THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 137
TRUST AGREEMENT
Dated: January 17, 1996
This Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank (National Association), as
Trustee, Xxxxxx Data Corporation, as Evaluator, and First Trust
Advisors L.P., as 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 24"
effective January 23, 1992 (herein called 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, the Trustee, the
Evaluator and Portfolio 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:
(a) The Bonds defined in Section 1.01(5) listed in
Schedule A hereto have been deposited in trust under this
Trust Agreement.
(b) The fractional undivided interest in and ownership
of the Trust Fund represented by each Unit for a Trust is the
amount set forth under the captions "Summary of Essential
Information - Fractional Undivided Interest in the Trust per
Unit" in the Prospectus.
(c) The number of units in a Trust referred to in
Section 2.03 is set forth under the caption "Summary of
Essential Information - Number of Units" in the Prospectus.
(d) For each Trust the First General Record Date and
the amount of the second distribution of funds from the
Interest Account shall be the record date for the Interest
Account and the amount set forth under "Trust Summary-Initial
Distribution" for such Trust in the Prospectus.
(e) For each Trust the "First Settlement Date" is the
date set forth under "Summary of Essential Information-First
Settlement Date" for such Trust in the Prospectus.
(f) The definition of "Bonds" contained in Section
1.01(5) of the Standard Terms and Conditions of Trust shall
be amended by inserting the following after "(the "Corporate
Bonds")" appearing in the first sentence thereof:
",zero coupon bonds (the "Zero Coupon Bonds")".
(g) Notwithstanding anything to the contrary in the
first three sentences of Section 6.04 of Article VI of the
Standard Terms and Conditions of trust the Trustee's fee,
shall be calculated on the largest number of Units
outstanding during each period in respect of which a payment
is made pursuant to Section 3.05, and the initial rate at
which such compensation is computed shall be the amount set
forth in "Special Trust Information" for such Trust in the
Prospectus.
(h) Notwithstanding anything to the contrary contained
in the Standard Terms and Conditions of Trust, "Portfolio
Supervisor" shall mean First Trust Advisors L.P. and its
successors in interest, or any successor portfolio supervisor
appointed as hereinafter provided.
PART III
A. Notwithstanding any provision to the contrary contained
in the Standard Terms and Conditions of Trust and in lieu of the
receipt of Certificates evidencing ownership of Units of the
Fund, the Sponsor or any Underwriter of the Fund listed under the
caption "Underwriting" in the Prospectus, at its option, may
elect that Units of the Fund owned by it be reflected by book
entry on the books and records of the Trustee. For all purposes
such Sponsor or Underwriter shall be deemed the owner of such
Units as if a Certificate evidencing ownership of Units of the
Fund had actually been issued by the Trustee. The Units
reflected by book entry on the books and records of the Trustee
may be transferable by the registered owner of such Units by
written instrument in form satisfactory to the Trustee. The
registered owner of Units reflected by book entry on the books
and records of the Trustee shall have the right at any time to
obtain Certificates evidencing ownership of such Units.
B. Section 2.01. of Article II of the Standard Terms and
Conditions of Trust is hereby amended by inserting "(a)" prior to
the beginning of the text of the paragraph and adding the
following additional paragraphs:
(b) From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its discretion,
to assign, convey to and deposit with the Trustee additional
Bonds, in bearer form or duly endorsed in blank or accompanied by
all necessary instruments of assignment and transfer in proper
form (or Contract Obligations relating to such Bonds), to be
held, managed and applied by the Trustee as herein provided.
Such deposit of additional Bonds shall be made, in each case,
pursuant to a Notice of Deposit of Additional Bonds from the
Depositor to the Trustee. The Depositor, in each case, shall
ensure that each deposit of additional Bonds pursuant to this
Section shall be, as nearly as is practicable, in the identical
ratio as the Percentage Ratio for such Bonds as is specified in
the Prospectus for the Trust and the Depositor shall ensure that
such Bonds are identical to those deposited on the Initial Date
of Deposit. The Depositor shall deliver the additional Bonds
which were not delivered concurrently with the deposit of
additional Bonds and which were represented by Contract
Obligations within 10 calendar days after such deposit of
additional Bonds (the "Additional Bonds Delivery Period"). If a
contract to buy such Bonds between the Depositor and seller is
terminated by the seller thereof for any reason beyond the
control of the Depositor or if for any other reason the Bonds are
not delivered to the Trust by the end of the Additional Bonds
Delivery Period for such deposit, the Trustee shall immediately
draw on the Letter of Credit, if any, in its entirely, apply the
monies in accordance with Section 2.01(d), and the Depositor
shall forthwith take the remedial action specified in
Section 3.14. If the Depositor does not take the action
specified in Section 3.14 within 10 calendar days of the end of
the Additional Bonds Delivery Period, the Trustee shall forthwith
take the action specified in Section 3.14.
(c) In connection with the deposits described in
Section 2.01 (a) and (b), the Depositor has, in the case of
Section 2.01(a) deposits, and, prior to the Trustee accepting a
Section 2.01(b) deposit, will, deposit cash and/or Letter(s) of
Credit in an amount sufficient to purchase the Contract
Obligations (the "Purchase Amount") relating to Bonds which are
not actually delivered to the Trustee at the time of such
deposit, the terms of which unconditionally allow the Trustee to
draw on the full amount of the available Letter of Credit. The
Trustee may deposit such cash or cash drawn on the Letter of
Credit in a non-interest bearing account for the Trust.
(d) In the event that the purchase of Contract Obligations
pursuant to any contract shall not be consummated in accordance
with said contract or if the Bonds represented by Contract
Obligations are not delivered to the Trust in accordance with
Section 2.01(a) or 2.01(b) and the monies, or, if applicable, the
monies drawn on the Letter of Credit, deposited by the Depositor
are not utilized for Section 3.14 purchases of New Bonds, such
funds, to the extent of the purchase price of Failed Contract
Obligations for which no Replacement Bond was acquired pursuant
to Section 3.14, plus all amounts described in the next
succeeding two sentences, shall be credited to the Principal
Account and distributed pursuant to Section 3.05 to Unit holders
of record as of the Record Date next following the failure of
consummation of such purchase. The Depositor shall cause to be
refunded to each Unit holder his pro rata portion of the sales
charge levied on the sale of Units to such Unit holder
attributable to such Failed Contract Obligation. The Depositor
shall also pay to the Trustee, for distribution to the Unit
holders, interest on the amount of the purchase price to the
Trust of the Failed Contract Obligation, at the rate of 5% per
annum to the date the Depositor notifies the Trustee that no
Replacement Bond will be purchased or, in the absence of such
notification, to the expiration date for purchase of a
Replacement Security specified in Section 3.14. Any amounts
remaining from monies drawn on the Letter of Credit which are not
used to purchase New Bonds or are not used to provide refunds to
Unit holders shall be paid to the Depositor.
(e) The Trustee is hereby irrevocably authorized to effect
registration or transfer of the Bonds in fully registered form to
the name of the Trustee or to the name of its nominee.
(f) In connection with and at the time of any deposit of
additional bonds pursuant to Section 2.01(b), the Depositor shall
exactly replicate Cash (as defined below) received or receivable
by the Trust as of the date of such deposit. For purposes of
this paragraph, "Cash" means, as to the Principal Account, cash
or other property (other than Bonds) on hand in the Principal
Account or receivable and to be credited to the Principal Account
as of the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units created
by the deposit) and, as to the Income Account, cash or other
property (other than Bonds) received by the Trust as of the date
of the deposit or receivable by the Trust in respect of
distributions declared but not received as of the date of the
deposit, reduced by the amount of any cash or other property
received or receivable on any Bond allocable (in accordance with
the Trustee's calculation of the monthly distribution from the
Income Account pursuant to Section 3.05) to a distribution made
or to be made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units created
by the deposit and the denominator of which is the number of
Units which are outstanding immediately prior to the deposit.
C. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean Xxxxxx Data Corporation and its
successors in interest, or any successor evaluator appointed as
hereinafter provided."
D. 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).
E. 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."
F. 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."
G. The first sentence of Section 3.15. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
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 the amount
set forth under "Summary of Essential Information-
Supervisory Fee" in the Prospectus times the number of Units
outstanding as of the December Record Date of the
immediately preceding year (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 Fund and
other unit investment trust sponsored by the Depositor for
providing such supervisory services in any calendar year
exceed the aggregate cost to the Portfolio Supervisor for
providing such services.
H. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.16.:
"Section 3.16. 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 that
dollar amount set forth in the Prospectus 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 Income and Principal Accounts
shall be insufficient to provide for amounts payable pursuant to
this Section 3.16, 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 3.16,
provided, however, that Zero Coupon Obligations may not be sold
to pay for amounts payable pursuant to this Section 3.16.
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.
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank (National Association), Xxxxxx Data Corporation
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
XXXXXX DATA CORPORATION, Evaluator
(SEAL) By Xxxxx Xxxxxxx
Chief Operating Officer
Attest:
Xxxxxxx Xxxxxxxx
Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Xxxxxx X. Xxxxx
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 137
(Note: Incorporated herein and made a part hereof is the
"Portfolio" as set forth for each Trust in the
Prospectus.)
