EXHIBIT 1.1
XXXXXX UNIT INVESTMENT TRUSTS
SERIES 107
TRUST AGREEMENT
This Trust Agreement dated as of April 11, 2001 between Xxxxxx &
Associates, Inc., as Depositor, and The Bank of New York, as Trustee, sets forth
certain provisions in full and incorporates other provisions by reference to the
document entitled "Standard Terms and Conditions of Trust For Equity Trusts
Sponsored by Xxxxxx & Associates, Inc., Effective January 7, 1997" (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.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor and the Trustee 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
this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(1) The equity securities listed in the Schedule hereto have been
deposited in trust under this Trust Agreement as indicated in each Trust
named on the attached Schedule.
(2) For the purposes of the definition of the term "Unit" in Article I,
it is hereby specified that the fractional undivided interest in and
ownership of a Trust is the amount described in the final Prospectus of the
Trust (the "Prospectus") contained in Amendment No. 1 to the Trust's
Registration Statement (Registration No. 333-57748) as filed with the
Securities and Exchange Commission on April 11, 2001. The fractional
undivided interest may (a) increase by the number of any additional Units
issued pursuant to Section 2.03, (b) increase or decrease in connection
with an adjustment to the number of Units pursuant to Section 2.03, or (c)
decrease by the number of Units redeemed pursuant to Section 5.02.
(3) The terms "Income Account Record Date" and "Capital Account Record
Date" shall mean the dates set forth under "Essential Information-Record
and Computation Dates" in the Prospectus.
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(4) The terms "Income Account Distribution Date" and "Capital Account
Distribution Date" shall mean the dates set forth under "Essential
Information-Distribution Dates" in the Prospectus.
(5) The term "Initial Date of Deposit" shall mean the date of this Trust
Agreement as set forth above.
(6) The number of Units of a Trust referred to in Section 2.03 is as set
forth under "Essential Information-Number of Units" in the Prospectus.
(7) For the purposes of Section 6.01(g), the liquidation amount is the
amount set forth under "Essential Information-Minimum Value of Trust under
which Trust Agreement may be Terminated" in the Prospectus.
(8) Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the requisite amount of Units needed to be tendered to
exercise an in kind distribution shall be that amount set forth in the
Prospectus.
(9) Section 1.01(21) is hereby stricken and replaced by the following:
"Percentage Ratio" shall mean, for each Trust which will issue additional
Units pursuant to Section 2.03 hereof, the actual number of shares of each
Equity Security as a percent of all shares of Equity Securities necessary
to cause the Trust portfolio to replicate, to the extent practicable, the
Standard & Poor's LargeCap 100 Index immediately prior to any subsequent
deposit of Securities as determined by computer program output operated
independent of the Depositor which tracks such index."
(10) Section 2.01(b) is hereby amended by adding the following
immediately after the first sentence of the second paragraph of such
Section the following: "Such additional Securities may 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 Securities
in the Trust most under-represented in the Trust's portfolio in comparison
to their percentage weighting in the Standard & Poor's LargeCap 100 Index
as determined by computer program output operated independent of the
Depositor which tracks such index."
(11) The first sentence of Section 2.01(e) is hereby stricken and
replaced with the following:
"If Securities in the Trust are sold pursuant to Sections 3.07 or
8.02 hereof or if there are excess proceeds remaining after meeting
redemption requests pursuant to Section 5.02, and the net proceeds of
any such sale are not otherwise reinvested as provided in such
Sections, the net proceeds of any such sale may be reinvested, if in
the opinion of the Depositor it is in the best interests of the
Unitholders to do so, in short term U.S. Treasury obligations maturing
on or prior to the next succeeding Capital Distribution Date or, if
earlier, December 31 of the year of purchase (the "Reinvestment
Securities")."
(12) Section 3.07(a) is hereby amended by adding the following
subsections immediately after Section 3.07(a)(ix):
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(x) "that the Security has been removed from the Standard &
Poor's LargeCap 100 Index; or
(xi) that computer program output operated independent of the
Depositor which tracks the Standard & Poor's LargeCap 100 Index
indicates that the Security is over-represented in the Trust's
portfolio in comparison to such Security's percentage weighting in
such index."
(13) Section 3.07 is hereby amended by changing the current subsection
(c) to subsection (d) and adding the following as a new subsection (c):
(c) "In the event a Security is sold pursuant to Section
3.07(a)(x), the Depositor may direct the reinvestment of the proceeds
of the sale of such Security, to the extent practicable, into any
security which replaces such Security as a component of the Standard &
Poor's LargeCap 100 Index or, if no security so replaces such
Security, into any other Securities which are under-represented in the
Trust's portfolio in comparison to their percentage weighting in the
Standard & Poor's LargeCap 100 Index as determined by computer program
output operated independent of the Depositor which tracks such index.
In the event a Security is sold pursuant to Section 3.07(a)(xi), the
Depositor may direct the reinvestment of the proceeds of the sale of
such Security, to the extent practicable, into any other Securities
which are under-represented in the Trust's portfolio in comparison to
their percentage weighting in the Standard & Poor's LargeCap 100 Index
as determined by computer program output operated independent of the
Depositor which tracks such index. Without limiting the generality of
the foregoing, in determining whether such reinvestment is
practicable, the Depositor may, but is not obligated to, specifically
consider the ability of the Trust to reinvest such proceeds into round
lots of a Security."
(14) The second paragraph of Section 3.10 is hereby stricken and replaced
with the following:
"In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new securities,
or to exchange securities, for Trust Securities, the Trustee 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; provided, however, if such securities are
components of the Standard & Poor's LargeCap 100 Index, the Depositor
may advise the Trustee to keep such securities. The cash received in
such exchange and cash proceeds of any such sales shall, in the
following priority, be (1) reinvested, to the extent practicable, into
any Securities which are under-represented in the Trust's portfolio in
comparison to their percentage weighting in the Standard & Poor's
LargeCap 100 Index as determined by computer program output operated
independent of the Depositor which tracks such index or (2)
distributed to Unitholders on the next Distribution Date in the manner
set forth in Section 3.04(b) regarding distributions from the Capital
Account. Without limiting the generality of the foregoing, in
determining whether such reinvestment is practicable, the Depositor
may, but is not obligated to, specifically consider the ability of the
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Trust to reinvest such proceeds into round lots of a Security. Except
as provided in Article VIII, the Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of
any such rejection or sale."
(15) Section 5.02 is hereby amended by adding the following immediately
after the last sentence of the second paragraph of such Section:
"If Securities in the Trust are sold for the payment of the
Redemption Value and there are excess proceeds remaining after meeting
redemption requests, the Depositor may, but is not obligated to,
instruct the Trustee to reinvest such excess proceeds into any
Securities which are under-represented in the Trust's portfolio in
comparison to their percentage weighting in the Standard & Poor's
LargeCap 100 Index as determined by computer program output operated
independent of the Depositor which tracks such index."
(16) Notwithstanding anything to the contrary herein, if at any time the
Standard & Poor's LargeCap 100 Index shall no longer be compiled,
maintained or made available, the Depositor may (a) direct that the Trust
created hereby continue to be operated hereunder utilizing the components
of the Standard & Poor's LargeCap 100 Index, and the percentage weightings
of such components, as existed on the last date on which the Standard &
Poor's LargeCap 100 Index components and weightings were available to the
Trust or (b) direct the Trustee to terminate this Indenture and the Trust
created hereby and liquidate the Trust in such manner as the Depositor
shall direct.
(17) The following Section 3.16 is hereby added to the Standard Terms and
Conditions of Trust immediately following Section 3.15:
"Section 3.16. Creation and Development Fee. If the Prospectus
related to the Trust specifies a creation and development fee, the
Trustee shall, on or immediately after the fifteenth day of each
month, withdraw from the Capital Account, an amount equal to the
accrued and unpaid creation and development fee as of such date 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 creation and development fee will accrue on a daily basis at the
annual rate set forth in the Prospectus for the Trust. 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. 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 8.02, 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
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advances made by the Trustee pursuant to this Section shall be secured
by a lien on the Trust prior to the interest of Unitholders.
Notwithstanding the foregoing, the Depositor shall not receive any
amount of Creation and Development Fee which, when added to any other
sales charge imposed, exceeds the maximum amount per Unit stated in
the Prospectus. The Depositor shall notify the Trustee, not later
than ten business days prior to the date on which it anticipates that
the maximum amount of Creation and Development Fee it may receive has
been accrued and shall also notify the Trustee as of the date when the
maximum amount of Creation and Development Fee has been accrued. The
Trustee shall have no responsibility or liability for damages or loss
resulting from any error in the information in the preceding sentence.
The Depositor agrees to reimburse the Trust and any Unitholder any
amount of Creation and Development Fee it receives which exceeds the
amount which the Depositor may receive under applicable laws,
regulations and rules."
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed.
XXXXXX & ASSOCIATES, INC.,
Depositor
By /s/ XXXXX X. XXXXXXXXX
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President
THE BANK OF NEW YORK,
Trustee
By /s/ XXXXXXX XXXXXXXX
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Vice President
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
XXXXXX UNIT INVESTMENT TRUSTS
SERIES 107
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
