Exhibit 1.1(b)
Nuveen Unit Trusts, Series 40
Trust Indenture and Agreement
Dated: April 15, 1999
This Trust Indenture and Agreement by and between Xxxx Nuveen & Co.
Incorporated, as Depositor and The Chase Manhattan Bank, 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 Nuveen Unit Trust,
Series 4 and certain subsequent Series, effective May 29, 1997" (herein called
the "Standard Terms and Conditions of Trust"), and such provisions as 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 promises and of the mutual agreements herein
contained, the Depositor and the Trustee, agree as follows:
Part I
Standard Terms and Conditions of Trust
Subject to the Provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
Part II
Special Terms and Conditions of Trust
The following special terms and conditions are hereby agreed to:
(a) The Securities defined in Section 1.01(1) listed in Schedule A
hereto have been deposited in trust under this Trust Indenture and
Agreement.
(b) The fractional undivided interest in and ownership of the Trust
Fund represented by each Unit for the Trust on the Initial Date of Deposit
is 1/(the number of Units) set forth under the caption "Statement of
Condition--Interest of Unitholders: Units of fractional undivided interest
outstanding" in the Prospectus.
(c) The number of Units created of the Trust are set forth under the
caption "Statement of Condition--Interest of Unitholders: Units of
fractional undivided interest outstanding" in the Prospectus for the
Trust.
(d) Section 10.02 shall be amended to read in its entirety as
follows:
Section 10.02. Initial Costs. Subject to reimbursement as hereinafter
provided, the cost of organizing the Trust and the 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. At the earlier of six months after the
Initial Date of Deposit or the conclusion of the primary offering period (as
certified by the Depositor to the Trustee), the Trustee shall withdraw from the
Account or Accounts specified in the Prospectus or, if no Account is therein
specified, from the Capital Account, and pay to the Depositor the Depositor's
reimbursable expenses of organizing the Trust in an amount certified to the
Trustee by the Depositor. In no event shall the amount paid by the Trustee to
the Depositor for the Depositor's reimbursable expenses of organizing the Trust
exceed the estimated per Unit amount of organization costs set forth in the
prospectus for the Trust multiplied by the number of Units of the Trust
outstanding at the earlier of six months after the Initial Date of Deposit or
the end of the initial offering period; nor shall the Depositor be entitled to
or request reimbursement for expenses of organizing the Trust incurred after the
earlier of six months after the Initial Date of Deposit or the end of the
initial offering period. If the cash balance of the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as directed by the
Depositor, sell Securities identified by the 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. The reimbursement provided for in this section
shall be for the account of the Unit holders of record at the earlier of six
months after the Initial Date of Deposit or the conclusion of the primary
offering period. Any assets deposited with the Trustee in respect of the
expenses reimbursable under this Section 10.02 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 Condition of the Trust
included in the Prospectus not later than the 10 calendar days following the
Initial Date of Deposit or deposit of additional Securities, as applicable 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
10.02 shall be held by the Trustee, without interest, and reserved for such
purpose and accordingly, prior to the earlier of six months after the Initial
Date of Deposit or 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 Unit holder redeems Units prior to the earlier of six months
after the Initial Date of Deposit or the conclusion of the primary offering
period, the Trustee shall pay to the Unit holder, in addition to the Redemption
Value of the tendered Units, unless otherwise directed by the Depositor, an
amount equal to the estimated per Unit cost of organizing the Trust set forth in
the Prospectus, or such lower revision thereof most recently communicated to the
Trustee by the Depositor pursuant to Section 5.01, 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 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, SEC 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.
(e) Article I of the Standard Terms and conditions of Trust is hereby
amended to replace the definitions of "Capital Distribution Date,"
"Contract Securities," "Initial Date of Deposit," "Mandatory Termination
Date," "Record Date," "Securities," and "Unit" and to add the following
definitions:
Mid-term Rollover Unitholder
The meaning assigned to it in the Prospectus for a Trust.
Final Rollover Unitholder
The meaning assigned to it in the Prospectus for a Trust.
Capital Distribution Date
The meaning assigned to it in the Prospectus for a Trust.
Mandatory Termination Date
The meaning assigned to it in the Prospectus for a Trust.
Contract Securities
The Securities which are to be acquired by any Trust Fund
pursuant to a contract or contracts for the purchase of such
securities which have been assigned to the Trustee along with the
amounts required for their purchase which have been delivered to the
Trustee.
Evaluator
The party designated in the Prospectus for a Trust or any party
appointed by the Sponsor.
Initial Date of Deposit
The meaning assigned to it in the Prospectus of each respective
Trust Fund.
Prospectus
The prospectus relating to a Trust in the form first used to
confirm sales of Units.
Record Date
As applicable, the meaning assigned in "Income Record Date"
and/or "Capital Record Date" in the Prospectus for each respective
Trust Fund.
Securities
The securities, including Contract Securities listed in Schedule
A to the Trust Agreement or other securities that may be deposited in
the Trust Fund and any obligations received in exchange or
substitution for such securities, as may from time to time continue to
be held as a part of any Trust Fund.
Unit
The fractional undivided interest in and ownership of an
individual Trust Fund equal initially to 1/(the number of Units of
fractional undivided interest outstanding) provided in the Statement
of Condition in the Prospectus for the Trust Fund, the denominator of
which fraction shall be (1) increased by the number of any additional
Units issued pursuant to Section 2.03 hereof and (2) decreased by the
number of any such Units redeemed as provided in Section 5.02.
Whenever reference is made herein to the "interest" of a Unitholder in
the Trust Fund or in the Income or Capital Accounts, it shall mean
such fractional undivided interest represented by the number of Units,
whether or not evidenced by a Certificate or Certificates, held of
record by such Unitholder in such Trust Fund.
(f) Article I of the Standard Terms and Conditions of Trust is hereby
amended to replace the definitions of "Rollover Notification Date" and
"Special Redemption and Liquidation Period" with the following:
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Ex.1.1(b)
Rollover Notification Date
The dates specified in the Prospectus for the "Mid-term Rollover
Notification Date" and the "Final Rollover Notification Date" in
"Rollover Trusts" shall also apply individually to the term
"Rollover Notification Date" provided herein. In addition, any
reference to the "Rollover Notification Date" as it relates
exclusively to "Mid-term Rollover Unitholders" shall be interpreted to
apply only to such Unitholders and any reference to the "Rollover
Notification Date" as it relates exclusively to "Final Rollover
Unitholders" shall be interpreted to apply only to such Unitholders.
Special Redemption and Liquidation Period
The dates specified in the Prospectus for the "Mid-term Special
Redemption and Liquidation Period" and the "Final Special Redemption
and Liquidation Period" in "Rollover Trusts" shall also apply
individually to the term "Special Redemption and Liquidation Period"
provided herein. In addition, any reference to the "Special Redemption
and Liquidation Period" as it relates to exclusively to "Mid-term
Rollover Unitholders" shall be interpreted to apply only to such
Unitholders and any reference to the "Special Redemption and
Liquidation Period" as it relates exclusively to "Final Rollover
Unitholders" shall be interpreted to apply only to such Unitholders.
(g) The following shall be added at the end of the first
paragraph of subsection (a) of Section 5.03:
"The notice and form of election to be sent to Unitholders in respect
of any redemption and purchase of Units of a New Series as provided in this
section shall be in such form and shall be sent at such time or times as
the Depositor shall direct the Trustee in writing and the Trustee shall
have no responsibility therefor. The Distribution Agent acts solely as
disbursing agent in connection with purchases of Units pursuant to this
Section and nothing herein shall be deemed to constitute the Distribution
Agent a broker in such transactions."
(h) Article III of the Standard Terms and Conditions of Trust is
hereby amended to add the following section:
Section 3.14. License Fees. If so provided in the Prospectus for
the Nuveen-Standard & Poor's Quality Buyback Portfolio (the "Quality
Buyback Trust") and pursuant to a Licensing Agreement between Standard &
Poor's Corporation ("S&P") and the Depositor (the "S&P Agreement"), as
consideration for the licenses granted by S&P for the right to use its
trademarks and trade names and for the use of databases and research owned
by S&P, the Quality Buyback Trust will pay a fee set forth in the Agreement
to S&P or the Depositor to reimburse the Depositor for payment of the
expenses.
If the S&P Agreement provides for an annual license fee computed
in whole or part by reference to the average daily net asset value of the
Quality Buyback 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 Quality Buyback 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 Quality
Buyback Trust assets as of such last business day, and (iii) during each
subsequent calendar quarter, by reference to the net asset value of the
Quality Buyback 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 S&P Agreement, but such adjustment shall not
affect calculations made prior thereto and no adjustment shall be made in
respect thereof.
(i) The following subsection (d) shall be added to Section 7.02:
(d) The Depositor may employ agents in connection with its duties
under Section 3.11 and 3.13 hereof 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 Fund, 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 from other series of the Fund or other unit
investment trusts sponsored by the Depositor or its affiliates and (b) the
amount payable to the Depositor from the Trust Fund and from other series
of the Fund 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
therefor upon which the Trustee may rely as the Depositor's certification
that the amount claimed complies with the provisions of this paragraph.
(j) Section 4.01 shall be amended to read in its entirety as
follows:
Section 4.01. Evaluation of Securities. The Evaluator shall
determine separately and promptly furnish to the Trustee and the Depositor
upon request the value of each issue of Securities as of the Evaluation
Time as provided in the following manner:
(a) The Evaluator will prepare each evaluation for which market
quotations for the Securities are available by the use of outside services
normally used and contracted with for this purpose. If the Securities are listed
on a national securities exchange or The NASDAQ Stock Market, Inc. the
evaluation will be based on the closing sale price on the exchange or system (if
a Security is listed on the New York Stock Exchange, the closing sale price on
that exchange shall apply) or, if there is no closing sale price on the exchange
or system, at the closing bid price on the exchange or system. If such market
quotations are not available, the Evaluator shall determine the value of the
Securities. Such evaluation shall generally be based on the current bid prices
on the over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If such prices are not available on
the over-the-counter market, the evaluation will generally be made by the
Evaluator in good faith (1) on the basis of the current bid prices for
comparable securities, (2) by the Evaluator's appraising the value of the
Securities in good faith at the bid side of the market or (3) by any combination
thereof. For each evaluation, the Evaluator shall also determine and furnish to
the Trustee and the Depositor the aggregate of (a) the value of all Securities
on the basis of such evaluation and (b) on the basis of the information
furnished to the Evaluator by the Trustee pursuant to Section 3.02, the amount
of cash then held in the Capital Account which was received by the Trustee after
the Record Date preceding such determination less any amounts held in the
Capital Account for distribution to Unitholders on a subsequent Distribution
Date when a Record Date occurs four business days or less after such
determination. For the purposes of the foregoing, the Evaluator may obtain
current prices for the Securities from investment dealers or brokers (including
the Depositor) that customarily deal in similar securities.
With respect to any Security not listed on a national exchange or The
NASDAQ Stock Market, Inc. or, with respect to a Security so listed but the
Evaluator deems the closing sale price on the relevant exchange to be
inappropriate as a basis for valuation, upon the Evaluator's request, the
Depositor shall, from time to time, designate one or more evaluation services or
other sources of information on which the Evaluator shall be authorized
conclusively to rely in evaluating such Security, and the Evaluator shall have
no liability for any errors in the information so received. The cost thereof
shall be an expense reimbursable to the Evaluator from the Income and Capital
Accounts.
(b) Notwithstanding Section 4.01(a), except in those cases in
which the Securities are listed on a national securities exchange or The NASDAQ
Stock Market, Inc. and the closing sales prices are used and except for Trust
Fund Evaluations required by Section 5.02 in determining Redemption Price,
during the initial offering period, the evaluations of the Securities shall
generally be made in the manner described in Section 4.01(a) based on the
closing ask prices of the Securities rather than the closing bid prices.
(k) Section 5.01 shall be amended to read in its entirety as
follows:
Section 5.01. Trust Fund Evaluation. As of the Evaluation Time
next following any tender by a Unitholder for redemption and on any other
business day desired by it or as may be required hereunder, the Trustee
shall as to each Trust Fund:
Add
(1) cash on hand in the Trust Fund (other than cash held
especially for the purchase of Contract Securities) and moneys in the
process of being collected from declared dividends,
(2) the aggregate value of each issue of the Securities in the
Trust Fund (including Contract Securities) as determined by the Evaluator
pursuant to Section 4.01, and
(3) all other assets of the Trust;
Deduct
(1) amounts representing any applicable taxes, governmental
charges or other charges pursuant to Section 3.03 payable out of the Trust
Fund and for which no deductions shall have previously been made for the
purpose of addition to the Reserve Account,
(2) amounts representing estimated accrued fees and expenses of
the Trust Fund including but not limited to unpaid fees and expenses of the
Trustee (including legal and auditing expenses), the Evaluator, the
Depositor and counsel, and
(3) amounts representing unpaid accrued organization costs, and
(4) cash allocated for distribution to Unitholders of the Trust
Fund of record as of the business day prior to the evaluation then being
made.
The resulting figure is herein called a "Trust Fund Evaluation."
Prior to the payment to the Depositor of its reimbursable organization
costs to be made at the earlier of six months after the Initial Date of
Deposit or the conclusion of the primary offering period in accordance with
Section 10.02, for purposes of determining the Trust Fund Evaluation under
this Section 5.01, the Trustee shall rely upon the amounts representing
unpaid accrued organization costs in the estimated amount per Unit set
forth in the Prospectus until such time as the Depositor notifies the
Trustee in writing of a revised estimated amount per Unit representing
unpaid accrued organization costs. Upon receipt of such notice, the Trustee
shall use this revised estimated amount per Unit representing unpaid
accrued organization costs in determining the Trust Fund Evaluation but
such revision of the estimated expenses shall not affect calculations made
prior thereto and no adjustment shall be made in respect thereof.
(l) Notwithstanding anything to the contrary contained in
Sections 3.04, 3.11, 3.13, 4.03 and 8.05, expenses of each Trust shall be paid
to the appropriate party on or about the 15th day of each month. Until the
Trustee is notified by the Depositor that the primary offering period has
terminated, the fees, where applicable, shall be accrued daily and based on the
number of Units outstanding on each day.
After the primary offering period has terminated, the fees, where applicable,
shall be based on the number of Units outstanding on the most recent prior
Record Date specified in the Prospectus.
(m) Section 8.01(i) shall be amended to read in its entirety as
follows:
(i) Notwithstanding any provisions of this Agreement to the
contrary, no payment to a Depositor or to any principal underwriter (as defined
in the Investment Company Act of 1940) for the Trust Fund or to any affiliated
person (as so defined) or agent of a Depositor or such underwriter shall be
allowed the Trustee as an expense except for payment of such reasonable amounts
as the Securities and Exchange Commission may prescribe as compensation for
performing bookkeeping and other administrative services of a character normally
performed by the Trustee.
(n) The following replaces the first two sentences of Section
8:05:
The Trustee shall receive at the times and in the manner set
forth in Section 3.04 as compensation for performing the usual, ordinary, normal
and recurring services under this Agreement during the preceding month an amount
equal to the amount specified as compensation for the Trustee in the Prospectus.
Such fee shall accrue daily and be computed on the basis of the largest number
of Units outstanding during the period with respect to which such compensation
is paid.
(o) All references to the "NASDAQ National Market System" herein
and in the Standard Terms and Conditions of Trust are replaced with "The NASDAQ
Stock Market, Inc."
(p) The following shall replace the second paragraph of Section
5.03 in its entirety:
All Units so tendered by a Unitholder (a "Rollover Unitholder")
shall be redeemed and cancelled during the Special Redemption and Liquidation
Period. Subject to payment by such Rollover Unitholder of any tax or other
governmental charges which may be imposed thereon, such redemption is to be made
in kind pursuant to Section 5.02 by distribution of cash and/or Securities to
the Distribution Agent based on the net asset value on the date the Units are
redeemed and cancelled multiplied by the number of Units being redeemed (herein
called the "Rollover Distribution").
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In Witness Whereof, Xxxx Nuveen & Co. Incorporated, has caused this
Trust Indenture and Agreement for Nuveen Unit Trusts, Series 40 to be executed
by its President, one of its Vice Presidents or one of its Assistant Vice
Presidents and its corporate seal to be hereto affixed and attested by its
Secretary or its Assistant Secretary and The Chase Manhattan Bank has caused
this Trust Indenture and Agreement to be executed by one of its Vice Presidents
or Second Vice Presidents and its corporate seal to be hereto affixed and
attested to by one of its Assistant Treasurers; all as of the day, month and
year first above written.
Xxxx Nuveen & Co. Incorporated,
Depositor
By /s/ Xxxxxx X. Xxxxx
----------------------------
Authorized Officer
(Seal)
Attest:
By /s/ Xxxxx X. Xxxxx
-------------------------
Assistant Secretary
The Chase Manhattan Bank, Trustee
By /s/ Xxxxxx Xxxxxx
----------------------------
Assistant Vice President
(Seal)
Attest:
By /s/ Xxxxxx X. Xxxx
--------------------------
Assistant Treasurer
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Schedule A to the Trust Indenture and Agreement
Securities Initially Deposited
in
Nuveen Unit Trusts, SERIES 40
(Note: Incorporated herein and made a part hereof is the "Schedule of
Investments" as set forth for the Trust in the Prospectus.)
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