EXHIBIT 1.1
XXX XXXXXX UNIT TRUSTS,
TAXABLE INCOME SERIES 103
TRUST AGREEMENT
Dated: October 19, 2006
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The Bank of
New York, as Trustee, Standard & Poor's Securities Evaluations, Inc., as
Evaluator, and Xxx Xxxxxx Asset Management, 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 Insured Income Trust, Effective for Unit Investment Trusts
Established On and After May 24, 2001 (Including Xxx Xxxxxx Focus Portfolios
Insured Income Trust, Series 103 and 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 Bonds listed in the Schedules hereto have been deposited in trust
under this Trust Agreement.
2. The fractional undivided interest in and ownership of each 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 Part I for each Trust.
3. The aggregate number of Units described in Section 2.03(a) for each Trust
is that number of Units set forth under "Summary of Essential Financial
Information--General Information--Number of Units" in the Prospectus Part I for
each Trust.
4. The term "First Settlement Date" shall mean the date set forth in footnote
2 under "Summary of Essential Financial Information" in the Prospectus Part I
for each Trust.
5. The term "Monthly Distribution Date" shall mean the "Distribution Dates"
set forth under "Summary of Essential Financial Information--Estimated
Distributions--Monthly Distributions" in the Prospectus Part I for each Trust.
6. The term "Monthly Record Date" shall mean the "Record Dates" set forth
under "Summary of Essential Financial Information--Estimated
Distributions--Monthly Distributions" in the Prospectus Part I for each Trust.
7. The term "Semi-Annual Distribution Date" shall mean the "Distribution
Dates" set forth under "Summary of Essential Financial Information--Estimated
Distributions--Semi-Annual Distributions" in the Prospectus Part I for each
Trust.
8. The term "Semi-Annual Record Date" shall mean the "Record Dates" set forth
under "Summary of Essential Financial Information--Estimated
Distributions--Semi-Annual Distributions" in the Prospectus Part I for each
Trust.
9. The term "Insured Trust" shall mean a Trust which is comprised entirely of
Pre-Insured Bonds and/or Bonds as to which such Trust has obtained Portfolio
Insurance.
10. The term "Supervisor" shall mean Xxx Xxxxxx Asset Management and its
successors in interest or any successor supervisor appointed as provided in the
Standard Terms and Conditions of Trust.
11. The term "Uninsured Trust" shall mean any Trust other than an Insured
Trust.
12. Section 2.06 shall not apply to any Uninsured Trust.
13. Section 3.05 is amended by adding the following subsection immediately
after Section 3.05(f):
"(g) 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."
14. The following shall be added to Section 3.07 of the Standard Terms and
Conditions of Trust immediately following Section 3.07(h):
"(i) 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 (a) to maintain the qualification of the
Trust as a regulated investment company or (b) 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.
In the event a Security is sold pursuant to any provisions of this Section
3.07 as a direct result of serious adverse credit factors affecting the issuer
of such Security and 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, then the Depositor may, but is not obligated, to direct the
reinvestment of the proceeds of the sale of such Security in any other
securities which meet the criteria necessary for inclusion in such Trust on the
Initial Date of Deposit."
15. The words "long-term" in Section 3.14(a)(i) shall be deleted.
16. Neither Section 3.14(a)(iv) nor Section 3.14(c) shall apply to any
Uninsured Trust.
17. The paragraph immediately following Section 3.14(e) of the Standard Terms
and Conditions of Trust shall be replaced in its entirety with the following:
"Notwithstanding anything to the contrary in this Section 3.14, no
substitution of Replacement Bonds will be made if such substitution will
adversely affect the federal income tax status of the related Trust."
18. The Standard Terms and Conditions of Trust shall be amended to include
the following section:
"Section 3.18. 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. The Trustee's annual compensation as set forth under Section 7.04, for
each distribution plan shall be that amount set forth under the section entitled
"Summary of Essential Financial Information--Expenses--Trustee's Fee" in the
Prospectus Part I for each Trust.
20. 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 hereto 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
regarding matters or questions arising hereunder as shall not 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 Securities 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
(whether evidenced by Certificates or held in uncertificated form) without the
consent of all affected Unitholders.
(b) Except for the amendments, changes or modification 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 51% 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 or (3)
adversely affect the tax status of the Trust for federal income tax purposes.
(c) Promptly after the execution of any such amendment the Trustee shall
furnish written notification to all then outstanding Unitholders 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
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Executive Director
XXX XXXXXX ASSET MANAGEMENT
By /s/ XXXX X. XXXXXXX
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Executive Director
STANDARD & POOR'S SECURITIES EVALUATIONS, INC.
By /s/ Xxxxx X. Xxxxxx
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Vice President
THE BANK OF NEW YORK
By /s/ Xxxxxxx Xxxxxxx
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Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX UNIT TRUSTS, TAXABLE INCOME SERIES 103
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus Part I for each Trust.]
