. Abood
-----------------------------------
General Counsel
INVESTORS FIDUCIARY TRUST COMPANY,
Trustee
By
---------------------------------
Operations Officer
Exhibit 1.2
VOYAGEUR UNIT INVESTMENT TRUST
SERIES 4
TRUST AGREEMENT
Dated: January 3, 1996
This Trust Agreement dated as of January 3, 1996 between Voyageur Fund
Managers, Inc., as Depositor, and Investors Fiduciary Trust Company, as Trustee,
sets forth certain provisions in full and incorporates other provisions by
reference to the document entitled "Voyageur Equity Trust Series 1 and certain
subsequent Series, Standard Terms and Conditions of Trust Dated January 3, 1996"
(herein called the "STANDARD TERMS AND CONDITIONS OF TRUST"), and such
provisions as are set forth in full and such provisions as are incorporated by
reference constitute a single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Securities listed in Schedule A hereto have been
deposited in Trust under this Trust Agreement.
IN WITNESS WHEREOF, Voyageur Fund Managers, Inc. has caused this Trust
Agreement to be executed by its Chairman, President, General Counsel, Chief
Financial Officer or one of its Vice Presidents and Investors Fiduciary Trust
Company has caused this Trust Agreement to be executed by one of its Trust
Officers all as of the day, month and year first above written.
Voyageur Fund Managers, Inc., Depositor
By: /S/ THOMAS J. ABOOD
--------------------------------
General Counsel and
Senior Vice President
INVESTORS FIDUCIARY TRUST COMPANY,
Trustee
By: /S/ RON PUETT
--------------------------------
Operations Officer
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
(Note: Incorporated herein and made a part hereof are the "SCHEDULE OF
INVESTMENTS" as set forth in the Prospectus.)
Exhibit 2
January 3, 1996
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
Re: VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
Ladies/Gentlemen:
We have served as special counsel for Voyageur Fund Managers, Inc., as
Sponsor and Depositor (the "DEPOSITOR") of Voyageur Unit Investment Trust,
Series 4 (the "FUND"), in connection with the preparation, execution and
delivery of a Trust Agreement dated January 3, 1996 and a Standard Terms and
Condition of Trust dated January 3, 1996 (collectively, the Indenture) each of
which are between Voyageur Fund Managers, Inc., as Depositor, and Investors
Fiduciary Trust Company, as Trustee, pursuant to which the Depositor has
delivered to and deposited the securities listed in Schedule A to the Trust
Agreement with the Trustee and pursuant to which the Trustee has issued in the
name of the Depositor documents representing units of fractional undivided
interest in and ownership of the Fund created under said Trust Agreement.
In connection therewith we have examined such pertinent records and
documents and matters of law as we have deemed necessary in order to enable us
to express the opinions hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. The execution and delivery of the Indenture and the execution and
issuance of certificates evidencing the units of the Fund have been duly
authorized; and
2. The certificates evidencing the units of the Fund when duly
executed and delivered by the Depositor and the Trustee in accordance with
the aforementioned Indenture, will constitute valid and binding obligations
of the Fund and the Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62179) relating to the units referred to
above and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
January 3, 1996
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
Re: VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4
Ladies/Gentlemen:
We have acted as special counsel for Voyageur Fund Managers, Inc.,
Depositor of Voyageur Unit Investment Trust, Series 4 (the "FUND"), in
connection with the issuance of units of fractional undivided interest in the
Fund, under a Trust Agreement dated January 3, 1996 and a Standard Terms and
Conditions of Trust dated January 3, 1996 (collectively, the "INDENTURE") each
of which are between Voyageur Fund Managers, Inc., as Depositor, and Investors
Fiduciary Trust Company, as Trustee.
In this connection, we have examined the Registration Statement, the form
of Prospectus proposed to be filed with the Securities and Exchange Commission,
the Indenture and such other instruments and documents as we have deemed
pertinent.
Based upon the foregoing and upon an investigation of such matters of law
as we consider to be applicable, we are of the opinion that, under existing
federal income tax law:
i. The Trust is not an association taxable as a corporation for
Federal income tax purposes; each Unit holder will be treated as the owner
of a pro rata portion of each of the assets of the Trust under the Internal
Revenue Code of 1986 (the "CODE"); the income of such Trust will be treated
as income of the Unit holders thereof under the Code; and an item of Trust
income will have the same character in the hands of a Unit holder as it
would have in the hands of the Trustee. Each Unit holder will be considered
to have received his pro rata share of income derived from each Trust asset
when such income is received by the Trust.
ii. Each Unit holder will have a taxable event when the Trust disposes
of an Equity Security (whether by sale, exchange, liquidation, redemption,
or otherwise) or upon the sale or redemption of Units by such Unit holder.
The price a Unit holder pays for his Units is allocated among his pro rata
portion of each Equity Security held by such Trust (in proportion to the
fair market values thereof on the date the Unit holder purchases his Units)
in order to determine his tax basis for his pro rata portion of each Equity
Security held by such Trust. For Federal income tax purposes, a Unit
holder's pro rata portion of dividends as defined by Section 316 of the
Code paid by a corporation with respect to an Equity Security held by the
Trust is taxable as ordinary income to the extent of such corporation's
current and accumulated "earnings and profits." A Unit holder's pro rata
portion of dividends paid on such Equity Security which exceeds such
current and accumulated earnings and profits will first reduce a Unit
holder's tax basis in such Equity Security and to the extent that such
dividends exceed a Unit holder's tax basis in such Equity Security shall be
treated as capital gain. In general, any such capital gain will be short
term unless a Unit holder has held his Units for more than one year.
iii. A Unit holder's portion of gain, if any, upon the sale or
redemption of Units or the disposition of Equity Securities held by the
Trust will generally be considered a capital gain except in the case of a
dealer or a financial institution and will be generally long-term if the
Unit holder has held his Units for more than one year. A Unit holder's
portion of loss, if any, upon the sale or redemption of Units or the
disposition of Equity Securities held by the Trust will generally be
considered a capital loss (except in the case of a dealer or a financial
institution) and will be generally long-term if the Unit holder has held
his Units for more than one year. Unit holders should consult their tax
advisers regarding the recognition of gains and losses for Federal income
tax purposes. In particular, Rollover Unit holders should be aware that a
Rollover Unit holder's loss, if any, incurred in connection with the
exchange of Units for Units in the next new series of the Voyageur Equity
Trust (the "1997 TRUST"), if offered, will generally be disallowed with
respect to the disposition of any Equity Securities pursuant to such
exchange to the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions of the
Code taking into account such Unit holder's deemed ownership of securities
underlying the Units in the 1997 Trust in the manner described above, if
such substantially identical securities were acquired within a period
beginning 30 days before and ending 30 days after such disposition.
However, any gains incurred in connection with such an exchange by a
Rollover Unit holder would be recognized.
Each Unit holder's pro rate share of each expense paid by a Trust is
deductible by the Unit holder to the same extent as thought the expense had been
paid directly by him, subject to the following limitation. It should be noted
that as a result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to the
extent they exceed 2% of such individual's adjusted gross income. Unit holders
may be required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
The scope of this opinion is expressly limited to the matters set forth
herein, and, except as expressly set forth above, we express no opinion with
respect to any other taxes, including state or local taxes or collateral tax
consequences with respect to the purchase, ownership and disposition of Units.
We have also examined the laws of the State of Missouri to determine their
applicability to the Fund. It is our opinion that under Missouri law, as
presently enacted and construed:
(i) The Trust is not an association taxable as a corporation for
Missouri income tax purposes.
(ii) The Unitholders of the Trust will be treated as the owners of a
pro rata portion of each Trust and the income of the Trust will therefore
be treated as income of the Unitholders under Missouri law.
(iii) The Trust will not be subject to the Kansas City, Missouri
Earnings and Profits Tax and each Unitholder's share of income of each
Trust will not generally be subject to the Kansas City, Missouri Earnings
and Profits Tax or the City of St. Louis Earnings Tax (except in the case
of certain Unitholders, including corporations, otherwise subject to the
St. Louis city Earnings Tax).
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62179) relating to the Units referred to
about and to the use of our name and to the reference to our firm in said
Registration Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EXHIBIT 6
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm as experts under the caption
"Other Matters" and to the use of our report dated January 3, 1996 in Amendment
No. 3 to the Registration Statement (Form S-6 File No. 33-62179) and related
Prospectus of Voyageur Unit Investment Trust, Series 4.
KPMG PEAT MARWICK LLP
Minneapolis, Minnesota
January 3, 1996
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMENDMENT
NO. 3 TO THE REGISTRAITON STATEMENT ON FORM S-6 OF VOYAGEUR FUND MANAGERS, INC.,
DEPOSITOR AND SPONSOR OF VOYAGEUR UNIT INVESTMENT TRUST, SERIES 4, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000949849
<NAME> VOYAGEUR UNIT INVESTMENT TURST, SERIES 4
<SERIES>
<NUMBER> 1
<NAME> MINNESOTA'S BIG TEN EQUITY TRUST, SERIES 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-03-1996
<PERIOD-END> JAN-04-1997
<INVESTMENTS-AT-COST> 400,769
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 425,167
<TOTAL-ASSETS> 425,167
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,090
<TOTAL-LIABILITIES> 32,090
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 404,817
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 393,077
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
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<EQUALIZATION> 0
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<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<EXPENSE-RATIO> .12
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<AVG-DEBT-PER-SHARE> 0
</TABLE>