Exhibit 1.1
XXX XXXXXX UNIT TRUSTS, SERIES 843
TRUST AGREEMENT
Dated: February 20, 2009
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The
Bank of New York Mellon, as Trustee and Ibbotson Associates, Inc., as
Supervisor, sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Standard Terms and Conditions
of Trust For Xxx Xxxxxx Focus Portfolios, Effective for Unit Investment Trusts
Established On and After May 2, 2001 (Including Xxx Xxxxxx Focus Portfolios
Series 284 and Subsequent Series)" (the "Standard Terms and Conditions of
Trust") and such provisions as are set forth in full and such provisions as are
incorporated by reference constitute a single instrument. All references herein
to Articles and Sections are to Articles and Sections of the Standard Terms and
Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Trustee and Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein incorporated
by reference in their entirety and shall be deemed to be a part of this
instrument as fully and to the same extent as though said provisions had been
set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities listed in the Schedule hereto have been deposited in
trust under this Trust Agreement.
2. The fractional undivided interest in and ownership of the Trust
represented by each Unit thereof referred to in Section 1.01(56) is initially an
amount the numerator of which is one and the denominator of which is the amount
set forth under "Units outstanding" for the Trust in the "Statement of
Condition" in the Prospectus.
3. The aggregate number of Units described in Section 2.03(a) for the Trust
is that number of Units set forth under "Units outstanding" for the Trust in the
"Statement of Condition" in the Prospectus.
4. Section 1.01(5) is replaced in its entirety by the following:
"(5) "Business Day" shall mean any day on which the New York Stock Exchange
is open for regular trading."
5. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Distribution Dates" set forth in the
"Essential Information" in the Prospectus.
6. The terms "Capital Account Record Date" and "Income Account Record Date"
shall mean the "Record Dates" set forth in the "Essential Information" in the
Prospectus.
7. The term "Deferred Sales Charge Payment Date" shall mean July 10, 2009,
and the 10th day of each month thereafter through November10, 2009.
8. The term "Fund Shares" shall mean shares of an investment company
registered under the Investment Company Act of 1940, as amended, which are
deposited in the Trust.
9. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" for the Trust set forth in the "Essential Information" in the
Prospectus.
10. The "Supervisor" shall mean Ibbotson Associates, Inc. and its
successors in interest, or any successor portfolio supervisor appointed as
provided in the Standard Terms and Conditions of Trust.
11. The term "Trustee" shall mean The Bank of New York Mellon and its
successors in interest or any successor trustee appointed as provided in the
Standard Terms and Conditions of Trust.
12. The second sentence of section 2.01(b) is hereby deleted.
13. Section 3.05 is amended by adding the following subsection immediately
after Section 3.05(a)(iv):
"(v) Notwithstanding any of the previous provisions, if the Trust has
elected to be taxed as a regulated investment company under the United
States Internal Revenue Code of 1986, as amended, the Trustee is directed
to make any distribution or take any action necessary in order to maintain
the qualification of the Trust as a regulated investment company for
federal income tax purposes or to provide funds to make any distribution
for a taxable year in order to avoid imposition of any income or excise
taxes on the Trust or on undistributed income in the Trust."
14. Section 3.07(a)(xiii) of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"(xiii) if the Trust has elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended, that such sale is necessary or advisable (i) to
maintain the qualification of the Trust as a regulated investment company
or (ii) to provide funds to make any distribution for a taxable year in
order to avoid imposition of any income or excise taxes on the Trust or on
undistributed income in the Trust; or
(xiv) that as result of the ownership of the Security, the Trust or
its Unitholders would be a direct or indirect shareholder of a passive
foreign investment company as defined in section 1297 (a) of the United
States Internal Revenue Code of 1986, as amended."
15. If the Trust has elected to be treated as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, the first two sentences in the second paragraph of Section 3.11 of the
Standard Terms and Conditions of Trust shall be replaced in their entirety with
the following:
"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 with respect to the Securities (including but not limited to
the making of any demand, direction, request, giving of any notice, consent
or waiver or the voting with respect to any amendment or supplement to any
indenture, resolution, agreement or other instrument under or pursuant to
which the Securities have been issued) the Trustee shall:
(a) with respect to the Fund Shares, promptly notify the Depositor and
shall thereupon take such action or refrain from taking any action, as
appropriate, so as to insure that such Fund Shares are voted as closely as
possible in the same manner and the same general proportion, with respect
to all issues, as are the shares of such Fund Shares held by owners other
than the Trust; or
(b) with respect to Securities other than Fund Shares, at the
direction of the Depositor, vote for or against, or accept or reject, any
offer for new or exchanged securities or property in exchange for a Trust
Security. Should any issuance, exchange or substitution be effected, any
securities, cash and/or property received shall be deposited hereunder and
shall be promptly sold, if securities or property, by the Trustee pursuant
to the Depositor's direction, unless the Depositor advises the Trustee to
keep such securities or property."
16. If the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, Section 3.12(a) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"(a) The Replacement Securities shall be Zero Coupon Obligations or
Equity Securities as originally selected for deposit in the Trust or
securities which the Depositor determines to be similar in character as
Securities originally selected for deposit in the Trust, and any
Replacement Securities which are Zero Coupon Obligations must have the same
maturity value as the Failed Contract Security and, as close as is
reasonably practical, the same maturity date, which must be on or prior to
the Mandatory Termination Date;"
17. The Standard Terms and Conditions of Trust shall be amended to include
the following section:
"Section 3.19. Regulated Investment Company Election. If the
Prospectus for a Trust states that such Trust intends to elect to be
treated and to qualify as a "regulated investment company" as defined in
the United States Internal Revenue Code of 1986, as amended, the Trustee is
hereby directed to make such elections and take all actions, including any
appropriate election to be taxed as a corporation, as shall be necessary to
effect such qualification or to provide funds to make any distribution for
a taxable year in order to avoid imposition of any income or excise tax on
the Trust or on undistributed income in the Trust. The Trustee shall make
such reviews of each Trust portfolio as shall be necessary to maintain
qualification of a particular Trust as a regulated investment company and
to avoid imposition of tax on a Trust or undistributed income in a Trust,
and the Depositor and Supervisor shall be authorized to rely conclusively
upon such reviews."
18. The first paragraph of Section 4.01 is hereby replaced with the
following:
"Section 4.01. Compensation. As compensation for providing supervisory
portfolio services under this Indenture, the Trust will accrue daily and
pay to the Supervisor at the end of each calendar quarter an aggregate
annual fee in an amount equal to 0.25% of the average daily Trust
Evaluation (described in Section 6.01)."
19. Sections 5.01(b) and (c) are replaced in their entirety by the
following:
"(b) During the initial offering period of the Trust (as determined by
the Depositor), the Evaluation for each Security shall be made in the
following manner: (i) with respect to Securities for which market
quotations are readily available, such Evaluation shall be made on the
basis of the market value of such Securities; and (ii) with respect to
other Securities' such Evaluation shall be made on the basis of the fair
value of such Securities as determined in good faith by the Trustee. If the
Securities are listed on a national or foreign securities exchange and
market quotations of such Securities are readily available, the market
value of such Securities shall generally be based on the last available
closing sale price on or immediately prior to the Evaluation Time on the
exchange or market which is the principal market therefor, which shall be
deemed to be the New York Stock Exchange if the Securities are listed
thereon. In the case of Fund Shares not listed on a national or foreign
securities exchange, such Evaluation shall be made on the basis of the
current net asset value of such shares as determined by the issuers of such
Fund Shares. In the case of Zero Coupon Obligations, such Evaluation shall
be made on the basis of current offer side prices for the Zero Coupon
Obligations as obtained from investment dealers or brokers who customarily
deal in securities comparable to those held by the Trust and, if offer side
prices are not available for the Zero Coupon Obligations, on the basis of
offer side price for comparable securities, by determining the valuation of
the Zero Coupon Obligations on the offer side of the market by appraisal or
by any combination of the above. If the Trust holds Securities denominated
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 Trustee deems such prices inappropriate as a basis for
valuation). For each Evaluation, the Trustee shall also confirm and furnish
to the Depositor the calculation of the Trust Evaluation to be computed
pursuant to Section 6.01.
(c) After the initial offering period of Units of the Trust (as
determined by the Depositor), Evaluation of the Securities shall be made in
the manner described in Section 5.01(b) on the basis of the current net
asset value of Fund Shares not listed on a national or foreign securities
exchange, as determined by the issuers of the Fund Shares, the current bid
side prices for Zero Coupon Obligations and the bid side value of any
relevant currency exchange rate expressed in U.S. dollars."
20. The seventh paragraph of Section 6.02 is hereby replaced in its
entirety with the following:
"Notwithstanding anything to the contrary in this Section 6.02, if the
Prospectus for a Trust provides for in kind distribution of Securities in
connection with Unit redemptions and a Unitholder tenders at least the
minimum number of Units stated in such Prospectus for redemption, a
Unitholder may request at the time of tender to receive from the Trustee in
lieu of cash such Unitholder's pro rata share of each Security then held by
such Trust, provided that the Security is principally traded in the United
States if such limitation is set forth in the Prospectus for the Trust.
Such tendering Unitholder will receive his pro rata number of whole shares
of each of such Securities comprising the portfolio of such Trust and cash
from the Capital Account equal to the value of the fractional shares and
any Securities principally traded outside the United States to which such
tendering Unitholder is entitled and in the case of an Equity and Treasury
Trust such Unitholder's pro rata share of the Zero Coupon Obligations held
by such Trust. Such pro rata share of each Security and the related cash to
which such tendering Unitholder is entitled is referred to herein as an "In
Kind Distribution." An In Kind Distribution will be made by the Trustee
through the distribution of each of the Securities in book-entry form to
the account of the Unitholder's bank or broker-dealer at Depository Trust
Company. If funds in the Capital Account are insufficient to cover the
required cash distribution to the tendering Unitholder, the Trustee may
sell Securities according to the criteria discussed herein.
Notwithstanding the preceding paragraph, if a Unitholder electing an
In Kind Distribution is an Affiliated Redeeming Unitholder, as such term is
defined below, such In Kind Distribution shall be permitted subject to the
following conditions:
(a) The In Kind Distribution shall be consistent with the Trust's
redemption policies and undertakings, as set forth in the Trust's
Prospectus;
(b) Neither the Affiliated Redeeming Unitholder, nor any other party
with the ability and the pecuniary incentive to influence the In Kind
Distribution, may select, or influence the selection of, the distributed
Securities;
(c) Upon an In Kind Distribution by the Affiliated Redeeming
Unitholder, the Trustee shall distribute to the Affiliated Redeeming
Unitholder its proportionate share of every Security in the Trust's
portfolio, provided that if the Trustee is not an affiliated person (as the
term "affiliated person" is defined in the Investment Company Act of 1940,
as amended) of the Affiliated Redeeming Unitholder, the Trustee may exclude
Discretionary Assets (as defined below) from the In Kind Distribution to
the extent that the Trustee cannot practicably distribute such
Discretionary Assets without undue burden or adverse impact to the Trust or
its Unitholders. If the Trustee determines that it is impracticable to
distribute the Discretionary Assets in kind, the Trustee shall sell or
liquidate the Discretionary Assets to raise funds to satisfy the
redemption, provided that if the Trustee cannot sell or liquidate the
Discretionary Assets, the Trustee may sell or liquidate other Securities;
(d) The In Kind Distribution may not favor the Affiliated Redeeming
Unitholder to the detriment of any other Unitholder;
(e) The Trustee shall monitor each In Kind Distribution on a quarterly
basis for compliance with all provisions of this Section 6.02; and
(f) The Trustee shall maintain and preserve for a period of not less
than six years from the end of the fiscal year in which the In Kind
Distribution occurs, the first two years in an easily accessible place,
records for each In Kind Distribution setting forth the identity of the
Affiliated Redeeming Unitholder, a description of the composition of the
Trust's portfolio (including each asset's value) immediately prior to the
In Kind Distribution, a description of each Security distributed in-kind,
the terms of the In Kind Distribution, the information or materials upon
which the asset valuations were made, and a description of the composition
of the Trust's portfolio (including each asset's value) one month after the
In Kind Distribution.
The term "Affiliated Redeeming Unitholder" shall mean an affiliated
person or a promoter of or a principal underwriter for the Trust, or an
affiliated person of such a person, promoter or principal underwriter. The
terms "affiliated person," "promoter" and "principal underwriter" as used
in the preceding sentence shall have the meanings assigned to each such
term in the Investment Company Act of 1940, as amended.
The term "Discretionary Assets" shall mean (i) securities that, if
distributed, would be required to be registered under the Securities Act of
1933, as amended; (ii) securities issued by entities in countries that (A)
restrict or prohibit the holding of securities by non-nationals other than
through qualified investment vehicles, or (B) permit transfers of ownership
of securities to be effected only by transactions conducted on a local
stock exchange; and (iii) any assets that, although they may be liquid and
marketable, must be traded through the marketplace or with the counterparty
to the transaction in order to effect a change in beneficial ownership.
Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, no Unitholder may elect to have Units redeemed through
an In Kind Distribution within thirty (30) days of any Trust termination."
21. The second sentence of Section 7.01(e)(2)(E) shall be replaced in its
entirety by "Such Prospectus shall also contain disclosure concerning the
Depositor's responsibilities described in (D) above."
22. The Trustee's annual compensation rate described in Section 7.04 shall
be that amount set forth under "Trustee's fee and operating expenses" in the
"Fee Table" in the Prospectus.
23. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the Trustee shall waive or offset fees otherwise payable by
the Trust pursuant to Section 3.05 in an amount equal to any compensation
(including, but not limited to, fees paid pursuant to a plan adopted by the
issuer of a Security under Rule 12b-1 under the Investment Company Act of 1940)
received by the Depositor, the Trustee or any Affiliated Person of the Depositor
or Trustee from the issuer of a Security in connection with the Trust's
investment in such Security. The term "Affiliated Person" shall mean "affiliated
person" as that term is defined in section 2 of the Investment Company Act of
1940 and rules promulgated thereunder.
24. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, if the Trustee sells, redeems or otherwise liquidates Fund
Shares pursuant to Section 6.02 to satisfy Unit redemptions or pursuant to
Section 7.04 to pay Trust expenses, the Trustee shall do so, as nearly as
practicable, on a pro rata basis among all Fund Shares held by the Trust.
25. Section 9.01 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 9.01. Amendments. (a) This Indenture may be amended from time
to time by the Depositor and Trustee or their respective successors,
without the consent of any of the Unitholders, (i) to cure any ambiguity or
to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provision contained herein, (ii)
to make such other provision in regard to matters or questions arising
hereunder as shall not materially adversely affect the interests of the
Unitholders or (iii) to make such amendments as may be necessary (a) for
the Trust to continue to qualify as a regulated investment company for
federal income tax purposes if the Trust has elected to be taxed as such
under the United States Internal Revenue Code of 1986, as amended, or (b)
to prevent the Trust from being deemed an association taxable as a
corporation for federal income tax purposes if the Trust has not elected to
be taxed as a regulated investment company under the United States Internal
Revenue Code of 1986, as amended. This Indenture may not be amended,
however, without the consent of all Unitholders then outstanding, so as (1)
to permit, except in accordance with the terms and conditions hereof, the
acquisition hereunder of any Securities other than those specified in the
Schedules to the Trust Agreement or (2) to reduce the aforesaid percentage
of Units the holders of which are required to consent to certain of such
amendments. This Indenture may not be amended so as to reduce the interest
in the Trust represented by Units (whether evidenced by Certificates or
held in uncertificated form) without the consent of all affected
Unitholders.
(b) Except for the amendments, changes or modifications as provided in
Section 9.01(a) hereof, neither the parties hereto nor their respective
successors shall consent to any other amendment, change or modification of
this Indenture without the giving of notice and the obtaining of the
approval or consent of Unitholders representing at least 66 2/3% of the
Units then outstanding of the Trust. Nothing contained in this Section
9.01(b) shall permit, or be construed as permitting, a reduction of the
aggregate percentage of Units the holders of which are required to consent
to any amendment, change or modification of this Indenture without the
consent of the Unitholders of all of the Units then outstanding of the
Trust and in no event may any amendment be made which would (1) alter the
rights to the Unitholders as against each other, (2) provide the Trustee
with the power to engage in business or investment activities other than as
specifically provided in this Indenture, (3) adversely affect the tax
status of the Trust for federal income tax purposes or result in the Units
being deemed to be sold or exchanged for federal income tax purposes or (4)
unless the Trust has elected to be taxed as a regulated investment company
for federal income tax purposes, result in a variation of the investment of
Unitholders in the Trust.
(c) Unless the Depositor directs that other notice shall be provided,
the Trustee shall include in the annual report provided pursuant to Section
3.06 notification of the substance of such amendment."
26. Section 9.02 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 9.02. Termination. This Indenture and the Trust created
hereby shall terminate upon the maturity, redemption, sale or other
disposition as the case may be of the last Security held in the Trust
hereunder unless sooner terminated as hereinbefore specified, and may be
terminated at any time by the written consent of Unitholders representing
at least 66 2/3% of the Units of the Trust then outstanding; provided that
in no event shall the Trust continue beyond the Mandatory Termination Date.
Upon the date of termination the registration books of the Trustee shall be
closed.
In the event of a termination, the Trustee shall proceed to liquidate
the Securities then held and make the payments and distributions provided
for hereinafter in this Section 9.02 based on such Unitholder's pro rata
interest in the balance of the Capital and Income Accounts after the
deductions herein provided. Written notice shall be given by the Trustee in
connection with any termination to each Unitholder at his address appearing
on the registration books of the Trustee and in connection with a Mandatory
Termination Date such notice shall be given no later than 45 days before
the Mandatory Termination Date. Included with such notice shall be a form
to enable Unitholders owning that number of Units referred to in the
Prospectus to request an In Kind Distribution (as described in Section
6.02) during the period ending 31 days prior to date of the related Trust's
termination. No Unitholder shall be permitted to have Units redeemed
through an In Kind Distribution within 30 days of any Trust termination.
The Trustee will liquidate the Securities then held, if any, in such
daily amounts as the Depositor shall direct. The Depositor shall direct the
liquidation of the Securities in such manner as to effectuate orderly sales
and a minimal market impact. In the event the Depositor does not so direct,
the Securities shall be sold within a reasonable period and in such manner
as the Trustee, in its sole discretion, shall determine. The Trustee shall
not be liable for or responsible in any way for depreciation or loss
incurred by reason of any sale or sales made in accordance with the
Depositor's direction or, in the absence of such direction, in the exercise
of the discretion granted by this Section 9.02. The Trustee shall deduct
from the proceeds of these sales and pay any tax or governmental charges
and any brokerage commissions in connection with such sales. Amounts
received by the Trustee representing the proceeds from the sales of
Securities shall be credited to the related Capital Account.
Not later than the fifth Business Day following receipt of all
proceeds of sale of the Securities, the Trustee shall:
(a) deduct from the Income Account of the Trust or, to the extent that
funds are not available in such Account of the Trust, from the Capital
Account of the Trust, and pay to itself individually an amount equal to the
sum of (i) its accrued compensation for its ordinary recurring services,
(ii) any compensation due it for its extraordinary services in connection
with such Trust, and (iii) any costs, expenses or indemnities in connection
with such Trust as provided herein;
(b) deduct from the Income Account of the Trust or, to the extent that
funds are not available in such Account, from the Capital Account of the
Trust, and pay accrued and unpaid fees of the Depositor, the Supervisor and
counsel in connection with the Trust, if any;
(c) deduct from the Income Account of the Trust or the Capital Account
of the Trust any amounts which may be required to be deposited in the
Reserve Account and any other amounts which may be required to meet
expenses incurred under this Indenture in connection with the Trust;
(d) make final distributions from the Trust, against surrender for
cancellation of all of each Unitholder's Certificate or Certificates, if
issued, as follows:
(i) to each Unitholder, such Unitholder's pro rata share of the
cash balances of the Income and Capital Accounts; and
(ii) on the conditions set forth in Section 3.04 hereof, to each
Unitholder such Unitholder's pro rata share of the balance of the
Reserve Account; and
(e) within 60 days after the distribution to each Unitholder as
provided for in (d), furnish to each such Unitholder a final distribution
statement, setting forth the data and information in substantially the form
and manner provided for in Section 3.06 hereof.
The Trustee shall be under no liability with respect to moneys held by
it in the Income, Reserve and Capital Accounts of a Trust upon termination
except to hold the same in trust within the meaning of the Investment
Company Act of 1940, without interest until disposed of in accordance with
the terms of this Indenture."
27. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the Supervisor shall deliver to the Depositor such notices,
analyses, reports and other information regarding the Securities in a Trust as
the Depositor may reasonably request, which shall include, but not be limited
to, the following:
(a) a written research report containing analysis of each Security and
the market sectors of such Security delivered to the Depositor within a
reasonable time following the end of each calendar quarter;
(b) monthly teleconferences to discuss matters relating to the
Securities;
(c) prompt written notification of any decline in market price of a
Security equal to or greater than (i) fifteen percent (15%) during any
single Business Day; (ii) twenty-five percent (25%) during any period of
ten (10) Business Days; (iii) thirty percent (30%) during any period of
fifteen (15) Business Days; or (iv) forty percent (40%) during any period
of twenty (20) Business Days;
(d) prompt written notification of the occurrence of any of the
conditions set forth in Section 3.07 with respect to a Security and written
instructions describing the action recommended to be taken in connection
therewith; and
(e) prompt written notification of the announcement or occurrence of
any event described in the second paragraph of Section 3.11 or any other
corporate action related to a Security.
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to be
executed; all as of the day, month and year first above written.
XXX XXXXXX FUNDS INC.
By: /s/ XXXX X. XXXXXXX
---------------------------
Executive Director
IBBOTSON ASSOCIATES, INC.
By: /s/ XXXX XXXX
---------------------------
President
THE BANK OF NEW YORK MELLON
By: /s/ XXXXXXX XXXXXX
---------------------------
Assistant Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX UNIT TRUSTS, SERIES 843
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus.]
