EXHIBIT 1.1
XXX XXXXXX UNIT TRUSTS,
TAXABLE INCOME SERIES 423
TRUST AGREEMENT
Dated: October 16, 2012
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The Bank of
New York Mellon, as Trustee, Standard & Poor's Securities Evaluations, Inc., as
Evaluator, and Invesco Investment Advisers LLC, as Supervisor, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust For Xxx Xxxxxx Focus
Portfolios, Effective for Unit Investment Trusts Investing Primarily in
Mortgage-Backed Securities of the Modified Pass-Through Type Established On and
After September 12, 2002 (Including Xxx Xxxxxx Focus Portfolios, Taxable Income
Series 6 and Certain Subsequent Series)" (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, Trustee, Evaluator and Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained in
the Standard Terms and Conditions of Trust are herein incorporated by reference
in their entirety and shall be deemed to be a part of this instrument as fully
and to the same extent as though said provisions had been set forth in full in
this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities listed in the Schedule hereto have been deposited in trust
under this Trust Agreement.
2. The fractional undivided interest in and ownership of the Trust
represented by each Unit thereof is a fractional amount, the numerator of which
is one and the denominator of which is the amount set forth under "Summary of
Essential Financial Information-General Information-Number of Units" in the
Prospectus for the Trust.
3. The aggregate number of Units described in Section 2.03(a) for the Trust
is that number of Units set forth under "Summary of Essential Financial
Information--General Information--Number of Units" in the Prospectus for the
Trust.
4. The term "First Settlement Date" shall mean the date set forth in footnote
4 under "Summary of Essential Financial Information" in the Prospectus for the
Trust.
5. The term "Monthly Distribution Date" shall mean the "Distribution Dates"
set forth under "Summary of Essential Financial Information--Interest
Distributions--Monthly Distributions" in the Prospectus for the Trust.
6. The term "Monthly Record Date" shall mean the "Record Dates" set forth
under "Summary of Essential Financial Information--Interest
Distributions--Monthly Distributions" in the Prospectus for the Trust.
7. The term "Evaluator" shall mean Standard & Poor's Securities Evaluations,
Inc. and its successors in interest or any successor evaluator appointed as
provided in the Standard Terms and Conditions of Trust.
8. The term "Supervisor" shall mean Invesco Investment Advisers LLC and its
successors in interest or any successor supervisor appointed as provided in the
Standard Terms and Conditions of Trust.
9. The term "Trustee" shall mean The Bank of New York Mellon and its
successors in interest or any successor trustee appointed as provided in the
Standard Terms and Conditions of Trust.
10. Notwithstanding any references to the term "Certificate" in the Standard
Terms and Conditions of Trust, all ownership of Units will be evidenced solely
in book-entry form, and will not be evidenced by certificates. Accordingly, the
definition and all references to the term "Certificate" in the Standard Terms
and Conditions of Trust, including but not limited to the form of "Certificate
of Ownership", Section 2.05 and Section 6.04 are hereby deleted in their
entirety to reflect Unit ownership solely in book-entry form.
11. Section 2.03(b) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety by the following:
"Units shall be held solely in uncertificated form evidenced by appropriate
notation in the registration books of the Trustee, and no Unitholder shall be
entitled to the issuance of a Certificate evidencing the Units owned by such
Unitholder. The only permitted registered holders of Units shall be through the
Depository Trust Company (or its nominee, Cede & Co.); consequently, individuals
must hold their Units through an entity which is a participant in Depository
Trust Company."
12. Section 3.01 is hereby amended by deleting the phrase "earlier of six
months after the Initial Date of Deposit or the" each of the six times it
appears in such Section 3.01.
13. Section 3.05 is hereby amended by adding the following sentence at the
end of the first paragraph of Section 3.05: "The Trustee may from time to time
reserve amounts in the Interest Account sufficient to cover accrued interest on
any Contract Securities."
14. Section 3.05 is amended by adding the following subsection immediately
after Section 3.05(e):
"(f) Notwithstanding any of the previous provisions, if a Trust has elected
to be taxed as a regulated investment company under the United States Internal
Revenue Code of 1986, as amended, the Trustee is directed to make any
distribution or take any action necessary in order to maintain the qualification
of the Trust as a regulated investment company for federal income tax purposes
or to provide funds to make any distribution for a taxable year in order to
avoid imposition of any income or excise taxes on the Trust or on undistributed
income in the Trust."
15. Section 3.07(a)(viii) of the Standard Terms and Conditions of Trust shall
be replaced in its entirety with the following:
"(viii) if the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, that such sale is necessary or advisable (i) to maintain the
qualification of the Trust as a regulated investment company or (ii) to provide
funds to make any distribution for a taxable year in order to avoid imposition
of any income or excise taxes on the Trust or on undistributed income in the
Trust."
16. The first two sentences in the second paragraph of Section 3.12 of the
Standard Terms and Conditions of Trust shall be replaced in their entirety with
the following:
"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 at the direction of the Depositor, vote
for or against, or accept or reject, any offer for new or exchanged securities
or property in exchange for a Trust Security. Should any issuance, exchange or
substitution be effected, 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. "
17. Section 3.13(a)(1) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"(1) The Replacement Securities shall be Securities as originally selected
for deposit in the Trust or securities which the Depositor determines to be
similar in character as Securities originally selected for deposit in the
Trust;"
18. The Standard Terms and Conditions of Trust shall be amended to include
the following section:
"Section 3.17. Regulated Investment Company Election. If the Prospectus for a
Trust states that such Trust intends to elect to be treated and to qualify as a
"regulated investment company" as defined in the United States Internal Revenue
Code of 1986, as amended, the Trustee is hereby directed to make such elections
and take all actions, including any appropriate election to be taxed as a
corporation, as shall be necessary to effect such qualification or to provide
funds to make any distribution for a taxable year in order to avoid imposition
of any income or excise tax on the Trust or on undistributed income in the
Trust. The Trustee shall make such reviews of each Trust portfolio as shall be
necessary to maintain qualification of a particular Trust as regulated
investment company and to avoid imposition of tax on a Trust or undistributed
income in a Trust, and the Depositor and Supervisor shall be authorized to rely
conclusively upon such reviews."
19. For purposes of Section 5.01 (a), "Business Day" shall mean any day the
New York Stock Exchange is open for business.
20. The Trustee's annual compensation as set forth under Section 7.04 shall
be that amount per $1,000 principal amount of securities as set forth under the
section entitled "Summary of Essential Financial Information - Expenses -
Trustee's Fee" in the Prospectus Part I for each Trust. In addition, the last
sentence of the first paragraph of Section 7.04 is hereby deleted.
21. Section 6.03 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety by the following:
"Section 6.03. Transfer or Interchange of Units. Units may be transferred by
the registered holder thereof by presentation and surrender of such Units at the
corporate trust office of the Trustee, properly endorsed or accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Trustee and executed by the Unitholder or his authorized attorney, whereupon new
Units will be issued in exchange and substitution therefore and Units
surrendered shall be cancelled by the Trustee. The registered holder of any Unit
may transfer such Unit by the presentation of transfer instructions to the
Trustee at the corporate trust office of the Trustee accompanied by such
documents as the Trustee deems necessary to evidence the authority of the person
making such transfer and executed by the registered holder or his authorized
attorney, whereupon the Trustee shall make proper notification of such transfer
on the registration books of the Trustee. A sum sufficient to pay any tax or
other governmental charge that may be imposed in connection with any such
transfer or interchange shall be paid by the Unitholder to the Trustee."
22. Section 9.01 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 9.01. Amendments. (a) This Indenture may be amended from time to
time by the Depositor and Trustee or their respective successors, without the
consent of any of the Unitholders, (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision contained herein, (ii) to make such other provision in
regard to matters or questions arising hereunder as shall not materially
adversely affect the interests of the Unitholders or (iii) to make such
amendments as may be necessary (a) for the Trust to continue to qualify as a
regulated investment company for federal income tax purposes if the Trust has
elected to be taxed as such under the United States Internal Revenue Code of
1986, as amended, or (b) to prevent the Trust from being deemed an association
taxable as a corporation for federal income tax purposes if the Trust has not
elected to be taxed as a regulated investment company under the United States
Internal Revenue Code of 1986, as amended. This Indenture may not be amended,
however, without the consent of all Unitholders then outstanding, so as (1) to
permit, except in accordance with the terms and conditions hereof, the
acquisition hereunder of any Bonds other than those specified in the Schedules
to the Trust Agreement or (2) to reduce the aforesaid percentage of Units the
holders of which are required to consent to certain of such amendments. This
Indenture may not be amended so as to reduce the interest in a Trust represented
by Units without the consent of all affected Unitholders.
(b) Except for the amendments, changes or modifications as provided in
Section 9.01(a) hereof, neither the parties hereto nor their respective
successors shall consent to any other amendment, change or modification of this
Indenture without the giving of notice and the obtaining of the approval or
consent of Unitholders representing at least 66 2/3% of the Units then
outstanding of the affected Trust. Nothing contained in this Section 9.01(b)
shall permit, or be construed as permitting, a reduction of the aggregate
percentage of Units the holders of which are required to consent to any
amendment, change or modification of this Indenture without the consent of the
Unitholders of all of the Units then outstanding of the affected Trust and in no
event may any amendment be made which would (1) alter the rights to the
Unitholders as against each other, (2) provide the Trustee with the power to
engage in business or investment activities other than as specifically provided
in this Indenture, (3) adversely affect the tax status of the Trust for federal
income tax purposes or result in the Units being deemed to be sold or exchanged
for federal income tax purposes or (4) unless the Trust has elected to be taxed
as a regulated investment company for federal income tax purposes, result in a
variation of the investment of Unitholders in the Trust.
(c) Unless the Depositor directs that other notice shall be provided, the
Trustee shall include in the annual report provided pursuant to Section 3.06
notification of the substance of such amendment."
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to be
executed; all as of the day, month and year first above written.
XXX XXXXXX FUNDS INC.
By /s/ XXXX X. XXXXXXX
--------------------------------------------
Vice President
INVESCO INVESTMENT ADVISERS LLC
By /s/ XXXX X. XXXXXXX
--------------------------------------------
Vice President and Executive Director
STANDARD & POOR'S SECURITIES EVALUATIONS, INC.
By /s/ XXXXX X. XXXXXXXX
--------------------------------------------
Senior Vice President
THE BANK OF NEW YORK MELLON
By /s/ XXXXX XXXXXXXXX
--------------------------------------------
Managing Director
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX UNIT TRUSTS, TAXABLE INCOME SERIES 423
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" Schedule as set forth in the Prospectus Part I for the Trust.]
