Exhibit 1.1
CLAYMORE SECURITIES DEFINED PORTFOLIOS,
SERIES 217
S&P 100 INDEX PORTFOLIO, SERIES 12
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated as of April 6, 2005, between
Claymore Securities, Inc., as Depositor, and The Bank of New York, as Trustee,
sets forth certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions of Trust For
Series Formed on or Subsequent to December 18, 2001" (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 this instrument.
PART II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(1) The securities listed in the Schedule hereto have been
deposited in the Trust(s) under this Reference Trust Agreement as
indicated on the attached Schedule A.
(2) For the purposes of the definition of the term "Unit" in
Article I, it is hereby specified that the fractional undivided
interest in and ownership of a Trust is the amount described in
Amendment No. 1 to the Trust's Registration Statement (Registration No.
333-123057) as filed with the Securities and Exchange Commission today.
The fractional undivided interest may (a) increase by the number of any
additional Units issued pursuant to Section 2.03, (b) increase or
decrease in connection with an adjustment to the number of Units
pursuant to Section 2.03, or (c) decrease by the number of Units
redeemed pursuant to Section 5.02.
(3) The term "Deferred Sales Charge" shall mean the "deferred
sales fee" as described in the Prospectus.
(4) The terms "Income Account Record Date" and "Capital
Account Record Date" shall mean the dates set forth under "Essential
Information--Record Dates" in the Prospectus.
(5) The terms "Income Account Distribution Date" and "Capital
Account Distribution Date" shall mean the dates set forth under
"Essential Information--Distribution Dates" in the Prospectus.
(6) The term "Initial Date of Deposit" shall mean the date of
this Reference Trust Agreement as set forth above.
(7) The definition of "Supplemental Indenture" is hereby
deleted in its entirety.
(8) The definition of "Addendum to the Reference Trust
Agreement" is hereby deleted in its entirety.
(9) Section 2.03 is hereby amended and replaced in its
entirety with the following:
Section 2.03. Issuance of Units. By executing the Reference Trust
Agreement and receipt for deposited Securities, the Trustee will thereby
acknowledge receipt of the deposit of the Securities listed in the Schedules to
the Reference 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 Reference
Trust Agreement and has delivered, or on the order of the Depositor will
deliver, in exchange for such Securities, cash or a Letter of Credit,
documentation evidencing the ownership of the number of Units specified or, if
requested by the Depositor, the ownership by DTC of all such Units and will
cause such Units to be credited at DTC to the account of the Depositor or,
pursuant to the Depositor's direction and as hereafter provided, the account of
the issuer of the Letter of Credit referred to in Section 2.01. The number of
Units in a Trust may be increased through a split of the Units or decreased
through a reverse split thereof, as directed by the Depositor, on any day on
which the Depositor is the only Unitholder of such Trust, which revised number
of Units shall be recorded by the Trustee on its books. Effective as of the
Evaluation Time on April 6, 2005, in the event that the aggregate value of
Securities in the Trust has increased since the evaluation on April 5, 2005, the
Trustee shall issue such number of additional Units to the Unitholder of
outstanding Units as of the close of business on April 5, 2005, that the price
per Unit computed as of the Evaluation Time on April 6, 2005, plus the maximum
applicable sales charge shall equal approximately $10 per Unit (based on the
number of Units outstanding as of said Evaluation Time, including the additional
Units issued pursuant to this sentence); in the event that the aggregate value
of Securities in the Trust Fund has decreased since the evaluation on April 5,
2005, there will be a reverse split of the outstanding Units, and said
Unitholder will surrender to the Trustee for cancellation such number of Units,
that the price per Unit computed as of the Evaluation Time on April 6, 2005,
plus the maximum applicable sales charge shall equal approximately $10 per Unit
(based on the number of Units outstanding as of said Evaluation Time, reflecting
cancellation of Units pursuant to this sentence). The Trustee hereby agrees that
on the date of any deposit of additional Securities pursuant to Section 2.05 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.
(10) The number of Units of the Trust(s) referred to in
Section 2.03 shall be equal to the "Number of Units" in the
Statement(s) of Financial Condition in the Prospectus.
(11) The first paragraph of Section 5.01 is hereby amended and
restated to read as follows:
Section 5.01. Trust Evaluation. As of the Evaluation Time (a)
on the last Business Day of each year, (b) on the day on which any Unit
is tendered for redemption and (c) on any other day desired by the
Trustee or requested by the Depositor, the Trustee shall: Add (i) all
moneys on deposit in a Trust (excluding (1) cash, cash equivalents or
Letters of Credit deposited pursuant to Section 2.01 hereof for the
purchase of Contract Securities, unless such cash or Letters of Credit
have been deposited in the Interest and Principal Accounts because of
failure to apply such moneys to the purchase of Contract Securities
pursuant to the provisions of Sections 2.01, 3.03 and 3.04 hereof and
(2) moneys credited to the Reserve Account pursuant to Section 3.05
hereof), plus (ii) the aggregate Evaluation of all Securities
(including Contract Securities and Reinvestment Securities) on deposit
in such Trust as is determined by the Evaluator (such evaluations shall
take into account and itemize separately (i) the cash on hand in the
Trust or moneys in the process of being collected from matured interest
coupons or bonds matured or called for redemption prior to maturity,
(ii) the value of each issue of the Securities in the Trust on the bid
side of the market as determined by the Evaluator pursuant to Section
4.01, and (iii) interest accrued thereon not subject to collection and
distribution). For each such Evaluation there shall be deducted from
the sum of the above (i) amounts representing any applicable taxes or
governmental charges payable out of the respective Trust and for which
no deductions shall have previously been made for the purpose of
addition to the Reserve Account, (ii) amounts representing estimated
accrued fees of the Trust and expenses of such Trust including but not
limited to unpaid fees and expenses of the Trustee, the Evaluator, the
Supervisor, the Depositor and bond counsel, in each case as reported by
the Trustee to the Evaluator on or prior to the date of evaluation,
(iii) any moneys identified by the Trustee, as of the date of the
Evaluation, as held for distribution to Unitholders of record as of a
Record Date or for payment of the Redemption Value of Units tendered
prior to such date and (iv) unpaid organization costs in the estimated
amount per Unit set forth in the Prospectus. The resulting figure is
herein called a "Trust Fund Evaluation." The value of the pro rata
share of each Unit of the respective Trust determined on the basis of
any such evaluation shall be referred to herein as the "Unit Value."
(12) For the purposes of Section 6.01(g)(i), the liquidation
amount shall be 20% of the total value of all Securities deposited in
the Trust(s) during a Trust's initial offering period at the time of
each such deposit.
(13) Article III is hereby amended by adding the following
section:
Section 3.23. Bookkeeping and Administrative Expenses. If so
provided in the Prospectus, as compensation for providing bookkeeping
and other administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the extent such
services are in addition to, and do not duplicate, the services to be
provided hereunder by the Trustee or the Depositor for providing
supervisory services, the Depositor shall receive at the times
specified in Section 3.05, against a statement or statements therefor
submitted to the Trustee an aggregate annual fee in an amount which
shall not exceed that amount set forth in the Prospectus, calculated as
specified in Section 3.05, but in no event shall such compensation,
when combined with all compensation received from other series of the
Trust or other unit investment trusts sponsored by the Depositor or its
affiliates for providing such bookkeeping and administrative services
in any calendar year exceed the aggregate cost to the Depositor for
providing such services to such unit investment trusts. Such
compensation may, from time to time, be adjusted provided that the
total adjustment upward does not, at the time of such adjustment,
exceed the percentage of the total increase, during the period from the
Trust Agreement to the date of any such increase, in consumer prices
for services as measured by the United States Department of Labor
Consumer Price Index entitled "All Services Less Rent of Shelter" or
similar index as described under Section 3.18. The consent or
concurrence of any Unitholder hereunder shall not be required for any
such adjustment or increase. Such compensations shall be paid by the
Trustee, upon receipt of invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against the Income
and Capital Accounts as specified in Section 3.05. The Trustee shall
have no liability to any Unitholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts shall
be insufficient to provide for amounts payable pursuant to this Section
3.23, the Trustee shall have the power to sell (1) Securities from the
current list of Securities designated to be sold pursuant to Section
5.02 hereof, or (2) 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 3.23.
Any moneys payable to the Depositor pursuant to this Section
3.23 shall be secured by a prior lien on the Trust except that no such
lien shall be prior to any lien in favor of the Trustee under the
provisions of Section 6.04.
(14) The phrases "supervisory services," "supervisory
portfolio services" and "portfolio supervisory services" in Sections
3.18 are hereby replaced with the phrase "portfolio supervisory
services and bookkeeping and administrative expenses."
(15) Section 7.05 is hereby amended and replaced in its
entirety with the following:
Section 7.05. Compensation. The Depositor shall receive at the
times set forth in Sections 3.05, 3.18, 3.23 and 4.03 as compensation
for performing portfolio supervisory services, bookkeeping and
administrative expenses and evaluation services, such amount and for
such periods as specified the Prospectus and/or Reference Trust
Agreement. The compensation for providing portfolio supervisory
services, bookkeeping and administrative expenses and evaluation
services shall be made on the basis of the largest number of units
outstanding at any time during the period for which such compensation
is being computed. At no time, however, will the total amount received
by the Depositor for services rendered to all series of Claymore
Securities Defined Portfolios in any calendar year exceed the aggregate
cost to them of supplying such services in such year. Such rate may be
increased by the Trustee from time to time, without the consent or
approval of any Unitholder, or the Depositor, by amounts not exceeding
the proportionate increase during the period from the date of such
Prospectus and/or Reference Trust Agreement to the date of any such
increase, in consumer prices as published either under the
classification "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if such Index is
no longer published, a similar index.
In the event that any amount of the compensation paid to the
Depositor pursuant to Sections 3.05, 3.18 and 3.23 and 4.03 is found to
be an improper charge against a Trust, the Depositor shall reimburse
the Trust in such amount. An improper charge shall be established if a
final judgment or order for reimbursement of the Trust shall be
rendered against the Depositor and such judgment or order shall not be
effectively stayed or a final settlement is established in which the
Depositor agrees to reimburse the Trust for amounts paid to the
Depositor pursuant to this Section 7.05.
(16) The first two sentences of Section 3.22 are hereby
amended and replaced with the following:
Section 3.22. Creation and Development Fee. If the Prospectus
related to a Trust specifies a creation and development fee, the
Trustee shall, on or immediately after the end of the initial offering
period, withdraw from the Capital Account, an amount equal to the
unpaid creation and development fee as of such date and credit such
amount to a special non-Trust account designated by the Depositor out
of which the creation and development fee will be distributed to the
Depositor (the "Creation and Development Account"). The creation and
development fee is the per unit amount specified in the Prospectus for
the Trust.
(17) Article III is hereby amended by adding the following
section:
Section 3.24. License Fees. If so provided in the Prospectus,
the Depositor may enter into a Licensing Agreement (the "Agreement")
with a licensor (the "Licensor") described in the Prospectus in which
the Trust(s), as consideration for the licenses granted by the Licensor
for the right to use its trademarks and trade names, intellectual
property rights or for the use of databases and research owned by the
Licensor, will pay a fee set forth in the Agreement to the applicable
Licensor or the Depositor to reimburse the Depositor for payment of the
expenses.
If the Agreement provides for an annual license fee computed
in whole or part by reference to the average daily net asset value of
the Trust assets, for purpose of calculating the accrual of estimated
expenses such annual fee shall accrue at a daily rate and the Trustee
is authorized to compute an estimated license fee payment (i) until the
Depositor has informed the Trustee that there will be no further
deposits of additional Securities, by reference to an estimate of the
average daily net asset value of the Trust assets which the Depositor
shall provide the Trustee, (ii) thereafter and during the calendar
quarter in which the last business day of the period described in
clause (i) occurs, by reference to the net asset value of the Trust
assets as of such last business day, and (iii) during each subsequent
calendar quarter, by reference to the net asset value of the Trust
assets as of the last business day of the preceding calendar quarter.
The Trustee shall adjust the net asset value (Trust Fund Evaluation) as
of the dates specified in the preceding sentence to account for any
variation between accrual of estimated license fee and the license fee
payable pursuant to the Agreement, but such adjustment shall not affect
calculations made prior thereto and no adjustment shall be made in
respect thereof.
(18) Section 2.05 (b) is replaced in its entirety with the
following:
(b) Additional Securities deposited during the 90 days
following the initial deposit made pursuant to Section 2.01 hereof
shall maintain as closely as practicable the Original Proportionate
Relationship, except as provided in this Section 2.05(b). Additional
Securities may be deposited or purchased in round lots; if the amount
of the deposit is insufficient to acquire round lots of each Security
to be acquired, the Additional Securities shall be deposited or
purchased in the order of the Security in the Trust most under
represented immediately before the deposit with respect to the Original
Proportionate Relationship. Instructions to purchase Additional
Securities under this Section shall be in writing and shall direct the
Trustee to purchase, or enter into contracts to purchase, Additional
Securities; such instructions shall also specify the name, CUSIP
number, if any, aggregate amount of each such Additional Security and
price or range of price. If, at the time of a subsequent deposit under
this Section, Securities of an Original Issue are unavailable, cannot
be purchased at reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, in lieu of the
portion of the deposit that would otherwise be represented by those
Securities, the Depositor may (A) deposit (or instruct the Trustee to
purchase) Securities of another Original Issue or (B) deposit cash or a
letter of credit with instructions to acquire the Securities of such
Original Issue when they become available.
(19) Section 4.01(b) is replaced in its entirety by the
following:
(b) During the initial offering period such Evaluation shall
be made in the following manner: if the Securities are listed on a
national securities exchange or foreign securities exchange, such
Evaluation shall generally be based on the last available sale price on
or immediately prior to the Evaluation Time on the exchange which is
the principal market therefor, which shall be deemed to be the New York
Stock Exchange if the Securities are listed thereon (unless the
Evaluator deems such price inappropriate as a basis for evaluation) or,
if there is no such available sale price on such exchange, at the last
available offer prices of the Securities. Securities not listed on the
New York Stock Exchange but principally traded on the Nasdaq National
Market System will be valued at Nasdaq's official close price. If the
Securities are not so listed or, if so listed, the principal market
therefor is other than on such exchange or there is no such available
sale price on such exchange, such Evaluation shall generally be based
on the following methods or any combination thereof whichever the
Evaluator deems appropriate: (i) on the basis of the current offer
price for comparable securities (unless the Evaluator deems such price
inappropriate as a basis for evaluation), (ii) by determining the
valuation of the Securities on the offer side of the market by
appraisal or (iii) by any combination of the above. If the Trust holds
Securities denominated in a currency other than U.S. dollars, the
Evaluation of such Security shall be converted to U.S. dollars based on
current offering side exchange rates (unless the Evaluator deems such
prices inappropriate as a basis for valuation). The Evaluator shall add
to the Evaluation of each Security which is traded principally on a
foreign securities exchange the amount of any commissions and relevant
taxes associated with the acquisition of the Security. As used herein,
the closing sale price is deemed to mean the most recent closing sale
price on the relevant securities exchange immediately prior to the
Evaluation Time. For each Evaluation, the Evaluator shall also confirm
and furnish to the Trustee and the Depositor, on the basis of the
information furnished to the Evaluator by the Trustee as to the value
of all Trust assets other than Securities, the calculation of the Trust
Fund Evaluation to be computed pursuant to Section 5.01.
(20) Section 4.01(c) is replaced in its entirety by the
following:
(c) For purposes of the Trust Fund Evaluations required by
Section 5.01 in determining Redemption Value and Unit Value and for
secondary market purchases, Evaluation of the Securities shall be made
in the manner described in 4.01(b), on the basis of the last available
bid prices of the Securities (rather than offer prices), except in
those cases in which the Securities are listed on a national securities
exchange or a foreign securities exchange and the last available sale
prices are utilized. In addition, with respect to each Security which
is traded principally on a foreign securities exchange, the Evaluator
shall (i) not make the addition specified in the fourth sentence of
Section 4.01(b) and (ii) shall reduce the Evaluation of each Security
by the amount of any liquidation costs (other than brokerage costs
incurred on any national securities exchange) and any capital gains or
other taxes which would be incurred by the Trust upon the sale of such
Security, such taxes being computed as if the Security were sold on the
date of the Evaluation.
(21) Section 9.05 is hereby revised to read as follows:
Section 9.05. Written Notice. Any notice, demand, direction or
instruction to be given to the Depositor, Evaluator or Supervisor
hereunder shall be in writing and shall be duly given if mailed or
delivered to the Depositor, 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxxx
00000, or at such other address as shall be specified by the Depositor
to the other parties hereto in writing.
(22) The second paragraph of Section 6.02 is replaced in its
entirety as follows:
An audit of the accounts of each Trust shall not be conducted
unless the Depositor determines that such an audit is required. In the
event that the Depositor determines that an audit is required, the
accounts 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, if any,
indicated in the Prospectus relating to such Trust. The Trustee shall
maintain and provide, upon the request of a Unitholder or the
Depositor, the Unitholders' or the Unitholder's designated
representative with the cost basis of the Securities represented by the
Unitholder's Units.
(23) The first paragraph of Section 6.04 is replaced in its
entirety as follows:
Section 6.04. Compensation. Subject to the provisions of
Section 3.14 hereof, the Trustee shall receive at the times set forth
in Section 3.05, as compensation for performing ordinary normal
recurring services under this Indenture, an amount calculated at the
annual compensation rate stated in the Prospectus. The Trustee shall
charge a pro rated portion of its annual fee at the times specified in
Section 3.05, which pro rated portion shall be calculated on the basis
of the largest number of Units in such Trust at any time during the
primary offering period. After the primary offering period has
terminated, the fee shall accrue daily and be based on the number of
Units outstanding on the first business day of each calendar year in
which the fee is calculated or the number of Units outstanding at the
end of the primary offering period, as appropriate. The Trustee may
from time to time adjust its compensation as set forth above, provided
that total adjustment upward does not, at the time of such adjustment,
exceed the percentage of the total increase, after the date hereof, in
consumer prices for services as measured by the United States
Department of Labor Consumer Price Index entitled "All Services Less
Rent," or, if such index shall cease to be published, then as measured
by the available index most nearly comparable to such index. The
consent or concurrence of any Unitholder hereunder shall not be
required for any such adjustment or increase, however, the consent of
the Depositor shall be required. Such compensation shall be charged by
the Trustee against the Income and Capital Accounts of each Trust;
provided, however, that such compensation shall be deemed to provide
only for the usual, normal and proper functions undertaken as Trustee
pursuant to this Indenture.
(24) Section 3.05(b)(i) is hereby amended by adding the following
after the last sentence:
Notwithstanding anything to the contrary contained in this
paragraph, if a Trust has elected to be treated as a "regulated
investment company" as defined in the Internal Revenue Code and the
Trust's portfolio is based upon an index, the Depositor or its designee
may, but is not obligated to, direct the investment of any amounts held
in the Capital Account that have not previously been used to pay for
the redemption of Units tendered to a Trust into any Securities
included in the applicable index.
(25) Section 3.05 is hereby amended by adding the following as
subsection (c):
(f) Notwithstanding the foregoing, if a Trust has elected to
be treated as a "regulated investment company" as defined in the
Internal Revenue Code, the Trustee may make such additional
distributions to Unitholders as shall be determined by the Depositor or
such agent as the Depositor shall designate to be necessary or
desirable to maintain the status of each Trust as a regulated
investment company or to avoid imposition of any income or excise taxes
on undistributed income of the Trust. The Trustee shall be authorized
to rely conclusively upon the direction, and shall have no duty to make
any additional distributions from a Trust in the absence of such
direction. The Trustee shall have no liability for any tax or other
liability incurred by reason of action or inaction resulting from such
direction. The fees of such agent designated by the Depositor shall be
an expense of the Trust reimbursable to the Trustee in accordance with
Section 6.04.
(26) Subsection 3.07 is hereby amended by adding the following as
subsection (c):
(b) If a Trust has elected to be treated as a "regulated
investment company" as defined in the Internal Revenue Code, and not
withstanding anything to the contrary in 3.07(a) and (b), 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:
(1) 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;
(2) 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;
(3) that such sale is necessary or advisable (i) to maintain
the qualification of the Trust as a regulated investment company
or (ii) to provide funds to make any distribution for a taxable
year in order to avoid imposition of any income or excise taxes
on undistributed income in the Trust;
(4) that the Security has been removed from the applicable
index; or
(5) the Depositor or its designee determines that such sale
is appropriate.
Upon receipt of such direction from the Depositor, the Trustee
shall proceed to sell the specified Securities in such manner as the
Depositor or its designee shall direct. If the Trust's portfolio is
based upon an index, the Depositor or its designee may enter into
contracts on behalf of the Trust to reinvest the proceeds of the sale
of any Security sold pursuant to this section, Section 5.02 or
otherwise pursuant to this Indenture into any Security included in the
applicable index. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor
may, but is not obligated to, specifically consider the ability of the
Trust to reinvest such proceeds into round lots of a Security.
Contracts for sale or purchase of Securities shall be made by the
Depositor on behalf of the Trust or by such agent as the Depositor
shall designate. The Depositor or its designee shall provide the
Trustee such information as the Trustee may require in order to settle
the transactions. The Trustee shall not be liable or responsible in any
way for depreciation or loss incurred by reason of any sale or purchase
made pursuant to any such direction or by reason of the failure of the
Depositor to give any such direction, and in the absence of such
direction the Trustee shall have no duty to sell or purchase any
Securities under this Section 3.07(c) and shall have no responsibility
for the composition of each Trust portfolio. The Depositor shall not be
liable for errors of judgment in directing or failing to direct the
Trustee pursuant to this Section 3.07(c). This provision, however,
shall not protect the Depositor against any liability for 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.
The Depositor or its designated agent shall make such reviews
of each Trust portfolio as shall be necessary to maintain qualification
of a particular Trust as a regulated investment company and the
Depositor shall be authorized to rely conclusively upon such reviews in
directing sales pursuant to paragraph (3) of this section.
(27) Section 3.11 is hereby revised to read as follows:
Section 3.11. Reorganization and Similar Events. (a) In the
event that an offer by the issuer of any of the Securities or any other
party shall be made to issue new securities, or to exchange securities,
for Trust Securities, the Trustee shall reject such offer. However,
should any issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer, any
securities, cash and/or property received in exchange shall be
deposited hereunder and shall be promptly sold, if securities or
property, by the Trustee, unless the Depositor advises the Trustee to
keep such securities or property. The Trustee also may accept a tender
offer for cash if the Supervisor determines that the sale or tender is
in the best interest of the Unitholders. The cash received in such
exchange and cash proceeds of any such sale or tender offer shall be
distributed to Unitholders on the next Income Distribution Date in the
manner set forth in Section 3.05 regarding distributions from the
Capital Account. This section shall apply, but its application shall
not be limited, to public tender offers, mergers, acquisitions,
reorganizations and recapitalizations. Unless the Depositor directs
that notice be otherwise provided, the Trustee shall include notice of
any Security so acquired in the annual statement provided to
Unitholders pursuant to Section 3.06. Except as provided in Article VI,
neither the Depositor nor 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 3.11 other than failure to notify the Depositor.
(b) Notwithstanding the foregoing, if a Trust has elected to
be treated as a "regulated investment company" as defined in the
Internal Revenue Code, in the event that an offer by the issuer of any
of the Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities, the
Trustee shall reject such offer. However, should any issuance, exchange
or substitution be effected notwithstanding such rejection or without
an initial offer, any securities, cash and/or property received shall
be deposited hereunder and shall be promptly sold, if securities or
property, by the Trustee pursuant to the Depositor's direction, unless
the Depositor advises the Trustee to keep such securities or property;
provided, however, if the Trust's portfolio is based upon an index, and
such securities are components of the applicable index, the Depositor
may advise the Trustee to keep such securities. The cash received in
such exchange and cash proceeds of any such sales shall, as the
Depositor or its designee shall direct, be (1) reinvested into any
Securities included in the applicable index, if the Trust's portfolio
is based upon an index, or (2) distributed to Unitholders on the next
Capital Account Distribution Date in the manner set forth in this
indenture regarding distributions from the Capital Account. Without
limiting the generality of the foregoing, in determining whether such
reinvestment is practicable, the Depositor may, but is not obligated
to, specifically consider the ability of a Trust to reinvest such
proceeds into round lots of a Security. Except as provided in Article
VI, the Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any such rejection or sale.
(28) Subsections (a) through (e) of Section 3.17 are hereby
restated to read as follows:
(a) The Replacement Securities shall be Equity Securities as
originally selected for deposit in that series of the Trust.
Notwithstanding the foregoing, if a Trust has elected to be
treated as a "regulated investment company," as defined in the
Internal Revenue Code and the Trust's portfolio is based upon an
index, the Replacement Securities shall be a component of the
applicable index.
(b) The purchase of the Replacement Securities shall not
adversely affect the federal income tax status of the Trust.
(c) The purchase price of the Replacement Securities shall
not exceed the total amount of cash deposited, or the amount
available under the Letter of Credit deposited, by the Depositor
at the time of the deposit of the Failed Contract Security.
(d) The written instructions of the Depositor shall (i)
identify the Replacement Securities to be purchased, (ii) state
that the contract to purchase, if any, to be entered into by the
Trustee is satisfactory in form and substance and (iii) state
that the foregoing conditions of clauses (a) through (d) have
been satisfied with respect to the Replacement Securities.
(e) The Replacement Securities shall be purchased within 30
days after the deposit of the Failed Contract Security.
(f) Notwithstanding the foregoing clauses (c) and (d), if a
Trust has elected to be treated as a "regulated investment
company," as defined in the Internal Revenue Code, the Depositor
shall furnish a notice to the Trustee in respect to the
Replacement Security purchased or to be purchased that shall (1)
identify the Replacement Securities, (2) state that the contract
to purchase, if any, entered into by the Depositor is
satisfactory in form and substance and (3) state that the
foregoing conditions of clause (a) have been satisfied with
respect to the Replacement Securities.
(29) Article III is hereby amended by adding the following
Section 3.25:
Section 3.25. Regulated Investment Company Election.
If so provided in the Prospectus for a Trust, such Trust elects to be
treated and to qualify as a "regulated investment company" as defined
in the Internal Revenue Code, and the Trustee is hereby directed to
make such elections, including any appropriate election to be taxed as
a corporation, as shall be necessary to effect such qualification.
(30) Section 5.02 is hereby amended by adding the following after
the last sentence:
If a Trust has elected to be taxed as a "regulated investment
company" and such Trust's portfolio is based upon an index, and if
Securities in the Trust are sold for the payment of the Redemption
Price and there are excess proceeds remaining after meeting redemption
requests, the Depositor or its designee may, but is not obligated to,
direct the investment of such excess proceeds into any Securities
included in the applicable index.
(31) Section 9.02 is hereby amended by additng the following
after the last sentence:
If a Trust has elected to be treated as a "regulated
investment company" as defined in the Internal Revenue Code, and if the
Trust involved seeks to consist of securities included in a securities
index, then notwithstanding anything to the contrary herein, if at any
time the index shall no longer be compiled, maintained or made
available, the Depositor may (i) direct that the Trust created hereby
continue to be operated hereunder utilizing the components of the index
as existed on the last date on which the index components were
available to a Trust or (ii) direct the Trustee to terminate this
Indenture and the Trust created hereby and liquidate the Trust in such
manner as the Depositor shall direct.
(32) Section 9.01 is hereby amended by adding the following as
subsection (d):
(d) If a Trust has elected to be treated as a "regulated
investment company" as defined in the Internal Revenue Code and
notwithstanding Section 9.01(a), this Indenture may be amended from
time to time by the Depositor and the Trustee without the consent of
any of the Unitholders (1) 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; (2) to change
any provision hereof as may be required by the Securities and Exchange
Commission or any successor governmental agency exercising similar
authority; (3) to make such amendments as may be necessary for each
Trust to continue to qualify as a regulated investment company for
federal income tax purposes; or (4) 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 Indenture may also be amended from
time to time by the Depositor and the Trustee (or the performance of
any of the provisions of this Indenture may be waived) with the consent
of holders of Units representing 66-2/3% of the Units at the time
outstanding under the Trust Indenture of the individual Trust or Trusts
affected for the purpose of adding any provisions of this Indenture or
of materially modifying in any manner the rights of the holders of
Units of such Trust or Trusts; provided, however, that in no event may
any amendment be made which would (1) alter the rights to the
Unitholders as against each other, (2) provide the Trustee with the
power to engage in business or investment activities other than as
specifically provided in this Indenture or (3) adversely affect the
characterization of a Trust as a regulated investment company for
federal income tax purposes; provided, further, that the consent of
100% of the Unitholders of any individual Trust is required to amend
this Indenture (1) to reduce the aforesaid percentage of Units the
holders of which are required to consent to certain amendments and (2)
to reduce the interest in such Trust represented by any Units of such
Trust.
Promptly after the execution of any amendment requiring the
consent of the Unitholders or any of any other amendment if directed by
the Depositor, 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 9.01 or under Section 9.02 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.
(33) Section 3.01 is hereby amended by as follows:
Section 3.01. Initial Costs. Subject to reimbursement as
hereinafter provided, the cost of organizing the Trust and sale of the
Trust Units shall be borne by the Depositor, provided, however, that
the liability on the part of the Depositor under this Section shall not
include any fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit referred to in
Section 2.01. Upon notification from the Depositor that the primary
offering period is concluded, or after six months, if earlier, the
Trustee shall withdraw from the Account or Accounts specified in the
Prospectus or, if no Account is therein specified, from the Capital
Account as further set forth in Section 3.03, and pay to the Depositor
the Depositor's reimbursable expenses of organizing the Trust and sale
of the Trust Units in an amount certified to the Trustee by the
Depositor but not in excess of the estimated per-Unit amount set forth
in the Prospectus multiplied by the number of Units outstanding as of
the conclusion of the primary offering period. If the cash balance of
the Capital Account is insufficient to make such withdrawal, the
Trustee shall, as directed by the Depositor, sell Securities identified
by the Depositor, or distribute to the Depositor Securities having a
value, as determined under Section 4.01 as of the date of distribution,
sufficient for such reimbursement. Securities sold or distributed to
the Depositor to reimburse the Depositor pursuant to this Section shall
be sold or distributed by the Trustee to the extent practicable, in the
percentage ratio then existing (unless the Trust elects to be treated
as a "regulated investment company" as defined in the United States
Internal Revenue Code (the "Internal Revenue Code"), in which case
sales or distributions by the Trustee shall be made in accordance with
the instructions of the Depositor or its designees). The reimbursement
provided for in this Section shall be for the account of the
Unitholders of record at the conclusion of the primary offering period.
Any assets deposited with the Trustee in respect of the expenses
reimbursable under this Section shall be held and administered as
assets of the Trust for all purposes hereunder. The Depositor shall
deliver to the Trustee any cash identified in the Statement of
Financial Condition of the Trust included in the Prospectus not later
than the First Settlement Date and the Depositor's obligation to make
such delivery shall be secured by the Letter of Credit deposited
pursuant to Section 2.01. Any cash which the Depositor has identified
as to be used for reimbursement of expenses pursuant to this Section
shall be held by the Trustee, without interest, and reserved for such
purpose and, accordingly, prior to the conclusion of the primary
offering period, shall not be subject to distribution or, unless the
Depositor otherwise directs, used for payment of redemptions in excess
of the per-Unit amount payable pursuant to the next sentence. If a
Unitholder redeems Units prior to the conclusion of the primary
offering period, the Trustee shall pay to the Unitholder, in addition
to the Redemption Price of the tendered Units, an amount equal to the
estimated per-Unit cost of organizing the Trust and the sale of Trust
Units set forth in the Prospectus multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in the Trust is
insufficient for such payment, the Trustee shall have the power to sell
Securities in accordance with Section 5.02. As used herein, the
Depositor's reimbursable expenses of organizing the Trust and sale of
the Trust Units shall include the cost of the initial preparation and
typesetting of the registration statement, prospectuses (including
preliminary prospectuses), the indenture, and other documents relating
to the Trust, Securities and Exchange Commission and state blue sky
registration fees, the cost 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.
(34) Section 2.01 is hereby amended and replaced in its entirety
with the following:
Section 2.01. Deposit of Securities. The Depositor, on the date of the
Reference Trust Agreement, has deposited with the Trustee in trust the
Securities and contracts (or cash or a Letter of Credit in the amount necessary
to settle any contracts for the purchase of Securities entered into by the
Trustee pursuant to the instructions of the Depositor) for the purchase of
Contract Securities listed in the Schedules to the Reference Trust Agreement in
bearer form or duly endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form or Contract Securities
relating to such Securities to be held, managed and applied by the Trustee as
herein provided. The Depositor shall deliver the Securities listed on said
Schedules which were not actually delivered concurrently with the execution and
delivery of the Reference Trust Agreement and which were represented by Contract
Securities to the Trustee within 10 calendar days after said execution and
delivery (the "Delivery Period"). In the event that the purchase of Contract
Securities pursuant to any contract shall not be consummated in accordance with
said contract or if the Securities represented by Contract Securities are not
delivered to a Trust in accordance with this Section 2.01 and the moneys, or, if
applicable, the moneys drawn on the Letter of Credit, deposited by the Depositor
are not utilized for Section 3.17 purchases of Replacement Securities, such
funds, to the extent of the purchase price of Failed Contract Securities for
which no Replacement Security were acquired pursuant to Section 3.17, plus all
amounts described in the next succeeding sentence, shall be credited to the
Capital Account and distributed pursuant to Section 3.05 to Unitholders of
record as of the Income Account 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 Failed Contract Security. Any amounts
remaining from moneys drawn on the Letter of Credit which are not used to
purchase Replacement Securities or are not used to provide refunds to
Unitholders shall be paid to the Depositor. The Trustee is hereby irrevocably
authorized to effect registration or transfer of the Securities in fully
registered form to the name of the Trustee or to the name of its nominee or to
hold the Securities in a clearing agency registered with the Securities and
Exchange Commission or in a book entry system operated by the Federal Reserve
Board.
(35) Section 2.05(a) is hereby amended and replaced in its
entirety with the following:
Section 2.05. Deposit of Additional Securities. (a) Subject to the
requirements set forth below in this Section, the Depositor may, on any Business
Day (the "Trade Date"), subscribe for Additional Units as follows:
(1) Prior to the Evaluation Time defined in Section 5.01 on
the Trade Date, the Depositor shall provide notice (the "Subscription
Notice") to the Trustee of the Depositor's intention to subscribe for
Additional Units. The Subscription Notice shall identify the Additional
Securities to be acquired (unless such Additional Securities are a
precise replication of the then existing portfolio) and shall either
(i) specify the quantity of Additional Securities to be deposited by
the Depositor on the settlement date for such subscription or (ii)
instruct the Trustee to purchase Additional Securities with an
aggregate cost as specified in the Subscription Notice.
(2) Promptly following the Evaluation Time on such Business
Day, the Depositor shall verify with the Trustee, the number of
Additional Units to be created.
(3) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver the Additional Units
created thereby (which time shall not be later than the time by which
the Trustee is required to settle any contracts for the purchase of
Additional Securities entered into by the Trustee pursuant to the
instruction of the Depositor referred to in subparagraph (1) above),
the Depositor shall deposit with the Trustee (i) any Additional
Securities specified in the Subscription Notice (or contracts to
purchase such Additional Securities together with cash or a letter of
credit in the amount necessary to settle such contracts) or (ii) cash
or a letter of credit in the amount equal to the aggregate cost of the
Additional Securities to be purchased by the Trustee, as specified in
the Subscription Notice, together with, in each case, Cash defined
below. "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 Evaluation Time on
the Business Day preceding the Trade Date (other than amounts to be
distributed solely to persons other than persons receiving the
distribution from the Capital Account as holders of Additional Units
created by the deposit), and, as to the Income Account, cash or other
property (other than Securities) received by the Trust as of the
Evaluation Time on the Business Day preceding the Trade Date or
receivable by the Trust in respect of dividends or other distributions
declared but not received as of the Evaluation Time on the Business Day
preceding the Trade Date, reduced by the amount of any cash or other
property received or receivable on any Security allocable (in
accordance with the Trustee's calculation of the monthly distribution
from the Income Account pursuant to Section 3.05) to a distribution
made or to be made in respect of a Record Date occurring prior to the
Trade Date. Each deposit of securities made pursuant to this Section
2.05 shall consist of securities included in a securities index,
deposits of additional securities shall consist of Securities included
in the applicable index as determined by the Depositor or its designee.
(4) On the settlement date for a subscription, the Trustee
shall, in exchange for the Securities and cash or Letter of Credit
described above, issue and deliver to or on the order of the Depositor
the number of Units verified by the Depositor with the Trustee. No Unit
to be issued pursuant to this paragraph shall be issued or delivered
unless and until Securities, cash or a Letter of Credit is received in
exchange therefor and no person shall have any claim to any Unit not so
issued and delivered or any interest in the Trust in respect thereof.
(5) Any Additional Securities shall be held, administered and
applied by the Trustee in the same manner as herein provided for the
Securities.
(6) The acceptance of Additional Units by the Depositor in
accordance with the provisions of paragraph (a) of this Section shall
be deemed a certification by the Depositor that the deposit or purchase
of Additional Securities associated therewith complies with the
conditions of this Section 2.05.
(7) Notwithstanding the preceding, in the event that the
Depositor's Subscription Notice shall instruct the Trustee to purchase
Additional Securities in an amount which, when added to the purchase
amount of all other unsettled contracts entered into by the Trustee,
exceeds 25% of the value of the Securities then held (taking into
account the value of contracts to purchase Securities only to the
extent that there has been deposited with the Trustee cash or an
irrevocable letter of credit in an amount sufficient to settle their
purchase), the Depositors shall deposit with the Trustee concurrently
with the Subscription Notice cash or a letter of credit in an amount
such that, when added to 25% of the value of the Securities then held
(determined as above) the aggregate value shall be not less than the
purchase amount of the securities to be purchased pursuant to such
Subscription Notice.
This Reference Trust Agreement shall be deemed effective when executed
and delivered by the Sponsor and the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Reference Trust
Agreement to be duly executed.
CLAYMORE SECURITIES, INC., DEPOSITOR
By /s/ Xxxxxxxx Xxxxxxx
------------------------------------------------------
Senior Managing Director and
General Counsel
THE BANK OF NEW YORK, TRUSTEE
By /s/ Xxxxxx Xxxxxxxx
-------------------------------------------------------
Vice President
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 217
(Note: Incorporated herein and made a part hereof are the "Trust
Portfolio(s)" as set forth in the Prospectus.)
