EXHIBIT 1.1
CLAYMORE SECURITIES DEFINED PORTFOLIOS,
SERIES 138
XXXXX FORGOTTEN FORTY PORTFOLIO,
2003 SERIES
GROWTH AND VALUE PLUS PORTFOLIO,
2003 SERIES
REFERENCE TRUST
AGREEMENT
This Reference Trust Agreement dated as of December 17, 2002, between
Claymore Securities, 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
Series Formed on or Subsequent to December 18, 2001" (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. 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 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 the Trust under this Reference Trust Agreement as
indicated on the attached Schedule A.
(2) For the purposes of the definition of the term "Unit" in
Article I, it is hereby specified that the fractional undivided
interest in and ownership of a Trust is the amount described in
Amendment No. 2 to the
Trust's Registration Statement (Registration No. 333-100980) as filed
with the Securities and Exchange Commission today. 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 term "Deferred Sales Charge" shall mean the "deferred
sales fee" as described in the Prospectus.
(4) The terms "Income Account Record Date" and "Capital
Account Record Date" shall mean the dates set forth under "Essential
Information--Record Dates" in the Prospectus.
(5) 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.
(6) The term "Initial Date of Deposit" shall mean the date of
this Reference Trust Agreement as set forth above.
(7) Section 2.03 is hereby amended by adding the following
sentence as the third sentence of Section 2.03:
"Effective as of the Evaluation Time on December 17, 2002, in
the event that the aggregate value of Securities in the Trust has
increased since the evaluation on December 16, 2002, the Trustee shall
issue such number of additional Units to the Unitholder of outstanding
Units as of the close of business on December 16, 2002, that the price
per Unit computed as of the Evaluation Time on December 17, 2002, plus
the maximum applicable sales charge shall equal approximately $10 per
Unit (based on the number of Units outstanding as of said Evaluation
Time, including the additional Units issued pursuant to this sentence);
in the event that the aggregate value of Securities in the Trust Fund
has decreased since the evaluation on December 16, 2002, there will be
a reverse split of the outstanding Units, and said Unitholder will
surrender to the Trustee for cancellation such number of Units, that
the price per Unit computed as of the Evaluation Time on December 17,
2002, plus the maximum applicable sales charge shall equal
approximately $10 per Unit (based on the number of Units outstanding as
of said Evaluation Time, reflecting cancellation of Units pursuant to
this sentence)."
(8) The number of Units of the Trust(s) referred to in Section
2.03 shall be equal to the "Number of Units" in the Statement(s) of
Financial Condition in the Prospectus.
(9) The first paragraph of Section 5.01 is hereby amended and
restated to read as follows:
SECTION 5.01. TRUST EVALUATION. 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 (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 Interest and Principal Accounts because of
failure to apply such moneys to the purchase of Contract Securities
pursuant to the provisions of Sections 2.01, 3.03 and 3.04 hereof and
(2) moneys credited to the Reserve Account pursuant to Section 3.05
hereof), plus (ii) the aggregate Evaluation of all Securities
(including Contract Securities
and Reinvestment Securities) on deposit in such Trust as is determined
by the Evaluator (such evaluations shall take into account and itemize
separately (i) the cash on hand in the Trust or moneys in the process
of being collected from matured interest coupons or bonds matured or
called for redemption prior to maturity, (ii) the value of each issue
of the Securities in the Trust on the bid side of the market as
determined by the Evaluator pursuant to Section 4.01, and (iii)
interest accrued thereon not subject to collection and distribution).
For each such Evaluation there shall be deducted from the sum of the
above (i) amounts representing any applicable taxes or governmental
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 fees of
the Trust and expenses of such Trust including but not limited to
unpaid fees and expenses of the Trustee, the Evaluator, the Supervisor,
the Depositor and bond counsel, in each case as reported by the Trustee
to the Evaluator on or prior to the date of evaluation, (iii) any
moneys identified by the Trustee, as of the date of the Evaluation, as
held for distribution to Unitholders of record as of a Record Date or
for payment of the Redemption Value of Units tendered prior to such
date and (iv) unpaid organization costs in the estimated amount per
Unit set forth in the Prospectus. The resulting figure is herein called
a "TRUST FUND 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."
(10) For the purposes of Section 6.01(g)(i), the liquidation
amount shall be 20% of the total value of all Securities deposited in
the Trust(s) during a Trust's initial offering period at the time of
each such deposit.
(11) Article III is hereby amended by adding the following
section:
SECTION 3.23. BOOKKEEPING AND ADMINISTRATIVE EXPENSES. If so
provided in the Prospectus, as compensation for providing bookkeeping
and other administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the extent such
services are in addition to, and do not duplicate, the services to be
provided hereunder by the Trustee or the Depositor for providing
supervisory services, the Depositor shall receive at the times
specified in Section 3.05, against a statement or statements therefor
submitted to the Trustee an aggregate annual fee in an amount which
shall not exceed that amount set forth in the Prospectus, calculated as
specified in Section 3.05, but in no event shall such compensation,
when combined with all compensation received from other series of the
Trust or other unit investment trusts sponsored by the Depositor or its
affiliates for providing such bookkeeping and administrative services
in any calendar year exceed the aggregate cost to the Depositor for
providing such services to such unit investment trusts. Such
compensation may, from time to time, be adjusted provided that the
total adjustment upward does not, at the time of such adjustment,
exceed the percentage of the total increase, during the period from the
Trust Agreement to the date of any such increase, in consumer prices
for services as measured by the United States Department of Labor
Consumer Price Index entitled "All Services Less Rent of Shelter" or
similar index as described under Section 3.18. The consent or
concurrence of any Unitholder hereunder shall not be required for any
such adjustment or increase. Such compensations shall be paid by the
Trustee, upon receipt of invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing services
hereunder the Trustee may rely, and shall be charged against the Income
and Capital Accounts as specified in Section 3.05. The Trustee shall
have no liability to any Unitholder or other person for any payment
made in good faith pursuant to this Section.
If the cash balance in the Income and Capital Accounts shall
be insufficient to provide for amounts payable pursuant to this Section
3.23, the Trustee shall have the power to sell (1) Securities from the
current list of Securities designated to be sold pursuant to Section
5.02 hereof, or (2) if no such Securities have been so designated, such
Securities as the Trustee may see fit to sell in its own discretion,
and to apply the proceeds of any such sale in payment of the amounts
payable pursuant to this Section 3.23.
Any moneys payable to the Depositor pursuant to this Section
3.23 shall be secured by a prior lien on the Trust except that no such
lien shall be prior to any lien in favor of the Trustee under the
provisions of Section 6.04.
(12) The phrases "supervisory services," "supervisory
portfolio services" and "portfolio supervisory services" in Sections
3.18 are hereby replaced with the phrase "portfolio supervisory
services and bookkeeping and administrative expenses."
(13) Section 7.05 is hereby amended and replaced in its
entirety with the following:
SECTION 7.05. COMPENSATION. The Depositor shall receive at the
times set forth in Sections 3.05, 3.18, 3.23 and 4.03 as compensation
for performing portfolio supervisory services, bookkeeping and
administrative expenses and evaluation services, such amount and for
such periods as specified the Prospectus and/or Reference Trust
Agreement. The compensation for providing portfolio supervisory
services, bookkeeping and administrative expenses and evaluation
services shall be made on the basis of the largest number of units
outstanding at any time during the period for which such compensation
is being computed. At no time, however, will the total amount received
by the Depositor for services rendered to all series of Claymore
Securities Defined Portfolios in any calendar year exceed the aggregate
cost to them of supplying such services in such year. Such rate may be
increased by the Trustee from time to time, without the consent or
approval of any Unitholder, or the Depositor, by amounts not exceeding
the proportionate increase during the period from the date of such
Prospectus and/or Reference Trust Agreement to the date of any such
increase, in consumer prices as published either under the
classification "All Services Less Rent" in the Consumer Price Index
published by the United States Department of Labor or, if such Index is
no longer published, a similar index.
In the event that any amount of the compensation paid to the
Depositor pursuant to Sections 3.05, 3.18 and 3.23 and 4.03 is found to
be an improper charge against a Trust, the Depositor shall reimburse
the Trust in such amount. An improper charge shall be established if a
final judgment or order for reimbursement of the Trust shall be
rendered against the Depositor and such judgment or order shall not be
effectively stayed or a final settlement is established in which the
Depositor agrees to reimburse the Trust for amounts paid to the
Depositor pursuant to this Section 7.05.
(14) The first two sentences of Section 3.22 are hereby
amended and replaced with the following:
SECTION 3.22. CREATION AND DEVELOPMENT FEE. If the Prospectus
related to a Trust specifies a creation and development fee, the
Trustee shall, on or immediately after the end of the initial offering
period, withdraw from the Capital Account, an amount equal to the
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 is the per unit amount
specified in the Prospectus for the Trust.
(15) Article III is hereby amended by adding the following
section:
SECTION 3.23. LICENSE FEES. If so provided in the Prospectus,
the Depositor may enter into a Licensing Agreement (the "AGREEMENT")
with a licensor (the "LICENSOR") described in the Prospectus in which
the Trust(s), as consideration for the licenses granted by the Licensor
for the right to use its trademarks and trade names, intellectual
property rights or for the use of databases and research owned by the
Licensor, will pay a fee of seven basis points (0.07%) calculated in
the manner set forth in the Agreement to Xxxx Xxxxx & Company, Inc. or
the Depositor to reimburse the Depositor for payment of the expenses
for the Xxxxx Forgotten Forty Portfolio, 2003 Series. For the Growth
and Value Plus Portfolio, 2003 Series, the Trust(s) will pay a fee of
seven basis points (0.07%) calculated in the manner set forth in the
Agreement to Xxxx Xxxxx & Company, Inc. or the Depositor for the assets
invested in accordance with the Xxxxx strategy, and two basis points
(0.02%) calculated in the manner set forth in the Agreement to Dow
Xxxxx or the Depositor to reimburse the Depositor for payment of
expenses.
If the Agreement provides for an annual license fee computed
in whole or part by reference to the average daily net asset value of
the Trust assets, for purpose of calculating the accrual of estimated
expenses such annual fee shall accrue at a daily rate and the Trustee
is authorized to compute an estimated license fee payment (i) until the
Depositor has informed the Trustee that there will be no further
deposits of additional Securities, by reference to an estimate of the
average daily net asset value of the Trust assets which the Depositor
shall provide the Trustee, (ii) thereafter and during the calendar
quarter in which the last business day of the period described in
clause (i) occurs, by reference to the net asset value of the Trust
assets as of such last business day, and (iii) during each subsequent
calendar quarter, by reference to the net asset value of the Trust
assets as of the last business day of the preceding calendar quarter.
The Trustee shall adjust the net asset value (Trust Fund Evaluation) as
of the dates specified in the preceding sentence to account for any
variation between accrual of estimated license fee and the license fee
payable pursuant to the Agreement, but such adjustment shall not affect
calculations made prior thereto and no adjustment shall be made in
respect thereof.
(16) Section 2.05 (b) is replaced in its entirety with the
following:
(b) Additional Securities deposited during the 90 days
following the initial deposit made pursuant to Section 2.01 hereof
shall maintain as closely as practicable the Original Proportionate
Relationship, except as provided in this Section 2.05(b). 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 Security in the Trust most under
represented immediately before the deposit with respect to the
Original Proportionate Relationship. Instructions to purchase
Additional Securities under this Section shall be in writing and shall
direct the Trustee to purchase, or enter into contracts to purchase,
Additional Securities; such instructions shall also specify the name,
CUSIP number, if any, aggregate amount of each such Additional
Security and price or range of price. If, at the time of a subsequent
deposit under this Section, Securities of an Original Issue are
unavailable, cannot be purchased at reasonable prices or their
purchase is prohibited or restricted by applicable law, regulation or
policies, in lieu of the portion of the deposit that would otherwise
be represented by those Securities, the Depositor may (A) deposit (or
instruct the Trustee to purchase) Securities of another Original Issue
or (B) deposit cash or a letter of credit with instructions to acquire
the Securities of such Original Issue when they become available.
This Reference Trust Agreement shall be deemed effective when executed
and delivered by the Sponsor and the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Reference Trust
Agreement to be duly executed.
CLAYMORE SECURITIES, INC., DEPOSITOR
By /s/ Xxxxxxxx Xxxxxxx
--------------------------
Executive Vice President
and General Counsel
THE BANK OF NEW YORK, TRUSTEE
By /s/ Xxxxxx Xxxxxxxx
-------------------------
Vice President
SCHEDULE A
SECURITIES INITIALLY DEPOSITED
CLAYMORE SECURITIES DEFINED PORTFOLIOS, SERIES 138
(Note: Incorporated herein and made a part hereof are the "Trust
Portfolio(s)" as set forth in the Prospectus.)
