Exhibit 1.1
CLAYMORE SECURITIES DEFINED PORTFOLIOS,
SERIES 186
IQ/CLAYMORE MUNICIPAL PORTFOLIO (10-15 YEARS), SERIES 1
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated as of September 23, 2004, 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 February 6, 2002" (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 for each separate Trust created under this Series.
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(s) 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. 2 to the Trust's Registration Statement
(Registration No. 333-117587) 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 2.05, (b)
increase or decrease in connection with an adjustment to the number of
Units pursuant to Section 2.05, or (c) decrease by the number of Units
redeemed pursuant to Section 5.02.
(3) The term "RECORD DATE" shall mean the first day of each month
for principal distributions and the dates set forth in the Prospectus for
interest distributions.
(4) The term "DISTRIBUTION DATE" shall mean the fifteenth day of
each month for principal distributions and the dates set forth in the
Prospectus for interest distributions.
(5) The term "INITIAL DATE OF DEPOSIT" shall mean the date of this
Reference Trust Agreement as set forth above.
(6) 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 of Financial
Condition in the Prospectus.
(7) Article I is hereby amended to add the following definitions:
"BOOK ENTRY POSITION" shall mean any position in Units of a Trust
which ownership is recorded on the books of the Trustee which notation
evidences ownership of an undivided fraction interest in a Trust in book
entry form.
"CERTIFICATE" shall mean any one of the Certificates manually executed
by the Trustee and the Depositor in substantially the following form with
the blanks appropriately filled in:
Certificate of
No. ____ Ownership Units _____
Description of Trust Plan of Distribution:
CUSIP __________________
This is to certify that ___________________________________ is the owner
and registered holder of this Certificate evidencing the ownership of
________________ units of undivided interest in the above-named Trust created
pursuant to the Trust Indenture and Agreement between Claymore Securities, Inc.,
and The Bank of New York (the "TRUSTEE"), a copy of which is available at the
office of the Trustee. This Certificate is issued under and is subject to the
terms, provisions and conditions of the Indenture to which the Holder of this
Certificate by virtue of the acceptance hereof assents and is bound, a summary
of which Indenture is contained in the Prospectus relating to the Trust. This
Certificate is transferable and interchangeable by the registered owner in
person or by his duly authorized attorney at the Trustee's office upon surrender
of this Certificate properly endorsed or accompanied by a written instrument of
transfer and any other documents that the Trustee may require for transfer, in
form satisfactory to the Trustee and payment of the fees and expense provided in
the Indenture.
In Witness Whereof, Claymore Securities, Inc. has caused this Certificate
to be executed in facsimile by its Chairman of the Board and The Bank of New
York, as Trustee, has caused this Certificate to be executed in facsimile in its
corporate name by an authorized officer.
Date:
Claymore Securities, Inc., Depositor
By
The Bank of New York, Trustee
By
FORM OF ASSIGNMENT
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
UNIF GIFT MIN ACT
TEN COM / / as tenants in common ___________ Custodian ___________
(Cust) (Minor)
TEN ENT / / as tenants by the entireties
JT TEN / / as joint tenants with right of Under Uniform Gifts to Minors Act
survivorship and not as
tenants in common ---------------------------------
State
Additional abbreviations may also be used though not in the above list.
For Value Received, ____________________________________ hereby sell,
assign and transfer ____________ Units represented by this Certificate unto
_________________________
Social Security or Other Identifying Number of
Assignee must be provided
___________________________________________________________________________
and does hereby irrevocably constitute and appoint ___________________________,
attorney, to transfer said Units on the books of the Trustee, with full power
and substitution in the premises.
Dated:
Notice: The signature to this assignment must correspond with the name as
written upon the face of the Certificate in every particular, without alteration
or enlargement or any change whatever.
Signature(s) Guaranteed by
Firm or Bank
Authorized Signature
Signatures must be guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or
such other guarantee program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee.
(8) The definition of "Supplemental Indenture" is hereby deleted in
its entirety.
(9) The definition of "Unitholder" is hereby amended as follows:
"UNITHOLDER" shall mean the registered holder of any Unit of
beneficial interest as recorded on the registration books of the Trustee,
or the registered holder of any Certificate, his legal representative and
heirs, or the successors of any corporation, partnership or other legal
entity which is a registered holder of any Certificate and as such shall be
deemed a beneficiary of the related Trust created by this Indenture to the
extent of his pro rata share thereof.
(10) Section 2.01 is hereby amended and replaced in its entirety as
follows:
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 under "The Trust Portfolio" in the
Prospectus 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 in said Prospectus 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 Bonds, such funds, to
the extent of the purchase price of failed Contract Securities for which no
Replacement Bonds were acquired pursuant to Section 3.17, plus all amounts
described in the next succeeding sentence, shall be credited to the
Principal Account and distributed pursuant to Section 3.06 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 failed Contract Security. Any
amounts remaining from moneys drawn on the Letter of Credit which are not
used to purchase Replacement Bonds 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.
(11) Section 2.03 is hereby amended and replaced in its entirety as
follows:
SECTION 2.03. ISSUE OF CERTIFICATES AND ESTABLISHMENT OF BOOK ENTRY
POSITIONS. By executing the Reference Trust Agreement and receipt for
deposited Securities, the Trustee will thereby acknowledge receipt of the
deposit of the Securities listed under "The Trust Portfolio" in the
Prospectus and referred to in Section 2.01 hereof, and simultaneously with
the receipt of said deposit, has recorded on its books, for each of the
plans of distribution provided for in the Prospectus, 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 Prospectus 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. 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.
Effective as of the Evaluation Time on September 23, 2004, in the
event that the aggregate value of Securities in the Trust has increased
since the evaluation immediately prior to the deposit of the Trust on
September 23, 2004, the Trustee shall issue such number of additional Units
to the Unitholder of outstanding Units immediately prior to the deposit of
the Trust on September 23, 2004, that the price per Unit computed as of the
Evaluation Time on September 23, 2004, including 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
immediately prior to the deposit of the Trust on September 23, 2004, 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 September 23, 2004,
including 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).
Upon the sale of Units to a purchaser, the Units will be evidenced by
a Book Entry Position unless, if so provided for in the Prospectus, such
purchaser expressly requests that the purchased Units be evidenced in
Certificate form. Upon sale of the Units to a purchaser who requests Units
in certificated form, the Trustee shall issue a Certificate or Certificates
in the name of the purchaser and note that such Unitholder holds units in
certificated form on the books of the Trustee. The Trustee is entitled to
specify the minimum denomination of any Certificate issued. The rights set
forth in this Indenture of any holder of Units held in certificated form
shall be the same as those of any other Unitholder.
(12) Section 2.05(a) is hereby amended and replaced in its entirety
as follows:
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 4.01 on the
Trade Date, the Depositor shall provide notice (the "SUBSCRIPTION NOTICE")
to the Trustee, by telephone or by written communication, of the
Depositor's intention to subscribe for Additional Units. The Subscription
Notice shall identify the Additional Securities to be acquired (unless such
Additional Securities are a precise replication of the then existing
portfolio) and shall either (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 or assign the Additional Units
created thereby, 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 value of the
Additional Securities to be purchased by the Trustee, as specified in the
Subscription Notice, together with, in each case, Cash as defined below.
"Cash" means, as to the Principal Account, cash or other property (other
than Securities) on hand in the Principal Account or receivable and to be
credited to the Principal Account as of the 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 Principal
Account as holders of Additional Units created by the deposit), and, as to
the Interest Account, interest 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 interest 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
interest received or receivable on any Security allocable (in accordance
with the Trustee's calculation of the monthly distribution from the
Interest Account pursuant to Section 3.06) to a distribution made or to be
made in respect of a Record Date occurring prior to the Trade Date. Each
deposit made pursuant to this Section 2.05 during the 90 days following the
initial date of deposit shall replicate, to the extent practicable, as
specified in subparagraph (b), the Original Proportionate Relationship, as
defined hereinabove. Each deposit made pursuant to this Section 2.05 after
the 90 days following the initial date of deposit made pursuant to Section
2.01 hereof (except for deposits made to replace failed Contract Securities
if such deposits occur within 20 days from the date of a failure occurring
within such initial 90 day period) shall maintain exactly the proportionate
relationship existing among the Securities as of the expiration of such 90
day period.
(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 assign in the name of or on the order of the
Depositor the number of Units verified by the Depositor with the Trustee.
(5) Any Additional Securities shall be held, administered and
applied by the Trustee in the same manner as herein provided for the
Securities.
(6) In the event the Depositor fails to take such action required
by paragraph (3) above, the Trustee shall, on the settlement date for such
subscription, settle the securities transactions specified in the
Subscription Notice.
(7) Neither the Trust nor Unitholders of the Trust will be
responsible for any loss resulting from the failure of the Depositor to
take such action required by paragraph (3) above.
(8) 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.
(13) The following Section 2.07 is hereby added to Article II:
SECTION 2.07. FORM OF CERTIFICATES. Each Certificate referred to in
Section 2.03 is, and each Certificate hereafter issued shall be, in
substantially the form hereinabove recited, numbered serially for
identification, in fully registered form, transferable only on the books of
the Trustee as herein provided, executed either manually or in facsimile by
an authorized officer of the Trustee and in facsimile by the Chairman of
the Board, President or one of the Vice Presidents of the Depositor and
dated the date of execution and delivery by the Trustee. In case any
authorized officer of the Trustee or the Depositor who has signed or whose
facsimile signature has been placed upon any Certificate shall have ceased
to be such officer before any such Certificate is issued, it may be issued
with the same effect as if he were such officer at the date of issue.
(14) Section 3.01 is hereby amended 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, at the discretion of the Depositor, the Trustee shall withdraw
from the Account or Accounts specified in the Prospectus or, if no Account
is therein specified, from the Principal Account as further set forth in
Section 3.04, 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 such period. If the
cash balance of the Principal 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. The reimbursement
provided for in this Section shall be for the account of the Unitholders of
record at the conclusion of the period described above. 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 cash or
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 or after six months, at the discretion of the
Depositor, 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 or
after six months, at the discretion of the Depositor, 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, printing of Certificates, 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.
(15) Section 3.06(b)(ii) is hereby amended as follows:
(ii) (a) For the purposes of this Section 3.06, the "Interest
Distribution" of a Unitholder shall be made on the basis of one-twelfth of
the estimated annual interest income to the Trust for the ensuing twelve
months, after a pro-rated initial payment and after deduction of the
estimated costs and expenses to be incurred on behalf of such Unitholders
during the twelve month period for which such interest income has been
estimated.
(b) In the event the amount on deposit in the Interest Account of
any Trust on a Distribution Date is not sufficient for the payment of the
amount of interest to be distributed monthly on the basis of the aforesaid
computation, the Trustee shall advance out of its own funds and cause to be
deposited in and credited to such Interest Account such amount as may be
required to permit payment of the monthly interest distribution to be made
as described above and shall be entitled to be reimbursed, without
interest, out of interest received by such Trust subsequent to the date of
such advance and subject to the condition that any such reimbursement shall
be made only under conditions which will not reduce the funds in or
available for the Interest Account to an amount less than required for the
next ensuing distribution of interest. The Trustee's fee takes into account
the costs attributable to the outlay of capital needed to make such
advances. To the extent practicable, the Trustee shall allocate the
expenses of each Trust among Units of such Trust, giving effect within any
Trust to differences in administrative and operational cost among those who
have chosen to receive a particular plan of distribution is provided for in
the Prospectus.
(c) Unitholders of any Trust desiring to receive according to a
particular plan of distribution provided for in the Prospectus may elect at
the time of purchase to receive distributions by notice to the Trustee.
Unitholders must furnish written notice to the Trustee indicating their
desire to receive such distributions. The Trustee, within five business
days of receiving such notice, shall issue to the Book Entry Unitholder a
new Book Entry Position confirmation indicating such Unitholder's preferred
distribution plan. Such notice shall be effective with respect to
subsequent distributions until changed by further notice to the Trustee.
Those wishing to change their plan of distribution, if multiple
distribution plans are provided for in the Prospectus, must do so by
sending written notice at any time to the Trustee; holders of Certificates
must also send to the Trustee the Certificate to which the requested change
relates. Changes may be made as soon as reasonably practicable.
(16) Section 3.08(a)(x) is hereby amended as follows:
(x) that as of any Record Date such Bonds are scheduled to be
redeemed and paid prior to the next succeeding monthly Distribution Date;
PROVIDED, HOWEVER, that as
the result of such sale the Trustee will receive funds in an amount
sufficient to enable the Trustee to include in the distribution from the
Principal Account on such next succeeding monthly Distribution Date at
least $0.01 per Unit; or
(17) Section 4.01(b) is hereby amended and replaced in its entirety
as follows:
(b) In making the evaluations the Evaluator may determine the value
of each issue of the Securities in each Trust by the following methods or
any combination thereof which it deems appropriate: (i) on the basis of
current bid or offering prices of such Securities as obtained from
investment dealers or brokers (including the Depositor) who customarily
deal in public bonds comparable to those held by the Trust, or (ii) if bid
or offering prices are not available for any of such Securities, on the
basis of bid or offering prices for comparable Securities, or (iii) by
appraisal. The Evaluator may utilize a securities pricing service to help
determine the value of each issue so long as such service uses a similar
methodology to determine securities prices. Securities prices for primary
market purchases shall be based upon institutional offering prices of said
Securities. Securities prices for redemptions shall be based on
institutional bid prices of said Securities. In addition to the methods of
determining the value of the Securities described above, the Evaluator may
make the initial evaluation of Securities in whole or in part by reference
to the Blue List of Current Municipal Offerings (a daily publication
containing the current public offering prices of public bonds of all grades
currently being offered by dealers and banks).
(18) 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 organizational
and offering 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."
(19) The first paragraph of Section 5.02 is hereby amended as
follows:
SECTION 5.02. REDEMPTIONS BY TRUSTEE; PURCHASES BY DEPOSITOR. Any Unit
tendered for redemption by a Unitholder or his duly authorized attorney to
the Trustee at its unit investment trust division office shall be redeemed
by the Trustee no later than the third calendar day following the day on
which tender for redemption is made in proper form, PROVIDED that if such
day of payment is not a Business Day, then such payment shall be made no
later than the first Business Day prior thereto (herein referred to as the
"SETTLEMENT DATE"). Unitholders must sign the request or transfer
instrument, exactly as their name appears on the tendered Certificate or on
the records of the Trustee. If the amount of redemption is $500 or less and
the proceeds are payable to the Unitholders of record at the address of
record, no signature guarantee is necessary for redemptions by individual
account owners (including joint owners). Additional documentation may be
requested, and a signature guarantee is always required, from corporations,
executors, administrators, trustees, guardians and associations. The
signatures 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. Subject payment by such Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption is to be
made by payment of cash equivalent to the Unit Value determined on the
basis of a Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee as of the Evaluation Time on the Redemption Date,
multiplied by the number of Units tendered for redemption (herein called
the "REDEMPTION VALUE"), or if the Unitholder wishes to redeem a number of
Units less than all those so tendered, multiplied by the number of Units so
designated by such Unitholder for redemption. Units received for redemption
by the Trustee on any day after the Evaluation Time will be held by the
Trustee until the next day on which the New York Stock Exchange is open for
trading and will be deemed to have been tendered on such day for redemption
at the Redemption Value computed on that day.
If applicable, 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.
(20) The heading and the first sentence of Section 5.04 are hereby
amended as
follows:
SECTION 5.04. UNITS HELD THROUGH THE DEPOSITORY TRUST COMPANY OR A
SUCCESSOR CLEARING AGENCY. With the exception of Units held in certificated
form, if applicable, no Unit may be registered in the name of any person
other than DTC or its nominee (or such other clearing agency registered as
such pursuant to Section 17A of the Exchange Act of 1934 designated as
successor to DTC by the Depositors, or the Trustee or the nominee thereof)
(DTC and any such successor clearing agency are herein referred to as the
"CLEARING AGENCY") unless the Clearing Agency advises the Trustee that it
is no longer willing or able properly to discharge its responsibilities
with respect to the Units and the Trustee is unable to locate a qualified
successor clearing agency, in which case the Trustee shall notify the
Clearing Agency and instruct it to provide the Trustee with the name and
address of all persons who are the beneficial owners of Units as registered
on the books of the Clearing Agency (the "OWNERS").
(21) Article V is hereby amended by adding the following sections:
SECTION 5.06. TRANSFER OF UNITS; INTERCHANGE OF CERTIFICATES. A
Unitholder may transfer any of his Units by making a written request to the
Trustee at its unit investment trust office and, in the case of Units
evidenced by a Certificate, if applicable, 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 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 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 for the purpose of this Section 5.06 shall be closed for an
individual Trust as such Trust 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 5.07. 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 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 9.02 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 5.07
shall constitute complete and indefeasible evidence of ownership in the
Trust, 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 5.07, 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 over issue.
(22) The second paragraph of Section 9.02 is hereby amended as
follows:
In the event of a termination, the Trustee shall proceed to liquidate
the Securities then held and make the payments and distributions provided
for hereinafter in this Section 9.02 based on such Unitholder's pro rata
interest in the balance of the Principal and Interest Accounts after the
deductions herein provided. Written notice shall be given by the Trustee in
connection with any termination to each Unitholder at his address appearing
on the registration books of the Trustee and in connection with a Mandatory
Termination Date such notice shall be given no later than 30 days before
the Mandatory Termination Date. For Unitholders holding units in
certificated form, written notice of any termination specifying the time or
times at which such Unitholders may surrender their Certificates for
cancellation shall be given to each such Unitholder.
(23) SubSection (d) of Section 9.02 is hereby amended as follows:
(d) make final distributions from such Trust, as follows:
(i) to each Unitholder receiving distribution in cash, upon
surrender for cancellation of his Certificate or Certificates, if
applicable, such holder's pro rata share of the cash balances of the
Interest and Principal Accounts; and
(ii) on the conditions set forth in Section 3.05 hereof, to all
Unitholders, upon surrender for cancellation of their respective
Certificate or Certificates, if applicable, their
pro rata share of the balance of the Reserve Account.
(24) Section 9.03 is amended by adding the following at the end of
the final paragraph:
If applicable, in the event that all of the Unitholders holding
Certificates of such Trust shall not surrender their Certificates for
cancellation within six months after the time specified in the
above-mentioned written notice, the Trustee shall give a second written
notice to such remaining Unitholders to surrender their written
Certificates for cancellation and receive the liquidation distribution with
respect thereto. If within one year after the second notice all the
Certificates of such Trust shall not have been surrendered for
cancellation, the Trustee may take steps, or may appoint an agent to take
appropriate steps, to contact such remaining Unitholders concerning
surrender of their Certificates and the cost thereof shall be paid out of
the moneys and other assets which remain in such Trust hereunder.
(25) The first sentence of the Introduction is hereby modified as
follows:
These Standard Terms and Conditions of Trust, effective February 6,
2002, shall be applicable to certain Claymore Securities Defined Portfolios
established after the date of effectiveness hereof containing certain debt
obligations, as provided in this paragraph.
(26) The definition of "Bonds" in Article I is hereby modified as
follows:
(3) "BONDS" shall mean such of the debt obligations, including
"when issued" and/or "regular way" contracts, if any, for the purchase of
certain bonds, and cash or a certified check or checks and/or an
irrevocable letter or letters of credit in the amount required for such
purchase, deposited in irrevocable trust and listed under "The Trust
Portfolio" in the Prospectus, and any obligations received in exchange,
substitution or replacement for such obligations pursuant to Sections 3.09
and 3.18 hereof, as may from time to time continue to be held as a part of
the Trust to which such Reference Trust Agreement relates.
(27) The first paragraph of Section 3.17 is hereby amended and
replaced with the following:
SECTION 3.17. REPLACEMENT BONDS. In the event that any Bond is not
delivered due to any occurrence, act or event beyond the control of the
Depositor and of the Trustee (such a Bond being herein called a "SPECIAL
BOND"), the Depositor may so certify to the Trustee and instruct the
Trustee to purchase Replacement Bonds which have been selected by the
Depositor having a cost and an aggregate principal amount not in excess of
the cost and aggregate principal amount of the Special Bonds not so
delivered. To be eligible for inclusion in the Trust, the Replacement Bonds
which the Depositor selects must: (i) for Trusts containing municipal
bonds, yield current interest which is exempt from taxation for federal
income tax purposes and, if the Trust is a State Trust, exempt from
taxation under the personal income tax law of the particular state
involved; (ii) have
a fixed maturity or disposition date comparable to the bonds replaced;
(iii) be purchased at a price that results in a yield to maturity and in a
current return, in each case as of the execution and delivery of the
applicable Reference Trust Agreement, which is approximately equivalent to
the yield maturity and current return of the Special Bonds which failed to
be delivered and for which the Replacement Bonds are substituted; (iv) be
purchased within twenty days after delivery of notice of the failed
contract to the Trustee or to the Depositor, whichever occurs first; (v)
for an uninsured trust, be rated in the category BBB or better or its
equivalent by at least one national rating organization and (vi) for an
insured trust, be rated in the category AAA or its equivalent by at least
one national rating organization. Any Replacement Bonds received by the
Trustee shall be deposited hereunder and shall be subject to the terms and
conditions of this Indenture to the same extent as other Bonds deposited
hereunder. No such deposit of Replacement Bonds shall be made after the
earlier of (i) 90 days after the date of execution and delivery of the
applicable Reference Trust Agreement or (ii) the first Distribution Date to
occur after the date of execution and delivery of the applicable Reference
Trust Agreement.
(28) Article III is hereby amended by adding the following Section
3.19:
SECTION 3.19. 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 3.06, against a
statement or statements therefore 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 3.06, 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
therefore 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 Interest and Principal Accounts as specified in
Section 3.06. 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 Interest and Principal Accounts shall be
insufficient to
provide for amounts payable pursuant to this Section 3.19, 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 3.19.
Any moneys payable to the Depositor pursuant to this Section 3.19
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.
(29) Section 7.05 is hereby amended in its entirety as follows:
SECTION 7.05. COMPENSATION. The Depositor shall receive at the times
set forth in Sections 3.06 and 3.18 as compensation for performing
portfolio supervisory services, 3.06 and 3.19 as compensation for
performing bookkeeping and administrative services and Sections 3.06 and
4.03 as compensation for performing evaluation services, such amount and
for such periods as specified in the Prospectus and/or Reference Trust
Agreement. The computation of such compensation for performing portfolio
supervisory services and bookkeeping and administrative 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. The
compensation for performing evaluation services shall be made on the basis
of the principal amount of Bonds in such Trust on a monthly basis. 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 3.06, 3.18 and 3.19 is found to be an improper charge
against the Trust, the Depositor shall reimburse the Trust in such amount.
An improper charge shall be established if a final judgment or order for
reimbursement of the Trust shall be rendered against the Depositor and such
judgment or order shall not be effectively stated 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.
The Depositor may employ agents in connection with its duties
referenced in Section 7.05 and shall not be answerable for the default or
misconduct of such agents if they shall have been selected with reasonable
care. The fees of such agents shall be reimbursable to the Depositor from
the Trust, PROVIDED, HOWEVER, that the amount of such reimbursement in any
year (i) shall reduce the amount payable to the Depositor for such
year with respect to the service in question and shall not exceed the
maximum amount payable to the Depositor for such service for such year and
(ii) if such agent is an affiliate of the Depositor, the amount of the
reimbursement, when combined with (a) all compensation received by such
agent form other series of the Trust or other unit investment trusts
sponsored by the Depositor or its affiliates and (b) the amount payable to
the Depositor from the Trust and from other series of the Trust or other
unit investment trusts sponsored by the Depositor or its affiliates in
respect of the service in question, shall not exceed the aggregate cost of
such agent and the Depositor of providing such service. The Trustee shall
pay such reimbursement against the Depositor's invoice therefore upon which
the Trustee may rely as the Depositor's certification that the amount
claimed complies with the provisions of this paragraph.
(30) 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.
(31) 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 costs basis of the Securities represented by the
Unitholder's Units.
(32) The first paragraph of Section 5.02 is hereby amended as
follows:
SECTION 5.02. REDEMPTIONS BY TRUSTEE; PURCHASES BY DEPOSITOR. Any Unit
tendered for redemption by a Unitholder or his duly authorized attorney to
the Trustee at its unit investment trust division office shall be redeemed
by the Trustee no later than the third calendar day following the day on
which tender for redemption is made in proper form, PROVIDED that if such
day of payment is not a Business Day, then such payment shall be made no
later than the first Business Day prior thereto (herein referred to as the
"SETTLEMENT DATE"). Unitholders must sign the request or transfer
instrument, exactly as their name appears on the tendered Certificate or on
the records of the Trustee. If the amount of redemption is $500 or less and
the proceeds are payable to the Unitholders of record at the address of
record, no signature guarantee is necessary for redemptions by individual
account owners (including joint owners). Additional documentation may be
requested, and a signature guarantee is always required, from corporations,
executors, administrators, trustees, guardians and associations. The
signatures 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. Subject payment by such Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption is to be
made by payment of cash equivalent to the Unit Value determined on the
basis of a Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee as of the Evaluation Time on the Redemption Date,
multiplied by the number of Units tendered for redemption (herein called
the "REDEMPTION VALUE"), or if the Unitholder wishes to redeem a number of
Units less than all those so tendered, multiplied by the number of Units so
designated by such Unitholder for redemption. Units received for redemption
by the Trustee on any day after the Evaluation Time will be held by the
Trustee until the next day on which the New York Stock Exchange is open for
trading and will be deemed to have been tendered on such day for redemption
at the Redemption Value computed on that day.
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
--------------------
Title: Senior Managing Director and
General Counsel
The Bank Of New York, Trustee
By /s/ Xxxxxx Xxxxxxxx
-------------------
Title: Vice President
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 186
(Note: Incorporated herein and made a part hereof is the "Trust Portfolio(s)" as
set forth in the Prospectus.)
