THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 136
TRUST AGREEMENT
Dated: January 25, 1996
This Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank (National Association),
as Trustee and First Trust Advisors L.P., as Evaluator and
Portfolio Supervisor, sets forth certain provisions in full
and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust
for The First Trust Special Situations Trust, Series 22 and
certain subsequent Series, Effective November 20, 1991"
(herein called the "Standard Terms and Conditions of
Trust"), 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, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III 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 initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and
Conditions of Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 13,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof
shall be 1/13,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant
to Section 2.03 of the Standard Terms and Conditions of
Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
8.34% American Express Company, 24.91% Berkshire Hathaway,
Inc., 8.45% The Coca-Cola Company, 8.19% Disney (Xxxx) &
Company, 8.36% Federal Home Loan Mortgage Corporation,
8.36% Gannett Co., Inc., 8.36% Xxx Xxxxxxxx Xxxxxxx,
8.35% PNC Bank Corporation, 8.36% The Washington Post
Company, 8.32% Xxxxx Fargo & Company.
D. The Record Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
E. The Distribution Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
February 1, 2001.
G. The Evaluator's compensation as referred to in Section
4.03 of the Standard Terms and Conditions of Trust shall be
an annual fee of $0.0030 per Unit calculated on the largest
number of Units outstanding during each period in respect of
which a payment is made pursuant to Section 3.05, payable on
a Distribution Date.
H. The Trustee's Compensation Rate pursuant to Section
6.04 of the Standard Terms and Conditions of Trust shall be
an annual fee of $.0101 per Unit, calculated on the largest
number of Units outstanding during each period in respect of
which a payment is made pursuant to Section 3.05. However,
in no event, except as may be otherwise be provided in the
Standard Terms and Conditions of Trust, shall the Trustee
receive compensation in any one year from any Trust of less
than $2,000 for such annual compensation.
I. The Initial Date of Deposit for the Trust is January
25, 1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for
the redemption of Units shall be 100 shares.
PART III
A. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal
Account."
B. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the
following after the first word thereof:
"(i) the value of any Trust as shown by an evaluation by
the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value the
Equity of Securities deposited in such Trust, or (ii)"
C. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to
read as follows:
"On each Distribution Date the Trustee shall distribute to
each Unit holder of record at the close of business on the
Record Date immediately preceding such Distribution Date an
amount per Unit equal to such Unit holder's pro rata share
of the balance of the Principal Account (except for monies
on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I, provided, however, that with respect to
distributions other than the distribution occurring in the
month of December of each year, the Trustee shall not be
required to make a distribution from the Principal Account
unless the amount available for distribution shall equal
$1.00 per 1000 Units in the case of Units initially offered
at approximately $1.00 per Unit, or, $1.00 per 100 Units in
the case of Units initially offered at approximately $10.00
per Unit."
D. For purposes of this Trust, all references in the
Standard Terms and Conditions of Trust including provisions
thereof amended hereby to "$1.00 per Unit" shall be amended
to read "$10.00 per Unit" and all references to "per 1,000
Units" shall be amended to read "per 100 Units."
E. The first sentence in Section 4.03. of the Standard
Terms and Conditions of Trust is hereby amended to read in
its entirety as follows:
"As compensations for its services hereunder, the Evaluator
shall receive against a statement therefor submitted to the
Trustee on or before each Record Date (upon which the
Trustee may rely as the Evaluator's certification that the
amount stated does not exceed the cost incurred by the
Evaluator in providing services as described below), an
amount equal to the amount specified as compensation for the
Evaluator in the Trust Agreement provided, however, if at
any time the fee of the Trustee shall have been increased
pursuant to Section 6.04, the compensation of the Evaluator
hereunder shall at the same time be ratably increased."
F. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following new paragraph after
the second paragraph of such section:
"In lieu of a cash redemption, Unit holders tendering 2,500
Units or more for redemption may request from the Trustee by
written notice submitted at the time of tender an in kind
distribution of shares of Securities, to the extent of whole
shares. To the extent possible, in kind distributions of
Securities shall be made by the Trustee through the
distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker-dealer at
the Depository Trust Company. An in kind distribution will
be reduced by all expenses in connection with customary
transfer and registration charges. The tendering Unit
holder will receive his pro rata number of whole shares of
each of the Securities comprising the portfolio and cash
from the Principal Account equal to the fractional shares to
which the tendering Unit holder is entitled. The Trustee
may, but shall not be required to, adjust the number of
shares of any issue of Securities included in a Unit
holder's in kind distribution to facilitate the distribution
of whole shares, such adjustment to be made on the basis of
the value of Securities on the date of tender. If funds in
the Principal Account are insufficient to cover the required
cash distribution to the tendering Unit holder, the Trustee
may sell Securities in the manner described in this Section
5.02."
G. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended to delete the reference to "100,000
Units" and substitute "2,500 Units" in the third sentence of
the second paragraph thereof.
H. The first paragraph of Section 3.05.II(a) of the
Standard Terms and Conditions of Trust is hereby amended to
read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Principal
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that with
respect to distributions other than the distribution
occurring in the month of December of each year, the Trustee
shall not be required to make a distribution from the
Principal Account unless the amount available for
distribution shall equal $1.00 per 100 Units."
I. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as
follows:
"(b) For purposes of this Section 3.05, the Unit holder's
Income Distribution shall be equal to such Unit holder's pro
rata share of the cash balance in the Income Account
computed as of the close of business on the Record Date
immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
J. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with
the following language:
"Section 3.11 Notice to Depositor. In the event that the
Trustee shall have been notified at any time of any action
to be taken or proposed to be taken by at least a legally
required number of holders of the equity securities (the
"Equity Securities") (including but not limited to the
making of any demand, direction, request, giving of any
notice, consent or waiver or the voting with respect to any
amendment or supplement to any indenture, resolution,
agreement or other instrument under or pursuant to which the
Contract Obligations, if any, have been issued) the Trustee
shall promptly notify the Depositor and shall thereupon take
such action or refrain from taking any action as the
Depositor shall in writing direct; provided, however, that
if the Depositor shall not within five Business Days of the
giving of such notice to the Depositor direct the Trustee to
take or refrain from taking any action, the Trustee shall
take such action as it, in its sole discretion, shall deem
advisable.
In the event that the Trustee shall have been notified at
any time of any action to be taken or proposed to be taken
by at least a legally required number of holders of any
Equity Securities deposited in a Trust, the Trustee shall
take such action or omit from taking any action, as
appropriate, so as to insure that the Equity Securities are
voted as closely as possible in the same manner and the same
general proportion as are the Equity Securities held by
owners other than the Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
exchange or substitution be effected notwithstanding such
rejection or without an initial offer, any Securities, cash
and/or property received in exchange shall be deposited
hereunder and shall be promptly sold, if securities or
property, by the Trustee pursuant to the Depositor's
direction, unless the Depositor advises the Trustee to keep
such securities or property. The Depositor may rely on the
Portfolio Supervisor in so advising the Trustee. The cash
received in such exchange and cash proceeds of any such
sales shall be distributed to Unit holders on the next
distribution date in the manner set forth in Section 3.05
regarding distributions from the Principal Account. The
Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be liable to any
person for any action or failure to take action pursuant to
the terms of this Section 3.11 other than failure to notify
the Depositor.
Whenever new securities or property is received and retained
by the Trust pursuant to this Section 3.11, the Trustee
shall, within 5 days thereafter, mail to all Unit holders of
the Trust notices of such acquisition unless legal counsel
for the Trust determines that such notice is not required by
The Investment Company Act of 1940, as amended."
K. Section 1.01(4) shall be amended to read as follows:
"(4)"Portfolio Supervisor" shall mean First Trust Advisors
L.P. and its successors in interest, or any successor
portfolio supervisor appointed as hereinafter provided."
L. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the
following subsection:
"Section 3.05.I.(e) deduct from the Interest Account or, to
the extent funds are not available in such Account, from the
Principal Account and pay to the Depositor the amount that
it is entitled to receive pursuant to Section 3.14.
M. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following
paragraphs which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses. 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 Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount which shall not exceed $0.0010 times the number
of Units outstanding as of January 1 of such year except for
a year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Depositor
provides service during less than the whole of such year),
but in no event shall such compensation when combined with
all compensation received from other unit investment trusts
for which the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services in
any calendar year exceed the aggregate cost to the Depositor
providing 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, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Interest and Principal Accounts on or
before the Distribution Date following the Monthly Record
Date on which such period terminates. The Trustee shall
have no liability to any Certificateholder 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 3.14, the Trustee shall have the
power to sell (i) Bonds from the current list of Bonds
designated to be sold pursuant to Section 5.02 hereof, or
(ii) if no such Bonds have been so designated, such Bonds 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 3.14.
Any moneys payable to the Depositor pursuant to this Section
3.16 shall be secured by a prior lien on the Trust Fund
except that no such lien shall be prior to any lien in favor
of the Trustee under the provisions of Section 6.04 herein.
N. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P. and
its successors in interest, or any successor evaluator
appointed as hereinafter provided."
O. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. The expenses incurred in
establishing a Trust, including the cost of the preparation
and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture and
other documents relating to the Trust, printing of
Certificates, Securities and Exchange Commission and state
blue sky registration fees, the costs of the initial
valuation of the portfolio and audit of the Trust, the
initial fees and expenses of the Trustee, and legal and
other out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses, to the
extent not borne by the Depositor, shall be borne by the
Trust. To the extent the funds in the Income and Principal
Accounts of the Trust shall be insufficient to pay the
expenses borne by the Trust specified in this Section 3.01,
the Trustee shall advance out of its own funds and cause to
be deposited and credited to the Income Account such amount
as may be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each Record
Date from funds on hand in the Income Account or, to the
extent funds are not available in such Account, from the
Principal Account, in the amount deemed to have accrued as
of such Record Date as provided in the following sentence
(less prior payments on account of such advances, if any),
and the provisions of Section 6.04 with respect to the
reimbursement of disbursements for Trust expenses,
including, without limitation, the lien in favor of the
Trustee therefor and the authority to sell Securities as
needed to fund such reimbursement, shall apply to the
payment of expenses and the amounts advanced pursuant to
this Section. For the purposes of the preceding sentence
and the addition provided in clause (4) of the first
sentence of Section 5.01, the expenses borne by the Trust
pursuant to this Section shall be deemed to have been paid
on the date of the Trust Agreement and to accrue at a daily
rate over the time period specified for their amortization
provided in the Prospectus; provided, however, that nothing
herein shall be deemed to prevent, and the Trustee shall be
entitled to, full reimbursement for any advances made
pursuant to this Section no later than the termination of
the Trust. For purposes of calculating the accrual of
organizational expenses under this Section 3.01, the Trustee
shall rely on the written estimates of such expenses
provided by the Depositor pursuant to Section 5.01."
P. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by adding the following at the
conclusion thereof: ", plus (4) amounts representing
organizational expenses paid from the Trust less amounts
representing accrued organizational expenses of the Trust,
plus (5) all other assets of the Trust"
(ii) The following shall be added at the end of the first
paragraph of Section 5.01:
Until the Depositor has informed the Trustee that there will
be no further deposits of Additional Securities pursuant to
section 2.01(b), the Depositor shall provide the Trustee
with written estimates of (i) the total organizational
expenses to be borne by the Trust pursuant to Section 3.01
and (ii) the total number of Units to be issued in
connection with the initial deposit and all anticipated
deposits of additional Securities. For purposes of
calculating the Trust Fund Evaluation and Unit Value, the
Trustee shall treat all such anticipated expenses as having
been paid and all liabilities therefor as having been
incurred, and all Units as having been issued, in each case
on the date of the Trust Agreement, and, in connection with
each such calculation, shall take into account a pro rata
portion of such expense and liability based on the actual
number of Units issued as of the date of such calculation.
In the event the Trustee is informed by the Depositor of a
revision in its estimate of total expenses or total Units
and upon the conclusion of the deposit of additional
Securities, the Trustee shall base calculations made
thereafter on such revised estimates or actual expenses,
respectively, but such adjustment shall not affect
calculations made prior thereto and no adjustment shall be
made in respect thereof.
Q. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not exceed
$0.0035 per Unit outstanding as of January 1 of such year
except for a Trust during the year or years in which an
initial offering period as determined in Section 4.01 of
this Indenture occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such
month (such annual fee to be pro rated for any calendar year
in which the Portfolio Supervisor provides services during
less than the whole of such year), but in no event shall
such compensation when combined with all compensation
received from other series of the Trust for providing such
supervisory services in any calendar year exceed the
aggregate cost to the Portfolio Supervisor for the cost of
providing such services."
R. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank
(National Association), or any successor trustee appointed
as hereinafter provided."
All references to United States Trust Company of new York in
the Standard Terms and Conditions of Trust shall be amended
to refer to The Chase Manhattan Bank (National Association).
S. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the prospectus
related to the Trust specifies a deferred sales charge, the
Trustee shall, on the dates specified in and as permitted by
such Prospectus, withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to the Depositor (the "Deferred Sales Charge
Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. If a Unit
holder redeems Units prior to full payment of the deferred
sales charge, the Trustee shall, if so provided in the
related Prospectus, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02 less the unpaid portion of the
deferred sales charge. All advances made by the Trustee
pursuant to this Section shall be secured by a lien on the
Trust prior to the interest of the Unit holders."
T. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence
after the first sentence of such section:
"The number of Units may be increased through a split of the
Units or decreased through a reverse split thereof, as
directed in writing by the Depositor, at any time when the
Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank (National Association) and First Trust
Advisors L.P. have each caused this Trust Agreement to be
executed and the respective corporate seal to be hereto
affixed and attested (if applicable) by authorized officers;
all as of the day, month and year first above written.
NIKE SECURITIES L.P., Depositor
By Xxxxxx X. Xxxxx
Senior Vice President
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), Trustee
(SEAL) By Xxxxxx Xxxxxxxx
Vice President
Attest:
Xxxxxxx X. Xxxxxxx
Second Vice President
FIRST TRUST ADVISORS L.P., Evaluator
By Xxxxxx X. Xxxxx
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Xxxxxx X. Xxxxx
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 136
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set
forth in the Prospectus.)
