FT 3397
TRUST AGREEMENT
Dated: March 30, 2012
The Trust Agreement among First Trust Portfolios L.P., as
Depositor, The Bank of New York Mellon, as Trustee, First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, and FTP
Services LLC, as FTPS Unit Servicing Agent, sets forth certain
provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust
for FT 785 and certain subsequent Series, Effective December 9,
2003" (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, the Portfolio Supervisor and the FTPS Unit Servicing
Agent 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
DOW(R) TARGET 10 APR. '12 - TERM 5/9/13
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. The aggregate number of Units outstanding for the Trust
on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
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 Record Date shall be as set forth in the Prospectus
under "Summary of Essential Information." The Trustee is
authorized to make the payments specified in Part I of Section
3.05 on the last Business Day of each month.
D. The Distribution Date shall be the 25th day of the
month in which the related Record Date occurs.
E. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
F. First Trust Advisors L.P.'s compensation as referred to
in Section 4.03 of the Standard Terms and Conditions of Trust and
FTP Services LLC's compensation as referred to in Section 3.16 of
the Standard Terms and Conditions of Trust shall collectively be
an annual fee in the amount of $.0060 per Unit.
G. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may 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. The Bank of New York
Mellon, or any of its affiliates, may perform services in any
capacity for any exchange traded fund, investment company,
investment trust or other entity whose shares are held as an
asset of the Trust, and The Bank of New York Mellon, as Trustee,
shall be entitled to receive the foregoing compensation, without
reduction, notwithstanding that The Bank of New York Mellon or an
affiliate is receiving compensation for services to such exchange
traded fund, investment company, investment trust or other
entity. Without limiting the scope of the expenses for which the
Trustee is entitled to reimbursement in accordance with Section
6.04 of the Standard Terms and Conditions of Trust, the amounts
receivable by the Trustee from the Trust shall include amounts
charged by the Trustee or an affiliate in connection with custody
of securities at any branch or affiliate of the Trustee located
outside the United States.
H. The Initial Date of Deposit for the Trust is March 30,
2012.
I. There is no minimum amount of Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units.
J. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 2,500 Units of the Trust.
However, the ability to request an in-kind distribution of
Securities pursuant to Section 5.02 will terminate at any time
that the number of outstanding Units has been reduced to 10% or
less of the highest number of Units issued by the Trust. No in-
kind distribution requests submitted during the 30 business days
prior to the Trust's Mandatory Termination Date will be honored.
K. No Unit holder will be eligible for an in-kind
distribution of Securities pursuant to Section 8.02.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
TARGET FOCUS 4 APR. '12 - TERM 7/9/13
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. The aggregate number of Units outstanding for the Trust
on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
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 Record Date shall be as set forth in the Prospectus
under "Summary of Essential Information." The Trustee is
authorized to make the payments specified in Part I of Section
3.05 on the last Business Day of each month.
D. The Distribution Date shall be the 25th day of the
month in which the related Record Date occurs.
E. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
F. First Trust Advisors L.P.'s compensation as referred to
in Section 4.03 of the Standard Terms and Conditions of Trust and
FTP Services LLC's compensation as referred to in Section 3.16 of
the Standard Terms and Conditions of Trust shall collectively be
an annual fee in the amount of $.0060 per Unit.
G. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may 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. The Bank of New York Mellon,
or any of its affiliates, may perform services in any capacity
for any exchange traded fund, investment company, investment
trust or other entity whose shares are held as an asset of the
Trust, and The Bank of New York Mellon, as Trustee, shall be
entitled to receive the foregoing compensation, without
reduction, notwithstanding that The Bank of New York Mellon or an
affiliate is receiving compensation for services to such exchange
traded fund, investment company, investment trust or other
entity. Without limiting the scope of the expenses for which the
Trustee is entitled to reimbursement in accordance with Section
6.04 of the Standard Terms and Conditions of Trust, the amounts
receivable by the Trustee from the Trust shall include amounts
charged by the Trustee or an affiliate in connection with custody
of securities at any branch or affiliate of the Trustee located
outside the United States.
H. The Initial Date of Deposit for the Trust is March 30,
2012.
I. There is no minimum amount of Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units.
J. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 5,000 Units of the Trust. No
in-kind distribution requests submitted during the 10 business
days prior to the Trust's Mandatory Termination Date will be
honored.
K. No Unit holder will be eligible for an in-kind
distribution of Securities pursuant to Section 8.02.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
TARGET TRIAD APR. '12 - TERM 7/9/13
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. The aggregate number of Units outstanding for the Trust
on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
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 Record Date shall be as set forth in the Prospectus
under "Summary of Essential Information." The Trustee is
authorized to make the payments specified in Part I of Section
3.05 on the last Business Day of each month.
D. The Distribution Date shall be the 25th day of the
month in which the related Record Date occurs.
E. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
F. First Trust Advisors L.P.'s compensation as referred to
in Section 4.03 of the Standard Terms and Conditions of Trust and
FTP Services LLC's compensation as referred to in Section 3.16 of
the Standard Terms and Conditions of Trust shall collectively be
an annual fee in the amount of $.0060 per Unit.
G. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may 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. The Bank of New York
Mellon, or any of its affiliates, may perform services in any
capacity for any exchange traded fund, investment company,
investment trust or other entity whose shares are held as an
asset of the Trust, and The Bank of New York Mellon, as Trustee,
shall be entitled to receive the foregoing compensation, without
reduction, notwithstanding that The Bank of New York Mellon or an
affiliate is receiving compensation for services to such exchange
traded fund, investment company, investment trust or other
entity. Without limiting the scope of the expenses for which the
Trustee is entitled to reimbursement in accordance with Section
6.04 of the Standard Terms and Conditions of Trust, the amounts
receivable by the Trustee from the Trust shall include amounts
charged by the Trustee or an affiliate in connection with custody
of securities at any branch or affiliate of the Trustee located
outside the United States.
H. The Initial Date of Deposit for the Trust is March 30,
2012.
I. There is no minimum amount of Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units.
J. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 5,000 Units of the Trust. No
in-kind distribution requests submitted during the 10 business
days prior to the Trust's Mandatory Termination Date will be
honored.
K. No Unit holder will be eligible for an in-kind
distribution of Securities pursuant to Section 8.02.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
TARGET VIP APR. '12 - TERM 7/9/13
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. The aggregate number of Units outstanding for the Trust
on the Initial Date of Deposit and the initial fractional
undivided interest in and ownership of the Trust represented by
each Unit thereof are set forth in the Prospectus in the section
"Summary of Essential Information."
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 Record Date shall be as set forth in the Prospectus
under "Summary of Essential Information." The Trustee is
authorized to make the payments specified in Part I of Section
3.05 on the last Business Day of each month.
D. The Distribution Date shall be the 25th day of the
month in which the related Record Date occurs.
E. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
F. First Trust Advisors L.P.'s compensation as referred to
in Section 4.03 of the Standard Terms and Conditions of Trust and
FTP Services LLC's compensation as referred to in Section 3.16 of
the Standard Terms and Conditions of Trust shall collectively be
an annual fee in the amount of $.0060 per Unit.
G. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0065 per Unit, calculated
based on the largest number of Units outstanding during the
calendar year except during the initial offering period as
determined in Section 4.01 of this Indenture, in which case the
fee is calculated based on the largest number of units
outstanding during the period for which the compensation is paid
(such annual fee to be pro rated for any calendar year in which
the Trustee provides services during less than the whole of such
year). However, in no event, except as may 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. The Bank of New York Mellon,
or any of its affiliates, may perform services in any capacity
for any exchange traded fund, investment company, investment
trust or other entity whose shares are held as an asset of the
Trust, and The Bank of New York Mellon, as Trustee, shall be
entitled to receive the foregoing compensation, without
reduction, notwithstanding that The Bank of New York Mellon or an
affiliate is receiving compensation for services to such exchange
traded fund, investment company, investment trust or other
entity. Without limiting the scope of the expenses for which the
Trustee is entitled to reimbursement in accordance with Section
6.04 of the Standard Terms and Conditions of Trust, the amounts
receivable by the Trustee from the Trust shall include amounts
charged by the Trustee or an affiliate in connection with custody
of securities at any branch or affiliate of the Trustee located
outside the United States.
H. The Initial Date of Deposit for the Trust is March 30,
2012.
I. There is no minimum amount of Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units.
J. The minimum number of Units a Unit holder must redeem
in order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 5,000 Units of the Trust. No
in-kind distribution requests submitted during the 10 business
days prior to the Trust's Mandatory Termination Date will be
honored.
K. No Unit holder will be eligible for an in-kind
distribution of Securities pursuant to Section 8.02.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 1.01 (13) shall
be amended to delete the second sentence of such section and
replace it with the following:
"The Percentage Ratio with respect to each Security in
a Trust is that percentage derived by dividing the number of
shares of such Security included in the initial deposit made
pursuant to Section 2.01(a) by the total number of shares of
all Securities included in such deposit."
B. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 2.01(e) shall be
amended to read as follows:
"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, in a
book entry system operated by the Federal Reserve Board,
with an Eligible Foreign Custodian or in an Eligible
Securities Depository."
C. Section 2.01 of the Standard Terms and Conditions of
Trust shall be amended to include the following section at the
end of Section 2.01:
"(g) Notwithstanding anything to the contrary herein,
subject to the requirements set forth in this Section
2.01(g) and unless the Prospectus otherwise requires, the
Depositor may, on any Business Day (the "Trade Date"),
subscribe for additional Units as follows:
(i) Prior to the Evaluation Time on such Business Day,
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 (which will be a
precise replication of the then existing portfolio, as
consistent with the provisions of Section 2.01(b)) and shall
either (a) specify the quantity of additional Securities to
be deposited by the Depositor on the settlement date for
such subscription or (b) instruct the Trustee to purchase
additional Securities with an aggregate value as specified
in the Subscription Notice.
(ii) Promptly following the Evaluation Time on such
Business Day, the Depositor shall verify with the Trustee
the number of additional Units to be created.
(iii) Not later than the time on the settlement date
for such subscription when the Trustee is to deliver or
assign the additional Units created hereby, the Depositor
shall deposit with the Trustee (a) 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 (b) cash or a Letter of Credit in an amount
equal to the aggregate value of the additional Securities
specified in the Subscription Notice to be purchased by the
Trustee, and adding and subtracting the amounts specified in
the first and second sentences of Section 5.01, computed as
of the Evaluation Time on the Business Day preceding the
Trade Date divided by the number of Units outstanding as of
the Evaluation Time on the Business Day preceding the Trade
Date, times the number of additional Units to be created.
(iv) On the settlement date for such subscription, the
Trustee shall, in exchange for the Securities and cash, cash
or Letter of Credit described above, 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.
(v) In the event the Depositor fails to take such
action required by paragraph (iii) above, the Trustee shall,
on the settlement date for such subscription, settle the
securities transactions specified in the Subscription
Notice.
(vi) Neither the Trust nor Unit holders of the Trust
will be responsible for any loss resulting from the failure
of the Depositor to take such action required by paragraph
(iii) above."
D. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 6.01(e) shall be
amended to read as follows:
"(e) (1) Subject to the provisions of subparagraph (2)
of this paragraph, the Trustee may employ agents, sub-
custodians, attorneys, accountants and auditors and shall
not be answerable for the default or misconduct of any such
agents, sub-custodians, attorneys, accountants or auditors
if such agents, sub-custodians, attorneys, accountants or
auditors shall have been selected with reasonable care. The
Trustee shall be fully protected in respect of any action
under this Indenture taken or suffered in good faith by the
Trustee in accordance with the opinion of counsel, which may
be counsel to the Depositor acceptable to the Trustee,
provided, however that this disclaimer of liability shall
not excuse the Trustee from the responsibilities specified
in subparagraph (2) below. The fees and expenses charged by
such agents, sub-custodians, attorneys, accountants or
auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the
Trust as set forth in section 7.04 hereof.
(2) To the extent permitted under the Investment
Company Act of 1940 as evidenced by an opinion of counsel to
the Depositor satisfactory to the Trustee or "no-action"
letters or exemptive orders issued by the Securities and
Exchange Commission or its staff, the Trustee may place and
maintain in the care of an Eligible Foreign Custodian (which
is employed by the Trustee as a sub-custodian as
contemplated by subparagraph (1) of this paragraph (e) and
which may be an affiliate or subsidiary of the Trustee or
any other entity in which the Trustee may have an ownership
interest) or an Eligible Securities Depository the Trust's
investments (including foreign currencies) for which the
primary market is outside the United States, and such cash
and cash equivalents in amounts reasonably necessary to
effect the Trust's transactions in such investments,
provided that:
(A) The Trustee shall indemnify the Trust and hold
the Trust harmless from and against any risk of loss of
Trust assets held with an Eligible Foreign Custodian in
accordance with the foreign custody contract.
(B) The Trustee shall exercise reasonable care,
prudence and diligence such as a person having
responsibility for the safekeeping of Trust assets would
exercise, and shall be liable to the Trust for any loss
occurring as a result of its failure to do so.
(C) The Trustee shall perform all duties assigned to
the Foreign Custody Manager by Rule 17f-5 under the
Investment Company Act of 1940 (17 CFR Section 270.17f-
5), as now in effect or as such rule may be amended in
the future ("Rule 17f-5"). The Trustee shall not
delegate such duties.
(D) The Trustee shall (i) provide the Depositor with
an analysis of the custody risks associated with
maintaining assets with an Eligible Securities
Depository; (ii) monitor the custody risks associated
with maintaining assets with the Eligible Securities
Depository on a continuing basis and promptly notify the
Depositor of any material change in such risks; and
(iii) exercise reasonable care, prudence and diligence in
performing the foregoing duties. The Depositor shall
instruct the Trustee to take such action as the Depositor
deems appropriate in response to a notification by the
Trustee provided pursuant to (ii) in the preceding
sentence.
(E) The Trust's Prospectus shall contain such
disclosure regarding foreign securities and foreign
custody as is required for management investment
companies by Forms N-1A and N-2. Such Prospectus shall
also contain disclosure concerning the Depositor's
responsibilities described in (D) above.
(F) The Trustee shall maintain and keep current
written records regarding the basis for the choice or
continued use of a particular Eligible Foreign Custodian
pursuant to this subparagraph for a period of not less
than six years from the end of the fiscal year in which
the Trust was terminated, the first two years in an
easily accessible place. Such records shall be available
for inspection by Unit holders and the Securities and
Exchange Commission at the Trustee's corporate trust
office during its usual business hours."
E. Section 4.05 shall be amended to add the following
paragraph as the third paragraph of Section 4.05 of the Standard
Terms and Conditions of Trust:
"The Portfolio Supervisor may employ one or more sub-
Portfolio Supervisors to assist in performing the services
set forth in this Section 4.05 and shall not be answerable
for the default of any such sub-Portfolio Supervisors if
such sub-Portfolio Supervisors shall have been selected with
reasonable care, provided, however, that the Portfolio
Supervisor will indemnify and hold the Trust harmless from
and against any loss occurring as a result of a sub-
Portfolio Supervisor's willful misfeasance, reckless
disregard, bad faith, or gross negligence in performing
supervisory duties. The fees and expenses charged by such
sub-Portfolio Supervisors shall be paid by the Portfolio
Supervisor out of proceeds received by the Portfolio
Supervisor in accordance with Section 4.03 hereof."
F. Notwithstanding any provision to the contrary in the
Standard Terms and Conditions of Trust, the Trustee may deem and
treat the FTPS Unit Servicing Agent as the sole Unit holder of
FTPS Units for all purposes of the Indenture and shall not be
affected by any notice to the contrary.
G. Section 1.01 of the Standard Terms and Conditions of
Trust shall be amended to include the following:
"Section 1.01(31). "FTPS Unit" shall mean Units which
are purchased through the Fund/SERV(R) trading system or on
a manual basis through FTP Services LLC or for which FTP
Services LLC is acting as FTPS Unit Servicing Agent.
Section 1.01(32). "FTPS Unit Servicing Agent" shall
mean FTP Services LLC or any successor FTPS Unit servicing
agent appointed as hereinafter provided."
H. Section 3.05.I. of the Standard Terms and Conditions of
Trust shall be amended to include the following at the end of
such section:
"(d) deduct from the Income account or, to the extent
funds are not available in such Account, from the Capital
Account and pay to the FTPS Unit Servicing Agent the amount
that it is entitled to receive pursuant to Section 3.16."
I. Article III of the Standard Terms and Conditions of
Trust shall be amended to include the following section:
"Section 3.16. FTPS Unit Servicing Agent. FTP Services
LLC acts as record keeper, shareholder servicing agent and
distribution agent for Units which are purchased and sold
through the Fund/SERV(R) trading system or on a manual basis
through FTP Services LLC. ("FTPS Units"). (a) The FTPS Unit
Servicing Agent shall perform all of the duties with respect
to recordkeeping of FTPS Units and FTPS Unit holders,
distributions, redemption of FTPS Units and communications
to and with FTPS Unit holders listed below.
(1) The FTPS Unit Servicing Agent shall keep proper
books of record and account of all of the transactions in
the FTPS Units of each Trust under this Indenture at its
corporate office, including a record of the name and address
of, and the FTPS Units issued by each Trust and held by,
every FTPS Unit holder, and such books and records of each
Trust shall be made available to the Trustee and the
Depositor promptly upon request and open to inspection by
any FTPS Unit holder of such Trust, with respect to such
FTPS Unit holders transactions, at all reasonable times
during usual business hours. Without limiting the
foregoing, the FTPS Unit Servicing Agent shall make any
records or documents described in Reg. 270.31(a)-1 under
the Investment Company Act of 1940 available promptly to the
Trustee and the Depositor upon request during usual business
hours and will preserve such records and documents for the
periods prescribed in Reg. 270.31(a)-2 thereunder.
(2) The FTPS Unit Servicing Agent shall distribute on
or shortly after the Distribution Dates specified in the
Trust Agreement to each FTPS Unit holder of record on its
books on the Record Date for each such Distribution Date
specified in the Trust Agreement such FTPS Unit holder's
distribution as computed under the Standard Terms and
Conditions of Trust.
(3) In connection with such distributions set forth
above, the FTPS Unit Servicing Agent shall furnish a
Distribution Statement to FTPS Unit holders of record on its
books. The content and frequency of such Distribution
Statements shall in no respect be less detailed or frequent
than that specified in Section 3.06 of the Standard Terms
and Conditions of Trust.
(4) The FTPS Unit Servicing Agent shall transmit to
each FTPS Unit holder of record any notice or other
communication received from the Trustee and shall be solely
responsible for soliciting and transmitting to the Trustee
any notice required from FTPS Unit holders.
(5) The FTPS Unit Servicing Agent shall be responsible
for all tax reporting required from time to time by
applicable law and regulations with respect to holders of
FTPS Units, and reporting of cost basis in respect of the
FTPS Units of such holders (including, without limitation,
reporting required by Section 6045(g) of the Internal
Revenue Code of 1986, as amended).
(6) For purposes of permitting FTPS Unit holders to
satisfy any reporting requirements of applicable federal or
state tax law, the FTPS Unit Servicing Agent shall provide
the Trustee with the name, address, number of FTPS Units
held by, and such other information as requested by the
Trustee, for every FTPS Unit holder so that the Trustee can
transmit to any FTPS Unit holder of record on the FTPS Unit
Servicing Agent's books any reports required to be
distributed pursuant to Section 4.02 of the Standard Terms
and Conditions of Trust. The Trustee may rely on the
accuracy and completeness of the information (including any
records or documents made available) provided to it by the
FTPS Unit Servicing Agent and may accept such information
without inquiry. Each of the Depositor and the FTPS Unit
Servicing Agent hereby agree, jointly and severally, to
indemnify the Trustee and hold Trustee harmless from and
against any and all costs, expenses, penalties, damages,
liabilities or claims including attorneys' and accountants'
fees sustained or incurred by or asserted against the
Trustee by reason of or as a result of any of the
information provided to the Trustee by the FTPS Unit
Servicing Agent being inaccurate or incomplete. This
indemnity shall be a continuing obligation of each of the
Depositor and the FTPS Unit Servicing Agent, and their
successors and assigns, notwithstanding the termination of
this Trust Agreement.
(7) The FTPS Unit Servicing Agent shall distribute to
redeeming FTPS Unit holders of record on its books
redemption proceeds it receives pursuant to Section 5.02 of
the Standard Terms and Conditions of Trust from the Trustee
as the sole record owner of FTPS Units on the Trustee's
books.
(8) The FTPS Unit Servicing Agent shall distribute to
FTPS Unit holders of record on its books a pro rata portion
of termination proceeds it receives pursuant to Section 8.02
of the Standard Terms and Conditions of Trust from the
Trustee as the sole record owner of FTPS Units on the
Trustee's books.
(9) In connection with such termination distributions
set forth above, the FTPS Unit Servicing Agent shall furnish
a Final Distribution Statement to FTPS Unit holders of
record on its books. The content of such Final Distribution
Statements shall in no respect be less detailed than that
specified in Section 8.02 of the Standard Terms and
Conditions of Trust.
(10) As requested by the Depositor and/or the Trustee,
the FTPS Unit Servicing Agent shall perform such other
functions which, from time to time, are agreed upon by the
parties hereto and which may give rise to additional fees.
(b) As compensation for providing the services set
forth herein, of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940, and to
the extent that such services are in addition to, and do not
duplicate, the services to be performed by the Trustee, FTP
Services LLC shall receive, in arrears, against a statement
or statements therefore submitted to the Trustee monthly or
annually an aggregate annual fee in the per Unit amount set
forth in Part II of the Trust Agreement for the Trust,
calculated based on the largest number of Units outstanding
during the calendar year, except during the initial offering
period as determined in Section 4.01 of the Standard Terms
and Conditions of Trust, in which case the fee is calculated
based on the largest number of Units outstanding during the
period for which the compensation is paid (such annual fee
to be pro rated for any calendar year in which FTP Services
LLC provides services described herein during less than the
whole of such year). Such fee may exceed the actual cost of
providing such services for the Trust, but at no time will
the total amount received by FTP Services LLC for rendering
the services described in this Section 3.16 and First Trust
Advisors, L.P. for rendering the services described in
Section 4.03 to unit investment trusts of which the
Depositor is the sponsor in any calendar year exceed the
aggregate cost to FTP Services LLC and First Trust Advisors
L.P. of supplying such services in such year. Such
compensation may, from time to time, be adjusted by the
Depositor 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
an invoice therefore from FTP Services LLC, which shall
constitute the representation by FTP Services LLC that the
bookkeeping and administrative services for which
compensation is claimed are properly compensable hereunder
and that the aggregate cost incurred by FTP Services LLC of
providing FTPS Unit shareholder servicing hereunder was not
less than the compensation claimed, upon which
representation the Trustee may conclusively rely. Such
compensation shall be charged against the Income and/or
Capital Accounts, in accordance with Section 3.05 of the
Standard Terms and Conditions of Trust.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable
pursuant to this Section 3.16, the Trustee shall have the
power to sell (i) Securities from the current list of
Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) 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 3.16.
All moneys payable to the FTPS Unit Servicing Agent
pursuant to this Section 3.16 shall be secured by a lien on
the Trust prior to the interest of Unit holders, but no such
lien shall be prior to any lien in favor of the Trustee
under the provisions of Section 6.04 of the Standard Terms
and Conditions of Trust.
(c) The FTPS Unit Servicing Agent shall be under no
liability for any action taken in good faith on any
appraisal, paper, order, list, demand, request, consent,
affidavit, notice, opinion, direction, evaluation,
endorsement, assignment, resolution, draft or other
document, whether or not of the same kind, prima facie
properly executed, or for the disposition of moneys,
pursuant to this Indenture, except by reason of its own
negligence, lack of good faith or willful misconduct,
provided that the FTPS Unit Servicing Agent shall not in
any event be liable or responsible for any evaluation made
by the Evaluator.
(d) Except as the context otherwise requires, the FTPS
Unit Servicing Agent shall be subject to the provisions of
Section 4.05 herein in the same manner as it would if it
were the Evaluator.
(e) The FTPS Unit Servicing Agent shall be indemnified
ratably by the affected Trust and held harmless against any
loss or liability accruing to it without negligence, bad
faith or willful misconduct on its part, arising out of or
in connection with the operations of the Trust, including
the costs and expenses (including counsel fees) of defending
itself against any claim of liability in the premises,
including without limitation any loss, liability or expense
incurred in acting pursuant to written directions to the
FTPS Unit Servicing Agent given by the Trustee or Depositor
from time to time in accordance with the provisions of this
Indenture or in undertaking actions from time to time which
the FTPS Unit Servicing Agent deems necessary in its
discretion to protect the Trust and the rights and interests
of the FTPS Unit holders pursuant to the terms of this
Indenture.
(f) The FTPS Unit Servicing Agent shall conduct its
operations in a manner that is compatible with the current
operational procedures and requirements of the Trustee
(including, without limiting the foregoing, the provision
and receipt of data in such format and meeting such
technical requirements as the Trustee may specify) and shall
exercise its best efforts to accommodate any changes in the
operational procedures and requirements which the Trustee
may make upon prior notice to the FTPS Unit Servicing
Agent. The Depositor acknowledges and agrees that the
default of the FTPS Unit Servicing Agent in its obligations
under this paragraph, or the performance by the FTPS Unit
Servicing Agent of its obligations in a manner which shall
adversely affect the Trustee's performance of its duties,
shall be a sufficient grounds for the Trustee to remove the
FTPS Unit Servicing Agent pursuant to Section 3.16(d) and
Section 4.05.
(g) As used in this Section 3.16, "FTPS Unit holder,"
when referring to the records of the Trustee, shall mean the
FTPS Unit Servicing Agent and, when referring to the records
to be maintained by the FTPS Unit Servicing Agent, shall
mean each owner of a FTPS Unit identified on the records of
the FTPS Unit Servicing Agent."
J. Section 4.01(a) and (b) of the Standard Terms and
Conditions of Trust shall be amended to include the FTPS Unit
Servicing Agent among the parties who are furnished information
concerning the Evaluation of each issue of Securities deposited
in the Trust and the Trust Fund Evaluation.
K. The second sentence of the first paragraph of Section
4.03 shall be replaced with the following:
"Such fee may exceed the actual cost of providing such
services for the Trust, but at no time will the total amount
received by First Trust Advisors, L.P. for rendering the
services described in this Section 4.03 and FTP Services LLC
for rendering the services described in Section 3.16 to unit
investment trusts of which the Depositor is the sponsor in
any calendar year exceed the aggregate cost to FTP Services
LLC and First Trust Advisors, L.P. of supplying such
services in such year."
L. Section 4.04 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety by the following:
"Section 4.04. Liability of Evaluator. The Trustee,
FTPS Unit Servicing Agent, Depositor and the Unit holders
may rely on any Evaluation furnished by First Trust
Advisors, L.P., acting in its capacity as Evaluator, and
shall have no responsibility for the accuracy thereof. The
determinations made by the Evaluator hereunder shall be made
in good faith upon the basis of the best information
available to it. The Evaluator shall be under no liability
to the Trustee, FTPS Unit Servicing Agent, Depositor or the
Unit holders for errors in judgment; provided, however, that
this provision shall not protect the Evaluator against any
liability to which it would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder."
M. The second sentence of the first paragraph of Section
5.01 shall be amended to delete subsection (ii) of such sentence
and replace it in its entirety with the following:
"(ii) amounts representing estimated accrued expenses of
such Trust including but not limited to unpaid fees and
expenses of the Trustee, the Evaluator, the Portfolio
Supervisor, the FTPS Unit Servicing Agent, the Depositor and
its counsel, in each case as reported by the Trustee to the
Depositor on or prior to the date of Evaluation,"
N. Section 6.01(c) of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"(c) The Trustee shall not be responsible for or in
respect of the recitals herein, the validity or sufficiency
of this Indenture or for the due execution hereof by the
Depositor, the Portfolio Supervisor, the Evaluator, or the
FTPS Unit Servicing Agent, or for the form, character,
genuineness, sufficiency, value or validity of any of the
Securities (except that the Trustee shall be responsible for
the exercise of due care in determining the genuineness of
Securities delivered to it pursuant to contracts for the
purchase of such Securities) or for or in respect of the
validity or sufficiency of the Units or of the Certificates
(except for the due execution thereof by the Trustee) or for
the due execution thereof by the Depositor, and the Trustee
shall in no event assume or incur any liability, duty or
obligation to any Unit holder, the FTPS Unit Servicing Agent
or the Depositor other than as expressly provided for
herein. The Trustee shall not be responsible for or in
respect of the validity of any signature by or on behalf of
the Depositor, the Portfolio Supervisor, the Evaluator or
the FTPS Unit Servicing Agent;"
O. Section 8.02(b) of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"(b) deduct from the Income Account of such Trust or,
to the extent that funds are not available in such Account,
from the Capital Account of such Trust, and pay accrued and
unpaid fees of the Evaluator, the Portfolio Supervisor, the
FTPS Unit Servicing Agent, the Depositor and counsel in
connection with such Trust, if any;"
P. Section 8.05 of the Standard Terms and Conditions of
Trust shall be amended to add the following paragraph immediately
preceding the last paragraph of such section:
"Any notice, demand, direction or instruction to be
given to the FTPS Unit Servicing Agent shall be in writing
and shall be duly given if mailed or delivered to the FTPS
Unit Servicing Agent at 000 X. Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, XX 00000, or at such other address as shall be
specified by the FTPS Unit Servicing Agent to the other
parties hereto in writing."
Q. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, the second paragraph in
Section 8.02 shall be amended to read as follows:
"In the event of any termination of the Trust prior to
the Mandatory Termination Date, the Trustee shall proceed to
liquidate the Securities then held and make the payments and
distributions provided for hereinafter in this Section 8.02,
except that in such event, the distribution to each Unit
holder shall be made in cash and shall be such Unit holder's
pro rata interest in the balance of the principal and income
accounts after the deductions herein provided. In the event
that the Trust shall terminate on or after the Mandatory
Termination Date, the Trustee shall, at least thirty days
prior to the Mandatory Termination Date, send a written
notice to all Unit holders of record. If such Unit holder
owns at least the minimum number of Units of Trust set forth
in Part II of the Trust Agreement, such notice shall further
indicate that such Unit holder may elect to receive an in-
kind distribution of their pro rata share of the Securities,
to the extent of whole shares. The Trustee will honor duly
executed requests for in-kind distributions received
(accompanied by the electing Unit holder's Certificate, if
issued) by the close of business ten business days prior to
the Mandatory Termination Date. Unit holders who do not
effectively request an in-kind distribution shall receive
their distribution upon termination in cash. Unit holders
shall receive their distribution upon termination in cash."
R. Section 6.01 shall be amended to add the following as
paragraph (n):
"(n) The Trustee may act, and may engage any
corporation, partnership or other entity affiliated with The
Bank of New York Mellon (an "Affiliated Entity") to act, as
broker or dealer to execute transactions, including the
purchase or sale of any securities currently distributed,
underwritten or issued by any Affiliated Entity, and
receive, or pay to the Affiliated Entity, as applicable,
compensation for such services at standard commission rates,
markups or concessions."
S. Section 3.02 shall be amended to read in its entirety
as follows:
"Section 3.02 Income Account. The Trustee shall
collect the dividends and other cash distributions on the
Securities in each Trust which would be treated as dividend
(other than capital gain dividends) or interest income under
the Internal Revenue Code as such become payable (including
all monies which would be so treated representing penalties
for the failure to make timely payments on the Securities,
or as liquidated damages for default or breach of any
condition or term of the Securities or of the underlying
instrument relating to any Securities and other income
attributable to a Failed Contract Obligation for which no
Replacement Security has been obtained pursuant to Section
3.12 hereof) and credit such income to a separate account
for each Trust to be known as the "Income Account."
Any non-cash distributions received by a Trust shall be
sold to the extent they would be treated as dividend or
interest income under the Internal Revenue Code and the
proceeds shall be credited to the Income Account. Except as
provided in the preceding sentence, non-cash distributions
received by a Trust (other than a non-taxable distribution
of the shares of the distributing corporation which shall be
retained by a Trust) shall be dealt with in the manner
described in Section 3.11, herein, and shall be retained or
disposed of by such Trust according to those provisions and
the proceeds thereof shall be credited to the Capital
(Principal) Account. Neither the Trustee nor the Depositor
shall be liable or responsible in any way for depreciation
or loss incurred by reason of any such sale.
All other distributions received by a Trust shall be
credited to the Capital (Principal) Account."
T. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, the first paragraph of
Section 3.05.(II)(a) shall be amended to provide 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 Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations and, with respect to any Trust
which is a widely held fixed investment trust as defined in
Treas. Reg. Section 1.671-5(b)(22), monies constituting
proceeds of pro-rata sales of Trust assets to effect
redemptions, which proceeds shall be retained for payment of
redemptions) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I, provided, however, that notwithstanding any
contrary provisions of paragraph (II)(c) of this Section,
the Trustee shall not be required to make a distribution
from the Capital Account unless the balance available for
distribution is equal to or greater than $1.00 per 100
Units, except that, notwithstanding any provision of the
Standard Terms and Conditions of Trust or this Trust
Agreement to the contrary:
(i) With respect to any Trust which is a widely held
fixed investment trust as defined on Treas. Reg. Section
1.671-5(b)(22), the Trustee shall on any Distribution Date
distribute the cash available for distribution in the Income
and Capital Accounts within the meaning of Treas. Reg.
Section 1.671-5(b)(5) if the aggregate amount of such cash
available for distribution is equal to or greater than .1%
of the net asset value of the Trust on the related Record
Date. This provision is intended to comply with Treas. Reg.
Section 1.671-5(c)(2)(v)(C) and shall be interpreted
consistent therewith and with any successor regulations.
(ii) With respect to any trust which intends to qualify
as a regulated investment company, as set forth in the
Prospectus for such trust, the Trustee may make such
distributions from the Income or Capital Accounts as may be
necessary, as determined by the Trust's independent
registered public accounting firm, in order to avoid
imposition of any income or excise taxes on undistributed
income in the Trust. In addition, the Trustee will
distribute any funds in the Capital Account in December of
each year."
U. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the ninth paragraph of Section
5.02 of the Standard Terms shall be amended to read in its
entirety as follows:
"With respect to any Trust which is a widely held fixed
investment trust as defined on Treas. Reg. Section 1.671-
5(b)(22), for the purpose of funding the Principal Account
for payment of the Redemption Value with respect to each
tender of a Unit or Units for redemption, the Depositor may
direct the trustee to sell and, in the absence of contrary
direction from the Depositor, the Trustee may sell, the pro
rata amount of each Security allocable to the tendered Units
as soon as reasonably practicable following such tender. In
determining such pro rata amount, the Trustee may apply the
calendar month aggregation method provided in Treas. Reg.
Section 1.671-5(c)(2)(iv)(G)(3)(i). If the proceeds of such
pro rata sales are insufficient, the Trustee may (i) sell
additional Securities as directed by the Sponsor or, in the
absence of direction, sell Securities in amounts which are
reasonably pro rata as determined by the Trustee or (ii)
advance funds required to pay the Redemption Value, provided
that the Trustee shall have no obligation to advance funds
if the unreimbursed amount advanced to the Trust for this
purpose then equals at least $15,000. When directed by the
Depositor or determined by the Trustee, but in all events as
promptly as reasonably practicable whenever the unreimbursed
amount advanced by the Trustee equals or exceeds $15,000,
the Trustee shall sell additional Securities in the manner
provided in clause (i) of the preceding sentence and shall
reimburse itself the amount of the advance, provided that
the Trustee's right to reimbursement shall not be affected
by any delay in sale or reimbursement. The Trustee's right
to reimbursement shall be secured by a lien on the Trust
prior to the interest of the Unit holders. The net proceeds
of any sale of Securities representing income shall be
credited to the Income Account and then disbursed therefrom
for payment of expenses and payments to Unit holders as
otherwise provided in this Indenture. The balance of such
net proceeds shall be credited to the Principal Account.
The Depositor and the Trustee shall use their reasonable
efforts to conduct pro rata sales of Securities qualifying
for exception from tax reporting as described in Treas. Reg.
Section 1.671-5(c)(2)(iv)(G) and, during the final calendar
year of the trust, qualifying for the exception from tax
reporting described in Treas. Reg. Section 1.671-
5(c)(2)(iv)(F). Notwithstanding the foregoing, neither the
Trustee nor the Depositor shall be liable to any person in
the event sales proceeds for any calendar year exceed the
general de minimis test of Treas. Reg. Section 1.671-
5(c)(2)(iv)(D)(1) (whether or not due to a failure to sell
Securities pro rata) or otherwise require reporting under
Treas. Reg. Section 1.671-5."
V. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 6.02 of the Standard Terms
is amended to read in its entirety as follows:
"Section 6.02. Books, Records and Reports. (a)
General. The Trustee shall keep proper books of record and
account of all the transactions of each Trust under this
Indenture at its corporate trust office, including a record
of the name and address of, and the Units issued by each
Trust and held by, every Unit holder, and such books and
records of each Trust shall be open to inspection by any
Unit holder of such Trust at all reasonable times during the
usual business hours. The Trustee shall make such annual or
other reports as may from time to time be required under any
applicable state or federal statute or rule or regulations
thereunder.
(b) Audit of trust accounts. Unless the Depositor
determines that such an audit is not required, the accounts
of the Trust shall be audited not less than annually by
independent public accountants designated from time to time
by the Depositor and the Trustee and the reports of such
accountants shall be furnished upon request to Unit holders.
So long as the Depositor is making a secondary market for
Units, the Depositor shall bear the cost of such annual
audits to the extent such cost exceeds $.50 per 100 Units.
(c) Costs of updating of registration statement. If
provided for in the Prospectus for a Trust, the Trustee
shall pay, or reimburse to the Depositor, the expenses
related to the updating of the Trust's registration
statement, to the extent of legal fees, typesetting fees,
electronic filing expenses and regulatory filing fees. Such
expenses shall be paid from the Income Account, or to the
extent funds are not available in such Account, from the
Capital Account, against an invoice or invoices therefor
presented to the Trustee by the Depositor. By presenting
such invoice or invoices, the Depositor shall be deemed to
certify, upon which certification the Trustee is authorized
conclusively to rely, that the amounts claimed therein are
properly payable pursuant to this paragraph. The Depositor
shall provide the Trustee, from time to time as requested,
an estimate of the amount of such expenses, which the
Trustee shall use for the purpose of estimating the accrual
of Trust expenses. The amount paid by the Trust pursuant to
this paragraph in each year shall be separately identified
in the annual statement provided to Unit holders. The
Depositor shall assure that the Prospectus for the Trust
contains such disclosure as shall be necessary to permit
payment by the Trust of the expenses contemplated by this
paragraph under applicable laws and regulations. The
provisions of this paragraph shall not limit the authority
of the Trustee to pay, or reimburse to the Depositor or
others, such other or additional expenses as may be
determined to be payable from the Trust as provided in this
Section 6.02.
(d) Tax reporting for grantor trusts. With respect to
any Trust which is a widely held fixed investment trust as
defined in Treas. Reg. Section 1.671-5(b)(22), the Depositor
and the Trustee agree that the Trust meets the requirements
of Treas. Reg. Section 1.671-5(f)(1)(i), and the Trustee is
authorized:
(i) to report in accordance with any of the safe
harbor methods described in Treas. Reg. Section 1.671-
5(f);
(ii) to report sales proceeds, whenever permitted,
as provided in Treas. Reg. Section 1.671-
5(f)(1)(iv)(B);
(iii) to report proceeds of sales and
dispositions described in Treas. Reg. Section 1.671-
5(c)(2)(iv)(D)(4)(ii) as provided in Treas. Reg.
Section 1.671-5(c)(2)(iv)(D)(4)(i); and
(iv) to use the measuring date, as defined in
Treas. Reg. Section 1.671-5(c)(2)(iv)(D)(1), in lieu of
the start-up date, wherever permitted.
For purposes of Treas. Reg. Section 1.671-
5(f)(1)(iv)(A)(2), the date of the last deposit under
2.01(b) prior to the expiration of the initial offering
period, as certified to the Trustee by the Depositor, shall
be considered the 'start-up date' of the Trust.
(e) Cost-basis reporting for Unit holders who purchase
or hold their Units through the First Trust Advisor Direct
system ("Advisor Direct"). The Depositor shall maintain
information required for the reporting of the cost basis of
Advisor Direct holders (as defined in section 2.03(b)) as
may be required from time to time by applicable law
(including, without limitation, Section 6045(g) of the
Internal Revenue Code of 1986, as amended) and regulations,
and the Depositor shall be responsible for the reporting of
such information to the Advisor Direct holders, or if
reporting by the Depositor is not permitted by applicable
law or regulation or if the Depositor and Trustee otherwise
agree that the Trustee shall report such information, the
Depositor shall provide the Trustee such information as will
permit the Trustee to provide required cost-basis
information to the Advisor Direct holders and shall provide
the information at such times and in such form as the
Trustee may reasonably request. The Depositor will be
solely responsible for the accuracy of such cost-basis
information and the reporting thereof to Advisor Direct
holders as provided above. The Trustee may rely
conclusively upon the cost-basis information provided by the
Depositor with respect to Advisor Direct holders, and shall
be indemnified in accordance with Section 6.04 of the
Indenture against any loss or liability, including any
penalty or other charge imposed by any taxing authority in
respect of such cost-basis information or reporting thereof
made by the Depositor as provided in this paragraph."
W. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of the Trust, the eighth paragraph
of Section 5.02 of the Standard Terms shall be amended to read in
its entirety as follows:
"Notwithstanding the foregoing provisions of this
Section 5.02, the Trustee (or the FTPS Unit Servicing Agent
in the case of FTPS Units) is hereby irrevocably authorized
in its discretion, in the event that the Depositor does not
purchase any Units tendered to the Trustee (or the FTPS Unit
Servicing Agent in the case of FTPS Units) for redemption,
or in the event that a Unit is being tendered by the
Depositor for redemption, in lieu of redeeming Units, to
sell Units in the over-the-counter market through any broker-
dealer of its choice for the account of the tendering Unit
holder at prices which will return to the Unit holder an
amount in cash, net after deducting brokerage commissions,
transfer taxes and other charges, equal to or in excess of
the Redemption Value which such Unit holder would otherwise
be entitled to receive on redemption pursuant to this
Section 5.02. The Trustee (or the FTPS Unit Servicing Agent
in the case of FTPS Units) shall pay to the Unit holder the
net proceeds of any such sale on the day on which such Unit
holder would otherwise be entitled to receive payment of the
Redemption Value hereunder."
X. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 6.01(l) shall be
replaced in its entirety with the following:
"The Trust may include (I) a letter or letters of
credit meeting the requirements of Section 2.05 for the
purchase of Securities or Contract Obligations issued by the
Trustee in its individual capacity for the account of the
Depositor or (II) Securities issued by the Trustee, its
parent, or affiliates, and the Trustee may otherwise deal
with the Depositor and the Trust with the same rights and
powers as if it were not the Trustee hereunder; and"
Y. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 3.07 shall be
amended to add the following immediately after Section 3.07(i):
"(j) that as a result of the ownership of the
Security, the Trust or its Unit holders would be a direct or
indirect shareholder of a passive foreign investment company
as defined in section 1297(a) of the Internal Revenue Code.
(k) that such sale is necessary for the Trust to
comply with such federal and/or state securities laws,
regulations and/or regulatory actions and interpretations
which may be in effect from time to time."
Z. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, paragraph (e) of Section
6.05 shall be amended by adding the following sentence at the end
thereof:
"The Trustee's and each successor Trustee's right to
indemnification shall survive its resignation or removal."
AA. All references to The Bank of New York in the Standard
Terms and Conditions of Trust shall be replaced with "The Bank of
New York Mellon."
BB. Any notice, demand, direction or instruction to be
given to either the Depositor, Portfolio Supervisor or Evaluator
shall be in writing and shall be duly given if mailed or
delivered to such party at 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000, or at such other address as shall be
specified by the Depositor, Portfolio Supervisor or Evaluator to
the other parties hereto in writing.
CC. Article IV of the Standard Terms and Conditions of
Trust shall be amended to add the following:
"Section 4.06. Liability of Portfolio Supervisor. The
Portfolio Supervisor shall be under no liability to the Unit
holders for any action taken or for refraining from the
taking of any action in good faith pursuant to this
Indenture or for errors in judgment, but shall be liable
only for its own willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties
hereunder."
DD. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, the last sentence of
Section 3.01 shall be replaced with the following:
"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 costs of a portfolio consultant, if any, 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."
EE. Section 2.03(b) of the Standard Terms and Conditions of
Trust is restated in full as follows:
"Notwithstanding any provisions of the Indenture to the
contrary, Units shall be held solely in uncertificated form
evidenced by appropriate notation in the registration books
of the Trustee, and no Unit holder shall be entitled to the
issuance of a Certificate evidencing the Units owned by such
Unit holder. The only permitted registered holders of Units
shall be (i) Depository Trust Company (or its nominee, Cede
& Co.), (ii) the FTPS Unit Servicing Agent, or (iii) Unit
holders who purchase or otherwise hold their Units through
Advisor Direct ("Advisor Direct holders"); consequently,
individuals who are not Advisor Direct holders or holders of
FTPS Units must hold their Units through an entity which is
a participant in Depository Trust Company. Except as
provided by the preceding provisions of this paragraph, the
rights specified in this Indenture of holders of Units
evidenced by a Certificate shall apply to holders of Units
held in uncertificated form."
FF. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, Section 3.13 shall be
amended by adding the following sentences at the end thereof:
"To the extent permitted by applicable law and
regulatory authorization, unpaid portions of the deferred
sales charge shall be secured by a lien on the Trust in
favor of the Depositor, provided that such lien shall be
subordinate to the lien of the Trustee granted by Section
6.04 of the Standard Terms and Conditions of Trust. To the
extent of such lien, the Trustee shall hold the assets of
the Trust for the benefit of the Depositor, provided that
the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary
course of the administration of the trust without regard to
such lien."
GG. For Trusts which make annualized distributions of
income, as set forth in the Prospectus for such Trusts, Section
2.01(b)(4), as renumbered hereby, shall be amended to add the
following sentence at the end thereof:
"If the Cash amount pursuant to the foregoing
calculation is negative, the Trustee shall distribute to the
Depositor the amount of such deficit, and may advance funds
to the Trust for such purpose, such advance to be repaid and
secured in the manner provided in Section 3.05(II)(b) as
amended herein."
HH. Section 3.07(h) of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"(h) in the case of a Trust which has elected to
qualify as a "regulated investment company," that the sale
of Securities is necessary or advisable: (i) in order to
maintain the qualification of the Trust as such; or (ii) to
provide funds to make any distribution from such a Trust for
a taxable year in order to avoid imposition of any income or
excise taxes on undistributed income in the Trust;"
II. For Trusts which intend to qualify as a regulated
investment company, as set forth in the Prospectus for such
Trusts, the first two sentences in the second paragraph of
Section 3.11 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 will, at the direction of the Depositor, vote
for or against 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."
JJ. For Trusts which intend to qualify as a regulated
investment company, as set forth in the Prospectus for such
Trusts, Section 2.01(b)(4) of the Standard Terms and Conditions
of Trust shall be deleted in its entirety and Section 2.01(b)(5)
shall be renumbered to "Section 2.01(b)(4)."
KK. For Trusts which intend to qualify as a regulated
investment company, as set forth in the Prospectus for such
Trusts, Section 3.12(a) of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"(a) The New Securities shall be Securities as
originally selected for Deposit in that Series of the Trust
or securities which the Depositor determines to be similar
in character as Securities originally selected for Deposit;"
LL. For Trusts which intend to qualify as a regulated
investment company, as set forth in the Prospectus for such
Trusts, Article III of the Standard Terms and Conditions of Trust
shall be amended to include the following section:
"Section 3.17. Regulated Investment Company Election.
Each Trust elects to be treated and to qualify as a
"regulated investment company" as defined in the Internal
Revenue Code, and the Trustee is hereby directed to make
such elections, including any appropriate election to be
taxed as a corporation, as shall be necessary to effect such
qualification."
MM. For Trusts which intend to qualify as a regulated
investment company, as set forth in the Prospectus for such
Trusts, Section 8.01(b) shall be amended to remove the following
text from such section:
"as a grantor trust."
NN. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, for Trusts which make
annualized distributions of income, as set forth in the
Prospectus for such Trust, Section 3.05 (II)(b) shall be replaced
with the following:
"(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 balance of the Income Account
calculated as of the prior Record Date, on the basis of one-
twelfth of (i) the annual income of the Trust for the
ensuing twelve months estimated by reference to the
distributions made on the Securities during the preceding
calendar quarter (as adjusted for any information with
respect to future dividends received by the Trustee prior to
such Record Date) less (ii) the fees and expenses then
deductible pursuant to Section 3.05 (I) and (iii) 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. The Trustee shall advance out of its own funds and
deposit in and credit to the Income Account on each
Distribution Date, to the extent that there is not
sufficient cash in the Income Account, the additional
amount, if any, anticipated by the Trustee to be necessary
to make the Income Distribution as specified in the
preceding sentence; the Trustee shall be entitled to be
reimbursed from the Income Account without interest when
funds are available therein from income on any of the
Securities, including upon the sale of Securities to meet
redemptions, for any and all amounts advanced by it pursuant
to this paragraph. The Trustee shall be deemed to be the
beneficial owner of the income of the Trust to the extent
such income is required to reimburse the Trustee for amounts
advanced by it pursuant to this paragraph; amounts payable
to the Trustee in respect of such advances shall be secured
by a lien on the Trust prior to the interests of Unit
holders. In the event any issuer of Securities fails to
make an anticipated distribution, or there is a disposition
of Securities or other event that reduces the net income
which will be received from that estimated by the Trustee,
the Trustee shall, on the Record Date next following the
Trustee's determination that such event has occurred, reduce
the amount of the next following distribution by such amount
as will enable the Trustee to recover any advances to the
Trust referable to the anticipated receipt of such
unrealized income. As determined by the Trust's independent
registered public accounting firm, the Trustee shall adjust
the December distribution from the Income and Capital
Accounts as may be necessary so that the Trust distributions
during the calendar year equal an amount necessary to avoid
paying any regulated investment company excise tax during
such year. The Trustee is authorized to reduce the
following January distribution by the amount of any such
increase."
IN WITNESS WHEREOF, First Trust Portfolios L.P., The
Bank of New York Mellon, First Trust Advisors L.P. and FTP
Services LLC 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.
FIRST TRUST PORTFOLIOS L.P.,
Depositor
By Xxxxx X. Xxxxx
Senior Vice President
THE BANK OF NEW YORK MELLON,
Trustee
By Xxxx X. Xxxxxx
Managing Director
[SEAL]
ATTEST:
Xxx X. Xxx
Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Xxxxx X. Xxxxx
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Xxxxx X. Xxxxx
Senior Vice President
FTP Services LLC,
FTPS Unit Servicing Agent
By Xxxxx X. Xxxxx
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 3397
(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.)
