EXHIBIT 1.1
ADVISORS DISCIPLINED TRUST 972
TRUST AGREEMENT
Dated: January 24, 2013
This Trust Agreement among Advisors Asset Management, Inc., as Depositor,
Evaluator and Supervisor, and The Bank of New York Mellon, 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 Advisor's
Disciplined Trust, Effective for Unit Investment Trusts Investing in Equity
Securities Established On and After August 5, 2004 (Including Advisor's
Disciplined Trust, Series 13 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, Evaluator 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 Schedules hereto have been deposited in
trust under this Trust Agreement.
2. The Trustee is authorized and instructed to enter into, on behalf of the
Trust, the confirmations related to the Bond Option Transactions for the Options
set forth in Schedule A and all agreements incident thereto including, but not
limited to the 2006 ISDA Definitions, the 2002 ISDA Master Agreement, the 1994
ISDA Credit Support Annex and the Collateral Account Control Agreement among the
Trust, Societe Generale and The Bank of New York Mellon, as
securities intermediary (the "Option Agreements") and to consummate the
transactions contemplated in the Option Agreements as provided in Section
2.01(g).
3. The fractional undivided interest in and ownership of the Trust
represented by each Unit thereof is a fractional amount, the numerator of which
is one and the denominator of which is the amount set forth under "Understanding
Your Investment--Statement of Financial Condition--Number of Units" in the
Prospectus for the Trust.
4. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, all Units will be held in uncertificated form and
Unitholders may not request a certificate representing his or her Units.
5. The aggregate number of Units described in Section 2.03(a) for the Trust
is that number of Units set forth under "Understanding Your Investment--
Statement of Financial Condition--Number of Units" in the Prospectus for the
Trust.
6. The term "Distribution Date" shall mean the "Distribution Dates" set
forth under "Investment Summary--Essential Information" in the Prospectus for
the Trust.
7. The term "First Settlement Date" shall mean the third Business Day
following the Initial Date of Deposit.
8. The term "Mandatory Termination Date" shall mean the "Termination Date"
set forth under "Investment Summary-Essential Information" in the Prospectus for
the Trust.
9. The term "Record Date" shall mean the "Record Dates" set forth under
"Investment Summary--Essential Information" in the Prospectus for the Trust.
10. Section 1.01(1) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Depositor' shall mean Advisors Asset Management, Inc. and its successors
in interest, or any successor depositor appointed as hereinafter provided."
11. Section 1.01(2) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Trustee' shall mean The Bank of New York Mellon and its successors in
interest, or any successor trustee appointed as hereinafter provided."
12. Section 1.01(3) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Evaluator' shall mean Advisors Asset Management Inc., and its successors
in interest, or any successor evaluator appointed as hereinafter provided."
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13. Section 1.01(4) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Supervisor' shall mean Advisors Asset Management Inc., and its successors
in interest, or any successor evaluator appointed as hereinafter provided."
14. Section 1.01(32) is replaced in its entirety with the following:
"'Percentage Ratio' shall mean with respect to a Trust, the percentage
relationship among the Securities based on the notional amount of each Option
per Unit and the principal amount of each Bond per Unit compared to all
Securities attributable to each Unit existing immediately prior to the related
additional deposit of Securities. The Percentage Ratio shall be adjusted to the
extent necessary, and may be rounded, to reflect the occurrence of an event
which affects the capital structure of the issuer of a security."
15. Section 1.01(42) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Securities' shall mean the Bonds, Options, Contract Securities, delivery
statements relating to `when-issued' and/or `regular way' contracts, if any, for
the purchase of certain Securities and certified bank check or checks or Letter
of Credit or Letters of Credit sufficient in amount or availability required for
such purchase, deposited in irrevocable trust and listed in the schedule(s) to
the Trust Agreement or which are deposited in or purchased on behalf of a Trust
pursuant to Section 2.01(b) hereof or as otherwise permitted hereby, and any
securities received in exchange, substitution or replacement for such
securities, as may from time to time continue to be held as part of a Trust.
16. Section 1.01 of the Standard Terms and Conditions of Trust is amended by
adding the following subsection immediately after Section 1.01(54):
"(55) 'Options' shall mean any put, call, straddle, option or privilege
on a security or other asset, or on a group or index of securities or other
assets (including any interest therein or based on the value thereof including
delivery statements related to contracts, if any, for the purchase of certain
securities and cash, certified or bank check or checks or letter of credit or
letters of credit sufficient in amount or availability required for such
purchase, deposited in irrevocable trust and listed on Schedule A of the Trust
Agreement, and any securities received in addition to, or in exchange,
substitution or replacement for, such securities pursuant to Sections 2.01, 3.11
and 3.12 hereof, as may from time to time continue to be held as a part of the
Trust).
(56) 'Bonds' shall mean debt obligations, including delivery statements
relating to `when issued' and/or `regular way' contracts, if any, for the
purchase of certain bonds and cash, certified or bank checks or checks or letter
of credit or letters of credit sufficient in amount or availability required for
such purchase, deposited in irrevocable trust and listed in Schedule A of the
Trust Agreement, and any obligations received in addition to, or in exchange,
substitution or replacement for, such obligations pursuant to Sections 2.01,
3.11, 3.12 and 3.19 hereof, as may from time to time continue to be held as part
of the Trust."
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17. Section 2.01(a) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(a) The Depositor, on the date of the Trust Agreement, has deposited, or
has caused to be deposited, with the Trustee in trust the Securities listed in
the Schedules attached to the Trust Agreement in bearer form or duly endorsed in
blank or accompanied by all necessary instruments of assignment and transfer in
proper form to be held, managed and applied by the Trustee as herein provided.
The Depositor shall deliver to the Trustee the Securities listed on said
Schedules which were represented by Contract Securities within 90 calendar days
after the date of the Trust Agreement (the "Delivery Period"). If a contract
for such Contract Securities is terminated a party thereto for any reason beyond
the control of the Depositor or if for any other reason the Securities to be
delivered pursuant to such contract are not delivered to the Trust by the end of
the Delivery Period, the Trustee shall immediately draw on the Letter of Credit,
if any, in its entirety, apply the moneys in accordance with Section 2.01(d),
and the Depositor shall forthwith take the remedial action specified in
Section 3.12. If the Depositor does not take the action specified in
Section 3.12 within 90 calendar days of the end of the Delivery Period, the
Trustee shall forthwith take the action specified in Section 3.12."
18. The first paragraph under Section 2.01(b) of the Standard Terms and
Conditions of Trust is replaced in its entirety with the following:
"(b) From time to time following the Initial Date of Deposit, the
Depositor is hereby authorized, in its discretion, to assign, convey to and
deposit, or as caused to be deposited, with the Trustee (i) additional
Securities, duly endorsed in blank or accompanied by all necessary instruments
of assignment and transfer in proper form (or purchase contracts relating to
Contract Securities), and/or (ii) 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. 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. The Depositor may act as broker or agent 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, except by reason of its own gross negligence, lack of good faith or
willful misconduct."
19. Section 2.01 of the Standard Terms and Conditions of Trust is amended
by adding the following subsection immediately after Section 2.01(f):
"(g) The Trustee is authorized and instructed to enter into, on behalf of
the Trust, the Option Agreements and to consummate the transactions contemplated
in such Option Agreements. The Trustee represents that all representations made
by the Trustee in the Option Agreements are accurate. The Trustee agrees to
take all actions and assume all responsibilities specifically imposed upon the
Trustee by the Option Agreements. The Depositor shall have negotiated the terms
of the Option Agreements and may act for the Trust in all matters arising
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under the Option Agreements and in all transactions involving the purchase, sale
or other disposition of Options. The Trustee shall have no responsibility or
liability for the form, validity or sufficiency of the Option Agreements or for
the terms, price, value or validity of any Option transaction. The Trustee, on
behalf of the Trust, is authorized and instructed to grant a security interest
in and lien on any Securities in connection with the Option Agreements."
20. Section 3.02 of the Standard Terms and Conditions of Trust is replaced
in its entirety with the following:
"Section 3.02. Income Account. The Trustee shall collect the interest or
other like cash distributions on the Securities in each Trust as such becomes
payable (including all moneys representing penalties for the failure to make
timely payments on the Securities, or as liquidated damages for default or
breach of any condition or term of the Securities or of the underlying
instrument relating to any Securities and other income attributable to a Failed
Contract Security for which no Replacement Security has been obtained pursuant
to Section 3.12 hereof and interest accrued but unpaid prior to the date of
deposit of the Securities) in trust and including that part of the proceeds of
the sale, liquidation, redemption, prepayment or maturity of any Bonds or
insurance payments thereon which represent interest thereon and credit such
income to a separate account for each Trust to be known as the "Income Account."
Any distributions received by the Trustee in a form other than cash (other
than a non-taxable distribution of the shares of the distributing entity) shall
be dealt with in the manner described in Section 3.11 and shall be retained or
disposed of by a Trust according to those provisions. The proceeds of sale
credited to the Income Account of the Trust. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by reason of any such
sale."
21. Section 3.05(a) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(a) The Trustee, as of the First Settlement Date shall advance from its
own funds and shall pay to the Unitholders of a Trust then of record the amount
of interest accrued on the Bonds deposited in such Trust. The Trustee shall be
entitled to reimbursement for such advancement from interest received by the
respective Trust before any further distributions shall be made from the Income
Account to Unitholders of the Trust. The Trustee shall also advance from its
own funds and pay the appropriate persons the amount of any interest which
accrues on any "when, as and if issued" or "delayed delivery" Bonds deposited in
a Trust from the First Settlement Date to the respective dates of delivery to
the Trust of any such Bonds. Subsequent distributions shall be made as
hereinafter provided. Subsequent distributions of funds from the Income Account
of a Trust shall be made on the applicable Record Dates of a Trust as described
herein.
On or immediately after each Record Date, the Trustee shall satisfy itself
as to the adequacy of the Reserve Account, making any further credits thereto as
may appear appropriate in accordance with Section 3.04 and shall then with
respect to each Trust:
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(i) deduct from the Income Account or, to the extent funds are not
available
in such Account, from the Capital Account and pay to itself individually
the amounts that it is at the time entitled to receive pursuant to
Section 7.04;
(ii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to counsel, as
hereinafter provided for, an amount equal to unpaid fees and expenses, if
any, of such counsel pursuant to Section 3.08, as certified to by the
Depositor; and
(iii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to, or reserve
for, the Depositor the amount that it is entitled to receive pursuant to
Section 3.13."
22. Section 3.05 of the Standard Terms and Conditions of Trust is amended by
adding the following subsection immediately after Section 3.05(a)(iii):
"(iv) Notwithstanding any of the previous provisions, if a 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."
23. Section 3.05(b)(ii) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(ii) For the purpose of this Section 3.05, the Unitholder's "Income
Distribution" shall be equal to such Unitholder's pro rata share of the cash
balance in the Income Account computed as of the business on the Record Date
immediately preceding such Income Distribution after deduction of (1) the fees
and expenses then deductible pursuant to Section 3.05(a) and (2) 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."
24. The first paragraph of section 3.05(b)(i) of the Standard Terms and
Conditions of Trust shall be replaced in its entirety with the following:
"On each Distribution Date, the Trustee shall distribute to each Unitholder
of record at the close of business on the preceding Record Date an amount per
Unit equal to such Unitholder's Income Distribution (as defined below) plus such
Unitholder's pro rata share of the balance of the Capital Account (except for
monies on deposit therein required to purchase Contract Securities or to
purchase Securities contracted for pursuant to the Depositor's purchase
instructions) computed as of the close of business on the Record Date
immediately preceding such Distribution Date, provided, however, the Trustee
shall not be required to make a distribution from the Capital Account unless the
amount available for distribution shall equal at least $1.00 per Unit.
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25. The first paragraph of section 3.06 of the Standard Terms and
Conditions of Trust shall be replaced in its entirety with the following:
"With each distribution from the Income or Capital Accounts of a Trust the
Trustee shall set forth, either in the instrument by means of which payment of
such distribution is made or in an accompanying statement, the amount being
distributed from each such account and, if from the Income Account, the amount
of accrued interest (uncollected and not available for distribution) on the
Record Date for such distribution, each expressed as a dollar amount per Unit."
26. Section 3.06(a)(1) of the Standard Terms and Conditions of Trust shall
be replaced in its entirety with the following:
"(1) the amount of income received on the Securities including amounts
received as a portion of the proceeds of any disposition of Securities and
accreted original discount on the Bonds;"
27. Section 3.07 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 3.07. Sale of Securities. (a) If necessary, in order to maintain
the sound investment character of a Trust, the Depositor may direct the Trustee
to sell or liquidate Securities in such Trust at such price and time and in such
manner as shall be determined by the Depositor, provided that the Supervisor has
determined, if appropriate, that any one or more of the following conditions
exist with respect to the Securities to be sold:
(i) that there has been a default on any of the Securities in the
payment of principal, interest, or other payments on or related to such
Securities when due and payable;
(ii) that any action or proceeding has been instituted at law or
equity seeking to restrain or enjoin any payment that becomes payable on
the Options under any Option Agreement, or that there exists any legal
question or impediment affecting such Options or payments that become
payable under the Option Agreements;
(iii) that there has occurred any breach of covenant or warranty in any
document relating to the issuer of the Securities which would adversely
affect either immediately or contingently the payment of any amounts
payable under any Option Agreement for the Options, or the debt service on
the Bonds, or the general credit standing of the issuer or otherwise impair
the sound investment character of such Securities;
(iv) that there has been a default in the payment of interest,
principal of or income or premium, if any, on any other outstanding
obligations of the issuer or guarantor of such Securities;
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(v) that the price of any Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Supervisor,
as evidenced in writing to the Trustee, the retention of such Securities
would be detrimental to the Trust and to the interest of the Unitholders;
(vi) that all of the Securities in the Trust will be sold pursuant to
termination of the Trust pursuant to Section 9.02 hereof;
(vii) that such sale is required due to Units tendered for redemption;
(viii) 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 Supervisor the sale or tender of the Security is in the best
interest of the Unitholders;
(ix) with respect to an Index Trust, that the Security has been
removed from the Trust's Target Index;
(x) with respect to an Index Trust, that the Security is over-
represented in the Trust's portfolio in comparison to such Security's
weighting in the Trust's Target Index;
(xi) if the Trust has not elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended, that the sale of such Securities is required in order
to prevent the Trust from being deemed an association taxable as a
corporation for federal income tax purposes;
(xii) 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;
(xiii) 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.
(xiv) that any action or proceeding has been instituted in law or
equity seeking to restrain or enjoin the payment of principal or interest
on any Bonds, attacking the constitutionality of any enabling legislation
or alleging and seeking to have judicially determined the illegality of the
issuing body or the constitution of its governing body or officers, the
illegality, irregularity or omission of any necessary acts or proceedings
preliminary to the issuance of such Bonds, or seeking to restrain or enjoin
the performance by the officers or employees of any such issuing body of
any improper or illegal act in connection with the administration of funds
necessary for debt service on
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such Bonds or otherwise; or that there exists any other legal question or
impediment
affecting such Securities or the payment of debt service on the same;
(xv) that any Bonds are the subject of an advanced refunding. For the
purposes of this Section 3.07(a)(xv), "an advanced refunding" shall mean
when refunding bonds are issued and the proceeds thereof are deposited in
an irrevocable trust to retire the Bonds on or before their redemption
date;
(xvi) that as of any Record Date any of the Bonds are scheduled to be
redeemed and paid prior to the next succeeding Distribution Date; provided,
however, that as the result of such redemption the Trustee will receive
funds in an amount sufficient to enable the Trustee to include in the next
distribution from the Capital Account at least $1.00 per Unit; or
(xvii) that such sale is required to satisfy amounts payable pursuant to
any Option Agreement.
(b) In the event a Security is sold pursuant to Section 3.07(a)(v) as a
direct result of serious adverse credit factors affecting the issuer of such
Security and 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, then the Depositor may, but is not obligated, to direct the
reinvestment of the proceeds of the sale of such Security in any other
securities which meet the criteria necessary for inclusion in such Trust on the
Initial Date of Deposit.
(c) In the event a Security is sold pursuant to Section 3.07(a)(ix) and 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, 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 Trust's Target 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 weighting in the Trust's Target Index. In the
event a Security is sold pursuant to Section 3.07(a)(x) and 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, 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 weighting in the Trust's Target 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.
(d) Upon receipt of such direction from the Depositor, upon which the
Trustee shall rely, the Trustee shall proceed to sell or liquidate the specified
Securities in accordance with such direction, and upon the receipt of the
proceeds of any such sale or liquidation, after deducting therefrom any fees and
expenses of the Trustee connected with such sale or liquidation and any
brokerage charges, taxes or other governmental charges shall deposit such net
proceeds in the applicable Capital Account; provided, however, that the Trustee
shall not liquidate or sell any Bonds upon receipt of a direction from the
Depositor pursuant to Section 3.07(a)(xvi), unless the Trustee shall receive on
account of such sale or liquidation the full principal amount of such
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Bonds, plus the premium, if any, and the interest accrued and to accrue thereon
to the date of the redemption of such Bonds.
(e) The Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale made pursuant to any such
direction or by reason of the failure of the Depositor to give any such
direction, and in the absence of such direction the Trustee shall have no duty
to sell or liquidate any Securities under this Section 3.07."
28. Section 3.09 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 3.09. Notice and Sale by Trustee. If at any time any amount
payable to a Trust under any Option Agreement shall not have been paid, or the
principal or interest on any of the Bonds shall be in default and not paid or
provisions for payment thereof shall not have been duly made, within thirty
days, the Trustee shall notify the Depositor thereof. If within thirty days
after such notification the Depositor has not given any instruction to sell or
to hold or has not taken any other action in connection with such Securities,
the Trustee may in its discretion sell such Securities forthwith, and the
Trustee shall not be liable or responsible in any way for depreciation or loss
incurred by reason of such sale."
29. Section 3.11 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"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 holders of 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 matter
relating to the Securities), the Trustee shall promptly notify the Depositor and
shall thereupon take such action or refrain from taking any action as the
Depositor shall in writing direct; provided, however, that if the Depositor
shall not within five Business Days of the giving of such notice to the
Depositor direct the Trustee to take or refrain from taking any action, the
Trustee shall take such action or refrain from taking any action as it, in its
sole discretion, shall deem advisable with respect to the Options and Bonds.
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 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. The Depositor may rely on the
Supervisor in so advising the Trustee. The cash received in such exchange and
cash proceeds of any such sales shall, in the following priority, be (1) with
respect to an Index Trust, reinvested, to the extent practicable, into any
Securities which are underrepresented in the Trust's portfolio in comparison to
their weighting in the Trust's Target Index or (2) with respect to all Trusts,
distributed to Unitholders in the manner set forth in Section 3.05. Without
limiting the generality of the foregoing, in determining whether
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reinvestment is practicable with respect to an Index Trust, the Depositor may,
but is not obligated to, specifically consider the ability of the Index Trust to
reinvest such proceeds into round lots of a Security.
Neither the Depositor nor the Trustee shall be liable to any person for any
action or failure to take action with respect to this Section 3.11."
30. 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 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;"
31. The third paragraph of Section 3.13 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.13 shall be secured
by a lien on the related Trust in favor of the Depositor prior to the interest
of Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 7.04 herein. To the extent of such
lien, the Trustee shall hold the assets of the Trust for the benefit of the
Depositor, provided that the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary course of the
administration of the Trust without regard to such lien."
32. The Depositor's annual compensation as set forth under Section 3.13
shall be that dollar amount per Unit set forth under "Investment Summary--Fees
and Expenses--Annual operating expenses--Supervisory, evaluation and
administration fees" in the Prospectus for the Trust.
33. Section 3.14 of the Standard Terms and Conditions of Trust is hereby
amended by adding the following immediately after the second paragraph:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.14 shall be secured
by a lien on the related Trust in favor of the Depositor prior to the interest
of Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 7.04 herein. To the extent of such
lien, the Trustee shall hold the assets of the Trust for the benefit of the
Depositor, provided that the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary course of the
administration of the Trust without regard to such lien."
34. Section 3.15 of the Standard Terms and Conditions of Trust is hereby
amended by adding the following immediately after the first paragraph:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.15 shall be secured
by a lien on the related Trust in
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favor of the Depositor prior to the interest of Unitholders, but no such lien
shall be prior to any lien in favor of the Trustee under the provisions of
Section 7.04 herein. To the extent of such lien, the Trustee shall hold the
assets of the Trust for the benefit of the Depositor, provided that the Trustee
is authorized to make dispositions, distributions and payments for expenses in
the ordinary course of the administration of the Trust without regard to such
lien."
35. The Standard Terms and Conditions of Trust shall be amended to include
the following sections:
"Section 3.18. 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 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
Section 3.19. Refunding Bonds. In the event that an offer shall be made
by an obligor of any of the Bond in a Trust to issue new obligations in exchange
and substitution for any issue of Bonds pursuant to a plan for the refunding or
refinancing of such Bonds, the Depositor shall instruct the Trustee in writing
to reject such offer and either to hold or sell such Bonds, except that if
(1) the issuer is in default with respect to such Bonds or (2) in the opinion of
the Depositor, given in writing to the Trustee, the issuer will probably default
with respect to such Bonds in the reasonably foreseeable future, the Depositor
shall instruct the Trustee in writing to accept or reject such offer or take any
other action with respect thereto as the Depositor may deem proper. Any
obligation so received in exchange shall be deposited hereunder and shall be
subject to the terms and conditions of this Indenture to the same extent as the
Bonds originally deposited hereunder. Within five days after such deposit,
notice of such exchange and deposit shall be given by the Trustee to each
Unitholder of such Trust, including an identification of the Bonds eliminated
and the securities substituted therefor.
Section 3.20. Trustee Not Required to Amortize. Nothing in this
Indenture, or otherwise, shall be construed to require the Trustee to make any
adjustments between the Income and Capital Accounts of any Trust by reason of
any premium or discount in respect of any of the Bonds."
36. Section 5.01 of Standard Terms and Conditions of Trust shall be replaced
in its entirety with the following:
Section 5.01. Evaluation of Securities. (a) The Evaluator shall determine
separately, and shall promptly furnish to the Trustee and the Depositor upon
request, the value of each issue of Securities (including Contract Securities)
("Evaluation") as of the Evaluation Time (i) on each
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Business Day during the period which the Units are being offered for sale to the
public and (ii) on any other day on which a Trust Evaluation is to be made
pursuant to Section 6.01 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 the Depositor upon request the Evaluation of
each issue of Securities initially deposited in a 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 the Schedules attached to
the Trust Agreement.
(b) During the initial offering period of a Trust (as determined by the
Depositor) such Evaluation shall be made in the following manner: if the
Securities are listed on a national or foreign securities exchange, such
Evaluation shall generally be based on the last available closing sale price at
or immediately prior to the Evaluation Time on the exchange 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 such available
closing sale price on such exchange or market at the last available ask or
offering prices of the Securities. If the Securities are not so listed or, if
so listed and the principal market therefor is other than on such exchange, or
if there is no such available sale price on such exchange or if the Evaluator
determines that such price is inappropriate as a basis for evaluation, such
Evaluation shall generally be based on the following methods or any combination
thereof whichever the Evaluator deems appropriate:
(i) in the case of Options, on the basis of the Evaluator's good
faith determination of the Options' fair value at its reasonable discretion
taking into consideration factors including, but not limited to, (1) the
net amount to be paid or received by the Trust in connection with an early
termination of Options as determined pursuant to the Option Agreements on
the valuation date by the counterparty to the Options, (2) current ask
prices for the Options as obtained from investment dealers or brokers who
customarily deal in options comparable to the Options held by the Trust,
(3) ask prices for comparable options or securities and (4) by any
combination of the above; and
(ii) in the case of Bonds, on the basis of (1) current offering prices
of the Bonds, (2) if offering prices are not available for any particular
Bond, on the basis of current offering prices for comparable securities,
(3) by determining the value of the Bonds on the offer side of the market
by appraisal or (4) 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 Evaluator deems such
prices inappropriate as a basis for valuation). As used herein, the closing
sale price is deemed to mean the most recent closing sale price on the relevant
securities exchange at or immediately prior to the Evaluation Time. 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 a 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 bid side value of the relevant
currency exchange rate expressed in U.S. dollars and,
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except in those cases in which the Securities are listed on a national or
foreign securities exchange and the last available sale prices are utilized, on
the basis of the last available bid side price of the Securities or comparable
securities, as applicable. In addition, the Evaluator may reduce the Evaluation
of each Security which is principally traded outside of the United States by the
amount of any liquidation costs (other than brokerage costs incurred on any
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.
37. The first paragraph of Section 6.01 of Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"As of the Evaluation Time (a) on the last Business Day of each year, (b)
on the day on which any Unit is tendered for redemption and (c) on any other day
desired by the Trustee or requested by the Depositor, the Trustee shall: Add (i)
all moneys on deposit in a Trust or moneys in the process of being collected
from matured interest coupons or bonds matured or called for redemption prior to
maturity (excluding (1) cash, cash equivalents or Letters of Credit deposited
pursuant to Section 2.01 hereof for the purchase of Contract Securities, unless
such cash or Letters of Credit have been deposited in the Income and Capital
Accounts because of failure to apply such moneys to the purchase of Contract
Securities pursuant to the provisions of Sections 2.01, 3.02 and 3.03 hereof and
(2) moneys credited to the Reserve Account pursuant to Section 3.04 hereof),
plus (ii) the aggregate Evaluation of all Securities (including Contract
Securities and additional Securities for which purchase contracts have been
entered into pursuant to the Depositor's instructions pursuant to clause (ii) of
the first sentence of Section 2.01(b), less the purchase price of such
contracts) on deposit in such Trust (such Evaluation to be made on the basis of
the aggregate underlying value of the Securities as determined in
Section 5.01(b) for the purpose of computing redemption value of Units as set
forth in Section 6.02 hereof), plus (iii) all other income from the Securities
(including interest accrued on the Bonds not subject to collection and
distribution) as of the Evaluation Time on the date of such Evaluation together
with all other assets of such Trust. For each such computation there shall be
deducted from the sum of the above (i) amounts representing any applicable taxes
or charges payable out of the respective Trust and for which no deductions shall
have previously been made for the purpose of addition to the Reserve Account,
(ii) amounts representing estimated accrued expenses of such Trust including but
not limited to unpaid fees and expenses of the Trustee, the Evaluator, the
Supervisor, the Depositor and counsel, in each case as reported by the Trustee
to the Depositor on or prior to the date of computation, (iii) amounts
representing unpaid organization costs, (iv) if the Prospectus for a Trust
provides that the creation and development fee, if any, accrues 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, if any,
accrues on a daily basis, amounts representing unpaid accrued deferred sales
charge, and (vi) any moneys identified by the Trustee, as of the date of such
computation, as held for distribution to Unitholders of record as of an Income
or Capital Account Record Date, or for payment of the Redemption Price of Units
tendered, prior to such date. The resulting figure is herein called a "Trust
Evaluation." The value of the pro rata share of each Unit of the respective
Trust determined on the basis of any such evaluation shall be referred to herein
as the "Unit Value." Amounts receivable by the Trust in foreign currency shall
be reported to the Evaluator who shall convert the same to U.S.
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dollars based on current exchange rates, in the same manner as provided in
Section 5.01(b) or 5.01(c), as applicable, for the conversion of the valuation
of foreign Securities, and the Evaluator shall report such conversion with each
Evaluation made pursuant to Section 5.01."
38. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, no Unitholder may request a distribution of Securities in-
kind pursuant to Sections 6.02, 6.05 or 9.02.
39. The first sentence of Section 6.02 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"Any Unit tendered for redemption by a Unitholder or his duly authorized
attorney to the Trustee at its unit investment trust division office, currently
at 000 Xxxxxxx Xxxxx Xxxxxxx, Xxxx Xxxxxxxx, XX 00000, tendered by means of an
appropriate request for redemption in form approved by the Trustee shall be
redeemed by the Trustee no later than the seventh calendar day following the day
on which tender for redemption is made, provided that if such day of redemption
is not a Business Day, then such Unit shall be redeemed on the first Business
Day prior thereto (being herein called the "Redemption Date")."
40. Section 7.01 of the Standard Terms and Conditions of Trust is amended by
adding the following subsection immediately after Section 7.01(m):
"(n) the Trustee shall be under no liability for entering into the Option
Agreements or any Option or for its actions or failure to act under or in
accordance with such Option Agreements or Option except for its own gross
negligence, bad faith or willful misconduct."
41. The first sentence of Section 7.04 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"For services performed under this Indenture the Trustee shall be paid an
annual fee in the amount per Unit set forth in the Trust Agreement, which fee
shall accrue daily and be computed based on the number of Units outstanding as
of January 1 of such year except for a Trust during the year or years in which
an initial offering period as determined in Section 5.01 of this Indenture
occurs, in which case the fee for a month is based on the number of Units
outstanding at the end of such month (such annual fee to be pro rated for any
calendar year in which the Trustee provides services during less than the whole
of such year)."
42. The first sentence of the second paragraph of Section 7.04 of the
Standard Terms and Conditions of Trust is replaced in its entirety with the
following:
"The Trustee shall be indemnified ratably by the affected Trusts and held
harmless against any loss or liability accruing to it without gross negligence,
bad faith or willful misconduct on its part arising out of or in connection with
the acceptance or administration of the Trust (including, but not limited to,
the execution and administration of the Option Agreements), including the cost
and expenses (including counsel fees) of defending itself against any claim of
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liability in the premises."
43. The Trustee's annual compensation as set forth under Section 7.04
shall be $1.05 per Unit.
44. 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 a
Trust represented by Units 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 affected 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 affected 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."
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In Witness Whereof, the undersigned have caused this Trust Agreement to be
executed; all as of the day, month and year first above written.
ADVISORS ASSET MANAGEMENT, INC.
By /s/ XXXX X. XXXXXXXX
------------------------------
Senior Vice President
In Witness Whereof, the undersigned have caused this Trust Agreement to be
executed; all as of the day, month and year first above written.
THE BANK OF NEW YORK MELLON
By /s/ XXXXXXX XXXXXXXX
-----------------------------
Vice President
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SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED AND CAUSED TO BE DEPOSITED
IN
ADVISORS DISCIPLINED TRUST 972
Incorporated herein by this reference and made a part hereof
is the schedule set forth under "Portfolio" in the Prospectus for the Trust.
