FT 853
TRUST AGREEMENT
Dated: June 17, 2004
The Trust Agreement among First Trust Portfolios, L.P., as
Depositor, JPMorgan Chase Bank, as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions by
reference to the document entitled "Standard Terms and Conditions
of Trust for The First Trust Special Situations Trust, Series 22
and certain subsequent Series, Effective November 20, 1991"
(herein called the "Standard Terms and Conditions of Trust"), and
such provisions as are incorporated by reference constitute a
single instrument. Effective June 27, 2002, Nike Securities
L.P., a party to the Standard Terms and Conditions of Trust,
changed its name to First Trust Portfolios, L.P. All references
herein to Articles and Sections are to Articles and Sections of
the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
EQUITY INCOME SELECT PORTFOLIO, SERIES 3
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit 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 Percentage Ratio on the Initial Date of Deposit is
as set forth in the Prospectus under "Schedule of Investments."
D. The Record Date shall be as set forth in the prospectus
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. First Trust Advisors L.P.'s compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee in the amount of $.0080 per Unit.
H. 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 $.0096 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.
I. The Initial Date of Deposit for the Trust is June 17,
2004.
J. The minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
K. 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.
PART III
A. Notwithstanding anything to the contrary in the
Standard Terms and Conditions of Trust, references to subsequent
Series established after the date of effectiveness of the First
Trust Special Situations Trust, Series 22 shall include the FT
Series to which this Trust Agreement relates.
B. Notwithstanding anything to the contrary in the
Prospectus, parties to the trust agreement are hereby advised:
The Trusts are not sponsored, endorsed, sold or
promoted by Dow Xxxxx & Company, Inc. ("Dow Xxxxx"). Dow
Xxxxx makes no representation or warranty, express or
implied, to the owners of the Trusts or any member of the
public regarding the advisability of investing in securities
generally or in the Trusts particularly. Dow Xxxxx' only
relationship to the Sponsor is the licensing of certain
trademarks, trade names and service marks of Dow Xxxxx and
of the Dow Xxxxx Industrial AverageSM , which is determined,
composed and calculated by Dow Xxxxx without regard to the
Sponsor or the Trusts. Dow Xxxxx has no obligation to take
the needs of the Sponsor or the owners of the Trusts into
consideration in determining, composing or calculating to
Dow Xxxxx Industrial AverageSM. Dow Xxxxx is not
responsible for and has not participated in the
determination of the timing of, prices at, or quantities of
the Trusts to be issued or in the determination or
calculation of the equation by which the Trusts are to be
converted into cash. Dow Xxxxx has no obligation or
liability in connection with the administration, marketing
or trading of the Trusts.
DOW XXXXX DOES NOT GUARANTEE THE ACCURACY AND/OR THE
COMPLETENESS OF THE DOW XXXXX INDUSTRIAL AVERAGESM OR ANY
DATA INCLUDED THEREIN AND DOW XXXXX SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW
XXXXX MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY THE SPONSOR, OWNERS OF THE TRUSTS, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE DOW XXXXX
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW
XXXXX MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY
DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE DOW XXXXX
INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. WITHOUT
LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW XXXXX
HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT,
PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES, EVEN IF NOTIFIED
OF THE POSSIBILITY THEREOF.
C. The term "Principal Account" as set forth in the
Standard Terms and Conditions of Trust shall be replaced with the
term "Capital Account."
D. Section 1.01(1) shall be amended to read as follows:
"(1) "Depositor" shall mean First Trust Portfolios,
L.P. and its successors in interest, or any successor
depositor appointed as hereinafter provided."
E. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean JPMorgan Chase Bank, 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 JPMorgan Chase Bank.
F. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
G. 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."
H. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
I. Section 1.01(27) shall be added to read as follows:
"(27) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Rollover Notification Date" shall be defined as set
forth in the Prospectus under "Summary of Essential
Information."
J. Section 1.01(28) shall be added to read as follows:
"(28) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Rollover Distribution" shall be defined as set forth
in Section 5.05, herein."
K. Section 1.01(29) shall be added to read as follows:
"(29) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Distribution Agent" shall refer to the Trustee acting
in its capacity as distribution agent pursuant to
Section 5.05 herein."
L. Section 1.01(30) shall be added to read as follows:
"(30) If the Prospectus for a Trust contemplates the
rollover of Units as set forth in Section 5.05 herein, the
term "Special Redemption and Liquidation Period" shall be as
set forth in the Prospectus under "Summary of Essential
Information."
M. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(b)(1)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 (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchased in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur within 20 days from the date of a
failure occurring within such initial 90-day period) shall
maintain exactly the Percentage Ratio existing immediately
prior to such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this 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 Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital 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 Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions 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. Cash represented by a foreign currency shall
be replicated in such currency or, if the Trustee has
entered into a contract for the conversion thereof, in U.S.
dollars in an amount replicating the dollars to be received
on such conversion."
N. The following shall be added immediately following the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for
any Letter(s) of Credit deposited with the Trustee in
connection with the deposits described in Section 2.01(a)
and (b) cash in an amount sufficient to satisfy the
obligations to which the Letter(s) of Credit relates. Any
substituted Letter(s) of Credit shall be released by the
Trustee."
O. Section 2.01(c) of the Standard Terms and Conditions of
Trust is hereby amended by adding the following at the conclusion
thereof:
"If any Contract Obligation requires settlement in
a foreign currency, in connection with the deposit of such
Contract Obligation the Depositor will deposit with the
Trustee either an amount of such currency sufficient to
settle the contract or a foreign exchange contract in such
amount which settles concurrently with the settlement of the
Contract Obligation and cash or a Letter of Credit in U.S.
dollars sufficient to perform such foreign exchange
contact."
P. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
Q. 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. Subject to reimbursement
as hereinafter provided, the cost of organizing the Trust
and the sale of the Trust Units shall be borne by the
Depositor, provided, however, that the liability on the part
of the Depositor under this section shall not include any
fees or other expenses incurred in connection with the
administration of the Trust subsequent to the deposit
referred to in Section 2.01. At the conclusion of the
period of time during which a Trust's organization expenses
will be included in the Public Offering Price of Units (the
"Organization Expense Period"), as set forth in the
Prospectus for a Trust (as certified by the Depositor to the
Trustee), the Trustee shall withdraw from the Account or
Accounts specified in the Prospectus or, if no Account is
therein specified, from the Capital Account, and pay to the
Depositor the Depositor's reimbursable expenses of
organizing the Trust in an amount certified to the Trustee
by the Depositor. In no event shall the amount paid by the
Trustee to the Depositor for the Depositor's reimbursable
expenses of organizing the Trust exceed the estimated per
Unit amount of organization costs set forth in the
Prospectus for the Trust multiplied by the number of Units
of the Trust outstanding at the conclusion of the
Organization Expense Period; nor shall the Depositor be
entitled to or request reimbursement for expenses of
organizing the Trust incurred after the conclusion of the
Organization Expense Period. If the cash balance of the
Capital Account is insufficient to make such withdrawal, the
Trustee shall, as directed by the Depositor, sell Securities
identified by the Depositor, or distribute to the Depositor
Securities having a value, as determined under Section 4.01
as of the date of distribution, sufficient for such
reimbursement. Securities sold or distributed to the
Depositor to reimburse the Depositor pursuant to this
Section shall be sold or distributed by the Trustee, to
extent practicable, in the percentage ratio then existing.
The reimbursement provided for in this section shall be for
the account of the Unit holders of record at the conclusion
of the Organization Expense Period. Any assets deposited
with the Trustee in respect of the expenses reimbursable
under this Section 3.01 shall be held and administered as
assets of the Trust for all purposes hereunder. The
Depositor shall deliver to the Trustee any cash identified
in the Statement of Net Assets of the Trust included in the
Prospectus not later than the expiration of the Delivery
Period and the Depositor's obligation to make such delivery
shall be secured by the letter of credit deposited pursuant
to Section 2.01. Any cash which the Depositor has
identified as to be used for reimbursement of expenses
pursuant to this Section 3.01 shall be held by the Trustee,
without interest, and reserved for such purpose and,
accordingly, prior to the conclusion of the Organization
Expense Period, shall not be subject to distribution or,
unless the Depositor otherwise directs, used for payment of
redemptions in excess of the per Unit amount payable
pursuant to the next sentence. If a Unit holder redeems
Units prior to the conclusion of the Organization Expense
Period, the Trustee shall pay to the Unit holder, in
addition to the Redemption Value of the tendered Units,
unless otherwise directed by the Depositor, an amount equal
to the estimated per Unit cost of organizing the Trust set
forth in the Prospectus, or such lower revision thereof most
recently communicated to the Trustee by the Depositor
pursuant to Section 5.01, multiplied by the number of Units
tendered for redemption; to the extent the cash on hand in
the Trust is insufficient for such payment, the Trustee
shall have the power to sell Securities in accordance with
Section 5.02. As used herein, the Depositor's reimbursable
expenses of organizing the Trust shall include the cost of
the initial preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture, and other documents relating
to the Trust, SEC and state blue sky registration fees, the
cost of the initial valuation of the portfolio and audit of
the Trust, the initial fees and expenses of the Trustee, and
legal and other out-of-pocket expenses related thereto, but
not including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses."
R. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. 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."
S. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Capital
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Capital Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) if provided
for in the Prospectus for a Trust, the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the third
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
T. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
U. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
V. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended by deleting Section
3.05.I.(d) and replacing Section 3.05.I.(b) with the following:
"Section 3.05.I.(b) deduct from the Income Account or,
to the extent funds are not available in such Account, from
the Capital Account and pay to First Trust Advisors L.P. the
amount that it is entitled to receive pursuant to Section
4.03."
W. Section 3.07 of the Standard Terms and Conditions of
Trust is amended to delete the word "and" at the end of Section
3.07(f) and replace Section 3.07(g) with the following:
"(g) that such sale is required due to Units tendered for
redemption;
(h) that the sale of Securities is necessary or advisable
in order to maintain the qualification of the Trust as a
"regulated investment company" in the case of a Trust which has
elected to qualify as such; and
(i) that there has been a public tender offer made for a
Security or a merger or acquisition is announced affecting a
Security, and that in the opinion of the Sponsor the sale or
tender of the Security is in the best interest of the Unit
holders."
X. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
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. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Capital Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall provide to all Unit holders of such Trust
notices of such acquisition in the Trustee's annual report
unless prior notice is directed by the Depositor."
Y. Article III of the Standard Terms and Conditions of
Trust is hereby amended by deleting Section 3.13 and replacing it
with the following:
"Section 3.13. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus (the "Deferred Sales Charge
Payment Dates"), withdraw from the Capital Account, an
amount per Unit specified in such Prospectus and credit such
amount to a special non-Trust account designated by the
Depositor out of which the deferred sales charge will be
distributed to or on the order of the Depositor on such
Deferred Sales Charge Payment Dates (the "Deferred Sales
Charge Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account, provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. In the
absence of such direction by the Depositor, the Trustee
shall sell Securities sufficient to pay the deferred sales
charge (and any unreimbursed advance then outstanding) in
full, and shall select Securities to be sold in such manner
as will maintain (to the extent practicable) the relative
proportion of number of shares of each Security then held.
The proceeds of such sales, less any amounts paid to the
Trustee in reimbursement of its advances, shall be credited
to the Deferred Sales Charge Account. If a Unit holder
redeems Units prior to full payment of the deferred sales
charge, the Trustee shall, if so provided in the related
Prospectus and, except for situations in which the Trust
Fund Evaluation determined as provided in Section 5.01
hereof has been reduced by the amount of any unpaid accrued
deferred sales charge, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g), the Trustee shall, if so provided
in the related Prospectus on the termination of the Trust,
withhold from the proceeds payable to Unit holders an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated pursuant to Section 6.01(g), the
Trustee shall not withhold from the proceeds payable to Unit
holders any amounts of unpaid deferred sales charges. If
pursuant to Section 5.02 hereof, the Depositor shall
purchase a Unit tendered for redemption prior to the payment
in full of the deferred sales charge due on the tendered
Unit, the Depositor shall pay to the Unit holder the amount
specified under Section 5.02, which amount, except for
situations in which the Trust Fund Evaluation determined as
provided in Section 5.01 hereof has been reduced by the
amount of any unpaid accrued deferred sales charge, shall be
reduced by the unpaid portion of the deferred sales charge.
All advances made by the Trustee pursuant to this Section
shall be secured by a lien on the Trust prior to the
interest of the Unit holders. If the related Prospectus
provides that the deferred sales charge shall accrue on a
daily basis, the "unpaid portion of the deferred sales
charge" as used in this paragraph shall mean the accrued and
unpaid deferred sales charge as of the date of redemption or
termination, as appropriate. The Depositor represents that
the price paid by any Unit holder for Units acquired through
reinvestment of Trust distributions will be reduced by the
aggregate amount of unpaid deferred sales charge at the time
of the purchase to off set any subsequent collection by the
Depositor of deferred sales charge in respect of the Units
so acquired."
Z. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.14:
"Section 3.14. Creation and Development Fee. If the
Prospectus related to the Trust specifies a creation and
development fee, the Trustee shall, at the conclusion of the
primary offering period for a Trust, as certified by the
Depositor to the Trustee withdraw from the Capital Account, an
amount equal to the entire creation and development fee and
credit such amount to a special non-Trust account designated by
the Depositor out of which the creation and development fee will
be distributed to the Depositor (the "Creation and Development
Account"). The payment provided for in this section shall be for
the account of Unit holders of record at the conclusion of the
primary offering period and shall have no effect on the net asset
value of Trust Units prior to such date. If the balance in the
Capital Account is insufficient to make such withdrawal, the
Trustee shall, as directed by the Depositor, advance funds in an
amount required to fund the proposed withdrawal and be entitled
to reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and credit
the proceeds thereof to the Creation and Development Account,
provided, however, that the aggregate amount advanced by the
Trustee at any time for payment of the creation and development
fee shall not exceed $15,000. Such direction shall, if the
Trustee is directed to sell a Security, identify the Security to
be sold and include instructions as to the execution of such
sale. In the absence of such direction by the Depositor, the
Trustee shall sell Securities sufficient to pay the creation and
development fee (and any unreimbursed advance then outstanding)
in full, and shall select Securities to be sold in such manner as
will maintain (to the extent practicable) the relative proportion
of number of shares of each Security then held. The proceeds of
such sales, less any amounts paid to the Trustee in reimbursement
of its advances, shall be credited to the Creation and
Development Account. If the Trust is terminated pursuant to
Section 6.01(g), the Depositor agrees to reimburse Unitholders
for any amounts of the Creation and Development Fee collected by
the Depositor to which it is not entitled. All advances made by
the Trustee pursuant to this Section shall be secured by a lien
on the Trust prior to the interest of Unit holders. The
Depositor agrees to reimburse the Trust and any Unit holder any
amount of Creation and Development Fee it receives which exceeds
the amount which the Depositor may receive under applicable laws,
regulations and rules."
AA. Article III of the Standard Terms and Conditions of
Trust is hereby amended by adding the following new Section 3.15:
"Section 3.15. Foreign Currency Exchange. Unless the
Depositor shall otherwise direct, whenever funds are
received by the Trustee in foreign currency, upon the
receipt thereof or, if such funds are to be received in
respect of a sale of Securities, concurrently with the
contract of the sale for the Security (in the latter case
the foreign exchange contract to have a settlement date
coincident with the relevant contract of sale for the
Security), the Trustee shall enter into a foreign exchange
contract for the conversion of such funds to U.S. dollars
pursuant to the instruction of the Depositor. The Trustee
shall have no liability for any loss or depreciation
resulting from action taken pursuant to such instruction."
BB. Article IV of the Standard Terms and Conditions of
Trust is hereby replaced with the following:
"ARTICLE IV
Evaluation of Securities; Compensation for Evaluation; Portfolio
Supervision and Bookkeeping and Administrative Services;
Succession
Section 4.01. Evaluation of Securities (a) First
Trust Advisors L.P., acting in its capacity as Evaluator, shall
determine separately, shall promptly furnish to the Trustee, and
shall furnish to the Depositor upon request, the value of each
issue of Securities (including Contract Obligations) (the
"Evaluation") as of the close of trading on the New York Stock
Exchange (generally 4:00 p.m. Eastern time) (the "Evaluation
Time") (i) on each Business Day during the period in which the
Units are being offered for sale to the public and (ii) on any
other day on which a Trust Fund Evaluation is to be made pursuant
to Section 5.01 or which is requested by the Depositor or the
Trustee. As part of the Trust Evaluation, the Evaluator shall
determine separately and promptly furnish to the Trustee, and to
the Depositor upon request, the Evaluation of each issue of
Securities initially deposited in the Trust on the Initial Date
of Deposit. The Evaluator's determination of the offering prices
of the Securities on the Initial Date of Deposit shall be
included in Schedule A attached to the Trust Agreement.
(b) During the initial offering period, namely, from
the date of effectiveness of the Registration Statement under the
Securities Act of 1933 relating to the Units to and including the
day which is designated in writing by the Depositor to the
Trustee and Evaluator as the conclusion of such period, such
Evaluation shall be made in the following manner: if the
Securities are listed on a national or foreign securities
exchange or The Nasdaq Stock Market, such Evaluation shall
generally be based on the closing sale price on the exchange or
system which is the principal market therefor, which shall be
deemed to be the New York Stock Exchange if the Securities are
listed thereon (unless the Evaluator deems such price
inappropriate as a basis for evaluation), or if there is no
closing sale price on such exchange or system, at the closing ask
prices. For purposes of valuing Securities traded on The Nasdaq
Stock Market, closing sale price shall mean the Nasdaq Official
Closing Price ("NOCP") as determined by Nasdaq. If the
Securities are not so listed or, if so listed and the principal
market therefor is other than on an exchange, the Evaluation
shall generally be based on the current ask price on the over-the-
counter market (unless the Evaluator deems such price
inappropriate as a basis for evaluation). If current ask prices
are unavailable, the evaluation is generally determined (a) on
the basis of current ask prices for comparable securities, (b) by
appraising the value of the Securities on the ask side of the
market, or (c) any combination of the above. If such prices are
in a currency other than U.S. dollars, the Evaluation of such
Security shall be converted to U.S. dollars based on current
offering side exchange rates, unless the Security is in the form
of an American Depositary Share or Receipt, in which case the
Evaluations shall be based upon the U.S. dollar prices in the
market for American Depositary Shares or Receipts (unless the
Evaluator deems such prices inappropriate as a basis for
evaluation). As used herein, the closing sale price is deemed to
mean the most recent closing sale price on the relevant
securities exchange immediately prior to the Evaluation Time.
For each Evaluation, the Evaluator shall also confirm and furnish
to the Trustee and the Depositor, on the basis of the information
furnished to the Evaluator by the Trustee as to the value of all
Trust assets other than Securities, the calculation of the Trust
Fund Evaluation to be computed pursuant to Section 5.01. For the
purposes of the foregoing, the Evaluator may obtain current
prices for the Securities from investment dealers or brokers
(including the Depositor) that customarily deal in similar
securities.
(c) After the initial offering period and both during
and after the initial offering period, for purposes of the Trust
Fund Evaluations required by Section 5.01 in determining
Redemption Value and Unit Value, Evaluation of the Securities
shall be made in the manner described in Section 4.01(b), on the
basis of current bid prices for Zero Coupon Obligations (if any),
the bid side value of the relevant currency exchange rate
expressed in U.S. dollars and, except in those cases in which the
Securities are listed on a national or foreign securities
exchange or The Nasdaq Stock Market and the closing sale prices
are utilized, on the basis of the current bid prices of the
Equity Securities. In addition, the Evaluator shall reduce the
Evaluation of each Security by the amount of any liquidation
costs (other than brokerage costs incurred on any national
securities exchange) and any capital gains or other taxes which
would be incurred by the Trust upon the sale of such Security,
such taxes being computed as if the Security were sold on the
date of the Evaluation.
Section 4.02. Information for Unit Holders. For the
purpose of permitting Unit holders to satisfy any reporting
requirements of applicable federal or state tax law, First Trust
Advisors L.P., acting in its capacity as Evaluator, shall make
available to the Trustee and the Trustee shall transmit to any
Unit holder upon request any determinations made by it pursuant
to Section 4.01.
Section 4.03. Compensation for Services Provided. As
compensation for providing portfolio supervisory services in its
capacity as Portfolio Supervisor, evaluation services in its
capacity as Evaluator, and for providing bookkeeping and other
administrative services to the Trust 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 provided hereunder by the Trustee,
First Trust Advisors L.P. shall receive, in arrears, against a
statement or statements therefor 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 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
First Trust Advisors L.P. 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 for such services rendered
to unit investment trusts of which the Depositor is the sponsor
in any calendar year exceed the aggregate cost to First Trust
Advisors L.P. of supplying such services in such year. 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 an invoice therefor from First Trust
Advisors L.P., which shall constitute the representation by First
Trust Advisors L.P. that the bookkeeping and administrative
services for which compensation is claimed are properly
compensable hereunder and that the aggregate cost incurred by
First Trust Advisors L.P. of providing portfolio supervisory,
evaluation and bookkeeping and administrative services 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.
If the cash balance in the Income and Capital Accounts shall
be insufficient to provide for amounts payable pursuant to this
Section 4.03, 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 4.03.
Any moneys payable to First Trust Advisors L.P. pursuant to
this Section 4.03 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 herein.
Section 4.04. Liability of the Evaluator. The Trustee, the
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, the 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.
Section 4.05. Resignation and Removal of Portfolio
Supervisor and/or Evaluator and/or provider of bookkeeping
services described in Section 4.03; Successor. (a) First Trust
Advisors L.P. and any successor appointed as hereafter provided,
in its capacity as Evaluator and/or Portfolio Supervisor and/or
provider of bookkeeping services described in Section 4.03, may
resign and be discharged hereunder by executing an instrument of
resignation in writing and filing the same with the Depositor and
the Trustee, not less than 60 days before the date specified in
such instrument when, subject to Section 4.05(e), such
resignation is to take effect. Upon receiving such notice of
resignation, the Depositor and the Trustee shall use their best
efforts to appoint a successor to act in the capacity as to which
the resignation applies, such successor to have qualifications
and to be compensated at a rate of compensation satisfactory to
the Depositor and the Trustee. Such appointment shall be made by
written instrument executed by the Depositor and the Trustee, in
duplicate, one copy of which shall be delivered to the resigning
party and one copy to the successor. The Depositor or the
Trustee may remove the Evaluator and/or Portfolio Supervisor
and/or party performing bookkeeping and administrative services
at any time upon 30 days' written notice and appoint a successor
to act in the capacity to which the removed applies, such
successor to have qualifications and to be compensated at a rate
of compensation satisfactory to the Depositor and the Trustee,
provided, however, that so long as First Trust Portfolios, L.P.
is acting as Depositor, the Trustee shall have no power to remove
any affiliate of the Depositor who may be acting in any such
capacity or capacities. Such appointment shall be made by
written instrument executed by the Depositor and the Trustee, in
duplicate, one copy of which shall be delivered to the party
removed and one copy to its successor. Notice of such
resignation or removal and appointment of a successor shall be
mailed by the Trustee to each Unit holder then of record.
(b) Any successor evaluator and/or successor portfolio
supervisor and/or provider of bookkeeping and administrative
services described in Section 4.03, as appropriate, appointed
hereunder, shall execute, acknowledge and deliver to the
Depositor and the Trustee an instrument accepting such
appointment hereunder, and such successor without any further
act, deed or conveyance shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder with
like effect as if originally named herein and shall be bound by
all the terms and conditions of this Indenture.
(c) In case at any time the Evaluator and/or Portfolio
Supervisor and/or provider of bookkeeping and administrative
services described in Section 4.03 shall resign and no successor
shall have been appointed and have accepted appointment within 30
days after notice of resignation has been received by the
Depositor and the Trustee, the resigning party may forthwith
apply to a court of competent jurisdiction for the appointment of
a successor. Such court may thereupon after such notice, if any,
as it may deem proper and prescribe, appoint a successor.
(d) Any corporation into which the Evaluator and/or
Portfolio Supervisor and/or provider of bookkeeping and
administrative services described in Section 4.03 hereunder may
be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which
the Evaluator and/or Portfolio Supervisor and/or provider of
bookkeeping and administrative services described in Section 4.03
hereunder shall be a party, shall be the successor under this
Indenture without the execution or filing of any paper,
instrument or further act to be done on the part of the parties
hereto, notwithstanding anything to the contrary contained herein
or in any agreement relating to such merger or consolidation by
which the Evaluator and/or Portfolio Supervisor and/or provider
of bookkeeping and administrative services described in Section
4.03 may seek to retain certain powers, rights and privileges for
any period of time following such merger or consolidation.
(e) Any resignation or removal of the Evaluator and/or
Portfolio Supervisor and/or provider of bookkeeping and
administrative services described in Section 4.03 shall become
effective upon acceptance of appointment by the successor as
provided in subsection (b) hereof."
CC. Section 5.01 is hereby amended to add the following at
the conclusion of the first paragraph thereof:
"Amounts receivable by the Trust in a foreign currency
shall be reported to the Evaluator who shall convert the
same to U.S. dollars based on current exchange rates, in the
same manner as provided in Section 4.01(b) or 4.01(c), as
applicable, for the conversion of the valuation of foreign
Equity Securities, and the Evaluator shall report such
conversion with each Evaluation made pursuant to Section
4.01."
DD. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of Section
5.01 shall be amended by deleting the phrase "and (iii)" and
adding the following "(iii) amounts representing unpaid accrued
organization costs, (iv) if the Prospectus for a Trust provides
that the creation and development fee, if any, accrue on a daily
basis, amounts representing unpaid accrued creation and
development fees, (v) if the Prospectus for a Trust provides that
the deferred sales charge shall accrue on a daily basis, amounts
representing unpaid accrued deferred sales charge, and (vi)"; and
(ii) The following text shall immediately precede the last
sentence of the first paragraph of Section 5.01:
"Prior to the payment to the Depositor of its
reimbursable organization costs to be made at the
conclusion of the Organization Expense Period in
accordance with Section 3.01, for purposes of
determining the Trust Fund Evaluation under this
Section 5.01, the Trustee shall rely upon the amounts
representing unpaid accrued organization costs in the
estimated amount per Unit set forth in the Prospectus
until such time as the Depositor notifies the Trustee
in writing of a revised estimated amount per Unit
representing unpaid accrued organization costs. Upon
receipt of such notice, the Trustee shall use this
revised estimated amount per Unit representing unpaid
accrued organization costs in determining the Trust
Fund Evaluation but such revision of the estimated
expenses shall not effect calculations made prior
thereto and no adjustment shall be made in respect
thereof."
EE. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended by inserting the following paragraph
immediately after the second paragraph of such section:
"The Depositor is authorized to obtain from The NASDAQ Stock
Market, Inc. ("NASDAQ") Mutual Fund Quotation Service ("MFQS") a
unit investment trust ticker symbol for a Trust and to contract
with NASDAQ for the dissemination of the Trust Fund Evaluation
computed by the Trustee pursuant to Section 5.01 of the Standard
Terms and Conditions of Trust through the MFQS, provided,
however, that no such contract shall affect the Trustee's duties
or liabilities without its prior consent. When and as directed
by the Depositor, the Trustee shall cause the Trust Fund
Evaluation to be communicated to MFQS for such purpose. The
Depositor and Trustee shall be reimbursed from the respective
Trust for any cost or expense incurred in connection with the
obtaining of the ticker symbol and the communication to MFQS and
its dissemination of the Trust Fund Evaluation. Neither the
Depositor nor the Trustee shall be liable for any error, omission
or other action of NASDAQ in connection with the dissemination of
the Trust Fund Evaluation, and the Depositor and the Trustee
shall be indemnified by the respective Trust and held harmless
against any loss, liability, claim or expense resulting from any
error, omission or other action of NASDAQ. In no event shall the
Trustee be liable to any person for special, indirect, or
consequential damages of any kind whatsoever resulting from or in
connection with the dissemination of the Trust Fund Evaluation
through MFQS whether or not the Trustee has been advised as to
the possibility of such damages and regardless of the form of
action in which any such claim for damages may be made."
FF. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Subject to the restrictions set forth in the Prospectus
of a Trust, Unit holders of a Trust who redeem that minimum
number of Units of a Trust set forth in Part II of the Trust
Agreement may request a distribution in kind of (i) such
Unit holder's pro rata portion of each of the Securities
listed on a U.S. securities exchange ("U.S. listed
securities") in such Trust, in whole shares, and (ii) cash
equal to such Unit holder's pro rata portion of the Income
and Capital Accounts as follows: (x) a pro rata portion of
the net proceeds of sale of the non U.S. listed Securities
and Securities representing any fractional shares included
in such Unit holder's pro rata share of the Securities and
(y) such other cash as may properly be included in such Unit
holder's pro rata share of the sum of the cash balances of
the Income and Principal Accounts in an amount equal to the
Unit Value determined on the basis of a Trust Fund
Evaluation made in accordance with Section 5.01 determined
by the Trustee on the date of tender less amounts determined
in clauses (i) and (ii)(x) of this Section. Subject to
Section 5.05 with respect to Rollover Unit holders, to the
extent possible, distributions of Securities pursuant to an
in kind redemption of Units shall be made by the Trustee
through the distribution of each of the Securities in book-
entry form to the account of the Unit holder's bank or
broker-dealer at the Depository Trust Company. Any
distribution in kind will be reduced by customary transfer
and registration charges."
GG. The following Section 5.05 shall be added:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Trusts,
(the "New Series"), the Trustee shall, at the Depositor's
sole cost and expense, include in the notice sent to Unit
holders specified in Section 8.02 a form of election whereby
Unit holders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New
Series, may elect to have their Unit(s) redeemed in kind in
the manner provided in Section 5.02, the Securities included
in the redemption distribution sold, and the cash proceeds
applied by the Distribution Agent to purchase Units of a New
Series, all as hereinafter provided. The Trustee shall
honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption
request with respect to uncertificated Units, by its close
of business on the Rollover Notification Date. The notice
and form of election to be sent to Unit holders in respect
of any redemption and purchase of Units of a New Series as
provided in this section shall be in such form and shall be
sent at such time or times as the Depositor shall direct the
Trustee in writing and the Trustee shall have no
responsibility therefor. The Distributions Agent acts
solely as disbursing agent in connection with purchases of
Units pursuant to this Section and nothing herein shall be
deemed to constitute the Distribution Agent a broker in such
transactions
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled during the
Special Redemption and Liquidation Period on such date or
dates specified by Depositor. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
redemption date equal to the net asset value (determined on
the basis of the Trust Fund Evaluation as of the redemption
date in accordance with Section 4.01) multiplied by the
number of Units being redeemed (herein called the "Rollover
Distribution"). Any Securities that are made part of the
Rollover Distribution shall be valued for purposes of the
redemption distribution as of the redemption date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent during
the Special Redemption and Liquidation Period specified in
the Prospectus pursuant to the Depositor's direction, and
the Distribution Agent shall, unless directed otherwise by
the Depositor, employ the Depositor as broker in connection
with such sales. For such brokerage services, the Depositor
shall be entitled to compensation at its customary rates,
provided however, that its compensation shall not exceed the
amount authorized by applicable securities laws and
regulations. The Depositor shall direct that sales be made
in accordance with the guidelines set forth in the
Prospectus under the heading "Special Redemption,
Liquidation and Investment in a New Trust." Should the
Depositor fail to provide direction, the Distribution Agent
shall sell the Securities in the manner provided in the
prospectus. The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon completion of all sales of Securities included in
the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of a New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such Trust. Such contract shall
provide for purchase of the maximum number of Units of a New
Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
Units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of a New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of a New Series
will be uncertificated unless and until the Rollover Unit
holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for loss or depreciation
resulting from any reinvestment made in accordance with this
paragraph, or for any failure to make such reinvestment in
the event the Depositor does not make Units available for
purchase.
(b) Notwithstanding the foregoing, the Depositor may,
in its discretion at any time, decide not to offer any new
Trust Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
HH. Paragraph (e) of Section 6.01 of Article VI of the
Standard Terms and Conditions of Trust is amended to read as
follows:
"(e) (I) Subject to the provisions of subparagraphs
(II) and (III) 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 (i) excuse the Trustee from the
responsibilities specified in subparagraph II below or
(ii) limit the obligation of the Trustee to indemnify the
Trust under subparagraph III 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 affected Trust as set forth in section 6.04 hereof.
(II) 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
(I) 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 Income) the Trust's foreign
securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign securities
transactions, provided that the Trustee hereby agrees to
perform all the duties assigned by rule 17f-5 as now in
effect or as it may be amended in the future, to the boards
of management investment companies. The Trustee's duties
under the preceding sentence will not be delegated.
As used in this subparagraph (II),
(1) "foreign securities" include: securities
issued and sold primarily outside the United States by a
foreign government, a national of any foreign country or a
corporation or other organization incorporated or organized
under the laws of any foreign country and securities issued
or guaranteed by the government of the United States or by
any state or any political subdivision thereof or by any
agency thereof or by any entity organized under the laws of
the United States or of any state thereof which have been
issued and sold primarily outside the United States.
(2) "eligible foreign custodian" means
(a) The following securities depositories and
clearing agencies which operate transnational systems for
the central handling of securities or equivalent book
entries which, by appropriate exemptive order issued by the
Securities and Exchange Commission, have been qualified as
eligible foreign custodians for the Trust but only for so
long as such exemptive order continues in effect: Xxxxxx
Guaranty Trust Company of New York, Brussels, Belgium, in
its capacity as operator of the Euroclear System
("Euroclear"), and Clearstream Banking, Luxembourg.
(b) Any other entity that shall have been
qualified as an eligible foreign custodian for the foreign
securities of the Trust by the Securities and Exchange
Commission by exemptive order, rule or other appropriate
action, commencing on such date as it shall have been so
qualified but only for so long as such exemptive order, rule
or other appropriate action continues in effect.
(III) The Trustee will indemnify and hold the
Trust harmless from and against any loss occurring as a
result of an eligible foreign custodian's willful
misfeasance, reckless disregard, bad faith, or gross
negligence in performing custodial duties."
II. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value of
Securities deposited in such Trust during the initial
offering period, or (ii)"
JJ. Section 6.01(i) of the Standard Terms and Conditions of
Trust shall be deleted in its entirety and replaced with the
following:
"(i) No payment to a Depositor or to any principal
underwriter (as defined in the Investment Company Act of 1940)
for the Trust or to any affiliated person (as so defined) or
agent of a Depositor or such underwriter shall be allowed the
Trustee as an expense except (a) for payment of such reasonable
amounts as the Securities and Exchange Commission may prescribe
as compensation for performing bookkeeping and other
administrative services of a character normally performed by the
Trustee, and (b) such other amounts permitted under the
Investment Company Act of 1940."
KK. The third paragraph of Section 6.02 of the Standard
Terms and Conditions of Trust shall be deleted in its entirety
and replaced with the following:
"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 Section 6.02 of the
Standard Terms and Conditions of Trust."
LL. The first sentence of the second paragraph of Section
6.04 shall be amended to include the phrase "license fees, if
any, expenses incurred in printing and mailing quarterly, semi-
annual or annual communications to Unit holders if the Prospectus
so provides," immediately after the reference to legal and
auditing expenses.
MM. The third sentence of paragraph (a) of Section 6.05 of
the Standard Terms and Conditions of Trust shall be replaced in
its entirety by the following:
"The Depositor may remove the Trustee at any time with or
without cause and appoint a successor Trustee by written
instrument or instruments delivered not less than sixty days
prior to the effective date of such removal and appointment to
the Trustee so removed and to the successor Trustee."
NN. Section 8.02 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The fourth sentence of the second paragraph shall
be deleted and replaced with the following:
"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."
(ii) The first sentence of the fourth paragraph shall
be deleted and replaced with the following:
"Commencing no earlier than the business day following
that date on which Unit holders must submit to the Trustee
notice of their request to receive an in-kind distribution
of Securities at termination, the Trustee will liquidate the
Securities not segregated for in-kind distributions during
such period and in such daily amounts as the Depositor shall
direct."
IN WITNESS WHEREOF, First Trust Portfolios, L.P., JPMorgan
Chase Bank 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.
FIRST TRUST PORTFOLIOS,
L.P., Depositor
By Xxxxx X. Xxxxx
Senior Vice President
JPMORGAN CHASE BANK, Trustee
By Xxxx X. Xxxxxx
Vice President
[SEAL]
ATTEST:
Xxxxxxx Xxxx
Assistant 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
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 853
(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.)
