EXHIBIT 1.1
XXXXXX UNIT INVESTMENT TRUSTS
SERIES 109
TRUST AGREEMENT
This Trust Agreement dated as of May 3, 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 set forth in the section captioned
"Essential Information" in the final Prospectus of the Trust (the
"Prospectus") contained in Amendment No. 1 to the Trust's Registration
Statement (Registration No. 333-59544) as filed with the Securities and
Exchange Commission on May 3, 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.
(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
Nasdaq-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 Nasdaq-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:
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"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):
(x) "that the Security has been removed from the Nasdaq-100
Index; or
(xi) that computer program output operated independent of the
Depositor which tracks the Nasdaq-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 Nasdaq-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 Nasdaq-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 Nasdaq-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:
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"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 Nasdaq-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 Nasdaq-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 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 Nasdaq-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
Nasdaq-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 Nasdaq-100 Index, and
the percentage weightings of such components, as existed on the last date
on which the Nasdaq-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.
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(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 of .25% of the average daily net asset value of 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 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
---------------------------
President
THE BANK OF NEW YORK,
Trustee
By /s/ XXXXXXX BIESLAND
---------------------------
Vice President
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
XXXXXX UNIT INVESTMENT TRUSTS
SERIES 109
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth in the Prospectus.)
