FT 3604
TRUST AGREEMENT
Dated: June 20, 2012
The Trust Agreement among First Trust Portfolios L.P., as
Depositor, The Bank of New York Mellon, as Trustee, First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor, and FTP Services
LLC, as FTPS Unit Servicing Agent, sets forth certain provisions in
full and incorporates other provisions by reference to the document
entitled "Standard Terms and Conditions of Trust for FT 785 and
certain subsequent Series, Effective December 9, 2003" (herein called
the "Standard Terms and Conditions of Trust"), 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, the Trustee, the Evaluator, the
Portfolio Supervisor and the FTPS Unit Servicing Agent agree as
follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III 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
STRATEGIC INCOME ADVANTAGE SELECT, CLOSED-END PORTFOLIO, SERIES 31
The following special terms and conditions are hereby agreed to:
A. The Securities initially deposited in the Trust pursuant to
Section 2.01 of the Standard Terms and Conditions of Trust are set
forth in the Schedules hereto.
B. The aggregate number of Units outstanding for the Trust on
the Initial Date of Deposit and the initial fractional undivided
interest in and ownership of the Trust represented by each Unit
thereof are set forth in the Prospectus in the section "Summary of
Essential Information."
Documents representing this number of Units for the Trust are
being delivered by the Trustee to the Depositor pursuant to Section
2.03 of the Standard Terms and Conditions of Trust.
C. The Record Date shall be as set forth in the Prospectus under
"Summary of Essential Information." The Trustee is authorized to make
the payments specified in Part I of Section 3.05 on the last Business
Day of each month.
D. The Distribution Date shall be the 25th day of the month in
which the related Record Date occurs.
E. The Mandatory Termination Date for the Trust shall be as set
forth in the Prospectus under "Summary of Essential Information."
F. First Trust Advisors L.P.'s compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust and FTP
Services LLC's compensation as referred to in Section 3.16 of the
Standard Terms and Conditions of Trust shall collectively be an annual
fee in the amount of $.0080 per Unit.
G. The Trustee's Compensation Rate pursuant to Section 6.04 of
the Standard Terms and Conditions of Trust shall be an annual fee in
the amount of $.0096 per Unit, calculated based on the largest number
of Units outstanding during the calendar year except during the
initial offering period as determined in Section 4.01 of this
Indenture, in which case the fee is calculated based on the largest
number of units outstanding during the period for which the
compensation is paid (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). However, in no event, except as may otherwise be
provided in the Standard Terms and Conditions of Trust, shall the
Trustee receive compensation in any one year from any Trust of less
than $2,000 for such annual compensation. The Bank of New York Mellon,
or any of its affiliates, may perform services in any capacity for any
exchange traded fund, investment company, investment trust or other
entity whose shares are held as an asset of the Trust, and The Bank of
New York Mellon, as Trustee, shall be entitled to receive the
foregoing compensation, without reduction, notwithstanding that The
Bank of New York Mellon or an affiliate is receiving compensation for
services to such exchange traded fund, investment company, investment
trust or other entity. Without limiting the scope of the expenses for
which the Trustee is entitled to reimbursement in accordance with
Section 6.04 of the Standard Terms and Conditions of Trust, the
amounts receivable by the Trustee from the Trust shall include amounts
charged by the Trustee or an affiliate in connection with custody of
securities at any branch or affiliate of the Trustee located outside
the United States.
H. The Initial Date of Deposit for the Trust is June 20, 2012.
I. There is no minimum amount of Securities to be sold by the
Trustee pursuant to Section 5.02 of the Indenture for the redemption
of Units.
J. The minimum number of Units a Unit holder must redeem in
order to be eligible for an in-kind distribution of Securities
pursuant to Section 5.02 shall be 2,500 Units of the Trust. No in-kind
distribution requests submitted during the 10 business days prior to
the Trust's Mandatory Termination Date will be honored.
K. No Unit holder will be eligible for an in-kind distribution
of Securities pursuant to Section 8.02.
PART III
A. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 1.01 (13) shall be amended to
delete the second sentence of such section and replace it with the
following:
"The Percentage Ratio with respect to each Security in a
Trust is that percentage derived by dividing the number of
shares of such Security included in the initial deposit made
pursuant to Section 2.01(a) by the total number of shares of all
Securities included in such deposit."
B. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 2.01(e) shall be amended to
read as follows:
"The Trustee is hereby irrevocably authorized to effect
registration or transfer of the Securities in fully registered
form to the name of the Trustee or to the name of its nominee or
to hold the Securities in a clearing agency registered with the
Securities and Exchange Commission, in a book entry system
operated by the Federal Reserve Board, with an Eligible Foreign
Custodian or in an Eligible Securities Depository."
C. Section 2.01 of the Standard Terms and Conditions of Trust
shall be amended to include the following section at the end of
Section 2.01:
"(g) Notwithstanding anything to the contrary herein,
subject to the requirements set forth in this Section 2.01(g)
and unless the Prospectus otherwise requires, the Depositor may,
on any Business Day (the "Trade Date"), subscribe for additional
Units as follows:
(i) Prior to the Evaluation Time on such Business Day, the
Depositor shall provide notice (the "Subscription Notice") to the
Trustee, by telephone or by written communication, of the
Depositor's intention to subscribe for additional Units. The
Subscription Notice shall identify the additional Securities to
be acquired (which will be a precise replication of the then
existing portfolio, as consistent with the provisions of Section
2.01(b)) and shall either (a) specify the quantity of additional
Securities to be deposited by the Depositor on the settlement
date for such subscription or (b) instruct the Trustee to
purchase additional Securities with an aggregate value as
specified in the Subscription Notice.
(ii) Promptly following the Evaluation Time on such Business
Day, the Depositor shall verify with the Trustee the number of
additional Units to be created.
(iii) Not later than the time on the settlement date for
such subscription when the Trustee is to deliver or assign the
additional Units created hereby, the Depositor shall deposit with
the Trustee (a) any additional Securities specified in the
Subscription Notice (or contracts to purchase such additional
Securities together with cash or a Letter of Credit in the amount
necessary to settle such contracts) or (b) cash or a Letter of
Credit in an amount equal to the aggregate value of the
additional Securities specified in the Subscription Notice to be
purchased by the Trustee, and adding and subtracting the amounts
specified in the first and second sentences of Section 5.01,
computed as of the Evaluation Time on the Business Day preceding
the Trade Date divided by the number of Units outstanding as of
the Evaluation Time on the Business Day preceding the Trade Date,
times the number of additional Units to be created.
(iv) On the settlement date for such subscription, the
Trustee shall, in exchange for the Securities and cash, cash or
Letter of Credit described above, deliver to, or assign in the
name of or on the order of, the Depositor the number of Units
verified by the Depositor with the Trustee.
(v) In the event the Depositor fails to take such action
required by paragraph (iii) above, the Trustee shall, on the
settlement date for such subscription, settle the securities
transactions specified in the Subscription Notice.
(vi) Neither the Trust nor Unit holders of the Trust will be
responsible for any loss resulting from the failure of the
Depositor to take such action required by paragraph (iii) above."
D. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 6.01(e) shall be amended to
read as follows:
"(e) (1) Subject to the provisions of subparagraph (2)
of this paragraph, the Trustee may employ agents,
sub-custodians, attorneys, accountants and auditors and shall
not be answerable for the default or misconduct of any such
agents, sub-custodians, attorneys, accountants or auditors if
such agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee shall
be fully protected in respect of any action under this Indenture
taken or suffered in good faith by the Trustee in accordance
with the opinion of counsel, which may be counsel to the
Depositor acceptable to the Trustee, provided, however that this
disclaimer of liability shall not excuse the Trustee from the
responsibilities specified in subparagraph (2) below. The fees
and expenses charged by such agents, sub-custodians, attorneys,
accountants or auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the Trust
as set forth in section 7.04 hereof.
(2) To the extent permitted under the Investment Company
Act of 1940 as evidenced by an opinion of counsel to the
Depositor satisfactory to the Trustee or "no-action" letters or
exemptive orders issued by the Securities and Exchange
Commission or its staff, the Trustee may place and maintain in
the care of an Eligible Foreign Custodian (which is employed by
the Trustee as a sub-custodian as contemplated by subparagraph
(1) of this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership interest) or an Eligible
Securities Depository the Trust's investments (including foreign
currencies) for which the primary market is outside the United
States, and such cash and cash equivalents in amounts reasonably
necessary to effect the Trust's transactions in such
investments, provided that:
(A) The Trustee shall indemnify the Trust and hold the
Trust harmless from and against any risk of loss of Trust
assets held with an Eligible Foreign Custodian in accordance
with the foreign custody contract.
(B) The Trustee shall exercise reasonable care, prudence
and diligence such as a person having responsibility for the
safekeeping of Trust assets would exercise, and shall be
liable to the Trust for any loss occurring as a result of its
failure to do so.
(C) The Trustee shall perform all duties assigned to the
Foreign Custody Manager by Rule 17f-5 under the Investment
Company Act of 1940 (17 CFR Section 270.17f-5), as now in
effect or as such rule may be amended in the future ("Rule
17f-5"). The Trustee shall not delegate such duties.
(D) The Trustee shall (i) provide the Depositor with an
analysis of the custody risks associated with maintaining
assets with an Eligible Securities Depository; (ii) monitor
the custody risks associated with maintaining assets with the
Eligible Securities Depository on a continuing basis and
promptly notify the Depositor of any material change in such
risks; and (iii) exercise reasonable care, prudence and
diligence in performing the foregoing duties. The Depositor
shall instruct the Trustee to take such action as the
Depositor deems appropriate in response to a notification by
the Trustee provided pursuant to (ii) in the preceding
sentence.
(E) The Trust's Prospectus shall contain such disclosure
regarding foreign securities and foreign custody as is
required for management investment companies by Forms N-1A and
N-2. Such Prospectus shall also contain disclosure concerning
the Depositor's responsibilities described in (D) above.
(F) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued use of
a particular Eligible Foreign Custodian pursuant to this
subparagraph for a period of not less than six years from the
end of the fiscal year in which the Trust was terminated, the
first two years in an easily accessible place. Such records
shall be available for inspection by Unit holders and the
Securities and Exchange Commission at the Trustee's corporate
trust office during its usual business hours."
E. Section 4.05 shall be amended to add the following paragraph
as the third paragraph of Section 4.05 of the Standard Terms and
Conditions of Trust:
"The Portfolio Supervisor may employ one or more
sub-Portfolio Supervisors to assist in performing the services
set forth in this Section 4.05 and shall not be answerable for
the default of any such sub-Portfolio Supervisors if such
sub-Portfolio Supervisors shall have been selected with
reasonable care, provided, however, that the Portfolio
Supervisor will indemnify and hold the Trust harmless from and
against any loss occurring as a result of a sub-Portfolio
Supervisor's willful misfeasance, reckless disregard, bad faith,
or gross negligence in performing supervisory duties. The fees
and expenses charged by such sub-Portfolio Supervisors shall be
paid by the Portfolio Supervisor out of proceeds received by the
Portfolio Supervisor in accordance with Section 4.03 hereof."
F. Notwithstanding any provision to the contrary in the Standard
Terms and Conditions of Trust, the Trustee may deem and treat the FTPS
Unit Servicing Agent as the sole Unit holder of FTPS Units for all
purposes of the Indenture and shall not be affected by any notice to
the contrary.
G. Section 1.01 of the Standard Terms and Conditions of Trust
shall be amended to include the following:
"Section 1.01(31). "FTPS Unit" shall mean Units which
are purchased through the Fund/SERV(R) trading system or on a
manual basis through FTP Services LLC or for which FTP Services
LLC is acting as FTPS Unit Servicing Agent.
Section 1.01(32). "FTPS Unit Servicing Agent" shall mean
FTP Services LLC or any successor FTPS Unit servicing agent
appointed as hereinafter provided."
H. Section 3.05.I. of the Standard Terms and Conditions of Trust
shall be amended to include the following at the end of such section:
"(d) deduct from the Income account or, to the extent
funds are not available in such Account, from the Capital
Account and pay to the FTPS Unit Servicing Agent the amount that
it is entitled to receive pursuant to Section 3.16."
I. Article III of the Standard Terms and Conditions of Trust
shall be amended to include the following section:
"Section 3.16. FTPS Unit Servicing Agent. FTP Services
LLC acts as record keeper, shareholder servicing agent and
distribution agent for Units which are purchased and sold
through the Fund/SERV(R) trading system or on a manual basis
through FTP Services LLC. ("FTPS Units"). (a) The FTPS Unit
Servicing Agent shall perform all of the duties with respect to
recordkeeping of FTPS Units and FTPS Unit holders,
distributions, redemption of FTPS Units and communications to
and with FTPS Unit holders listed below.
(1) The FTPS Unit Servicing Agent shall keep proper
books of record and account of all of the transactions in the
FTPS Units of each Trust under this Indenture at its corporate
office, including a record of the name and address of, and the
FTPS Units issued by each Trust and held by, every FTPS Unit
holder, and such books and records of each Trust shall be made
available to the Trustee and the Depositor promptly upon request
and open to inspection by any FTPS Unit holder of such Trust,
with respect to such FTPS Unit holders transactions, at all
reasonable times during usual business hours. Without limiting
the foregoing, the FTPS Unit Servicing Agent shall make any
records or documents described in Reg. 270.31(a)-1 under the
Investment Company Act of 1940 available promptly to the Trustee
and the Depositor upon request during usual business hours and
will preserve such records and documents for the periods
prescribed in Reg. 270.31(a)-2 thereunder.
(2) The FTPS Unit Servicing Agent shall distribute on or
shortly after the Distribution Dates specified in the Trust
Agreement to each FTPS Unit holder of record on its books on the
Record Date for each such Distribution Date specified in the
Trust Agreement such FTPS Unit holder's distribution as computed
under the Standard Terms and Conditions of Trust.
(3) In connection with such distributions set forth
above, the FTPS Unit Servicing Agent shall furnish a
Distribution Statement to FTPS Unit holders of record on its
books. The content and frequency of such Distribution Statements
shall in no respect be less detailed or frequent than that
specified in Section 3.06 of the Standard Terms and Conditions
of Trust.
(4) The FTPS Unit Servicing Agent shall transmit to each
FTPS Unit holder of record any notice or other communication
received from the Trustee and shall be solely responsible for
soliciting and transmitting to the Trustee any notice required
from FTPS Unit holders.
(5) The FTPS Unit Servicing Agent shall be responsible
for all tax reporting required from time to time by applicable
law and regulations with respect to holders of FTPS Units, and
reporting of cost basis in respect of the FTPS Units of such
holders (including, without limitation, reporting required by
Section 6045(g) of the Internal Revenue Code of 1986, as
amended).
(6) For purposes of permitting FTPS Unit holders to
satisfy any reporting requirements of applicable federal or
state tax law, the FTPS Unit Servicing Agent shall provide the
Trustee with the name, address, number of FTPS Units held by,
and such other information as requested by the Trustee, for
every FTPS Unit holder so that the Trustee can transmit to any
FTPS Unit holder of record on the FTPS Unit Servicing Agent's
books any reports required to be distributed pursuant to Section
4.02 of the Standard Terms and Conditions of Trust. The Trustee
may rely on the accuracy and completeness of the information
(including any records or documents made available) provided to
it by the FTPS Unit Servicing Agent and may accept such
information without inquiry. Each of the Depositor and the FTPS
Unit Servicing Agent hereby agree, jointly and severally, to
indemnify the Trustee and hold Trustee harmless from and against
any and all costs, expenses, penalties, damages, liabilities or
claims including attorneys' and accountants' fees sustained or
incurred by or asserted against the Trustee by reason of or as a
result of any of the information provided to the Trustee by the
FTPS Unit Servicing Agent being inaccurate or incomplete. This
indemnity shall be a continuing obligation of each of the
Depositor and the FTPS Unit Servicing Agent, and their
successors and assigns, notwithstanding the termination of this
Trust Agreement.
(7) The FTPS Unit Servicing Agent shall distribute to
redeeming FTPS Unit holders of record on its books redemption
proceeds it receives pursuant to Section 5.02 of the Standard
Terms and Conditions of Trust from the Trustee as the sole
record owner of FTPS Units on the Trustee's books.
(8) The FTPS Unit Servicing Agent shall distribute to
FTPS Unit holders of record on its books a pro rata portion of
termination proceeds it receives pursuant to Section 8.02 of the
Standard Terms and Conditions of Trust from the Trustee as the
sole record owner of FTPS Units on the Trustee's books.
(9) In connection with such termination distributions
set forth above, the FTPS Unit Servicing Agent shall furnish a
Final Distribution Statement to FTPS Unit holders of record on
its books. The content of such Final Distribution Statements
shall in no respect be less detailed than that specified in
Section 8.02 of the Standard Terms and Conditions of Trust.
(10) As requested by the Depositor and/or the Trustee,
the FTPS Unit Servicing Agent shall perform such other functions
which, from time to time, are agreed upon by the parties hereto
and which may give rise to additional fees.
(b) As compensation for providing the services set forth
herein, of a character described in Section 26(a)(2)(C) of the
Investment Company Act of 1940, and to the extent that such
services are in addition to, and do not duplicate, the services
to be performed by the Trustee, FTP Services LLC shall receive,
in arrears, against a statement or statements therefore
submitted to the Trustee monthly or annually an aggregate annual
fee in the per Unit amount set forth in Part II of the Trust
Agreement for the Trust, calculated based on the largest number
of Units outstanding during the calendar year, except during the
initial offering period as determined in Section 4.01 of the
Standard Terms and Conditions of Trust, in which case the fee is
calculated based on the largest number of Units outstanding
during the period for which the compensation is paid (such
annual fee to be pro rated for any calendar year in which FTP
Services LLC provides services described herein during less than
the whole of such year). Such fee may exceed the actual cost of
providing such services for the Trust, but at no time will the
total amount received by FTP Services LLC for rendering the
services described in this Section 3.16 and First Trust
Advisors, L.P. for rendering the services described in Section
4.03 to unit investment trusts of which the Depositor is the
sponsor in any calendar year exceed the aggregate cost to FTP
Services LLC and First Trust Advisors L.P. of supplying such
services in such year. Such compensation may, from time to time,
be adjusted by the Depositor provided that the total adjustment
upward does not, at the time of such adjustment, exceed the
percentage of the total increase, after the date hereof, 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, if such index should no
longer be published. The consent or concurrence of any Unit
holder hereunder shall not be required for any such adjustment
or increase. Such compensation shall be paid by the Trustee,
upon receipt of an invoice therefore from FTP Services LLC,
which shall constitute the representation by FTP Services LLC
that the bookkeeping and administrative services for which
compensation is claimed are properly compensable hereunder and
that the aggregate cost incurred by FTP Services LLC of
providing FTPS Unit shareholder servicing hereunder was not less
than the compensation claimed, upon which representation the
Trustee may conclusively rely. Such compensation shall be
charged against the Income and/or Capital Accounts, in
accordance with Section 3.05 of the Standard Terms and
Conditions of Trust.
If the cash balance in the Income and Capital Accounts
shall be insufficient to provide for amounts payable pursuant to
this Section 3.16, the Trustee shall have the power to sell (i)
Securities from the current list of Securities designated to be
sold pursuant to Section 5.02 hereof, or (ii) 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 3.16.
All moneys payable to the FTPS Unit Servicing Agent
pursuant to this Section 3.16 shall be secured by a lien on the
Trust prior to the interest of Unit holders, but no such lien
shall be prior to any lien in favor of the Trustee under the
provisions of Section 6.04 of the Standard Terms and Conditions
of Trust.
(c) The FTPS Unit Servicing Agent shall be under no
liability for any action taken in good faith on any appraisal,
paper, order, list, demand, request, consent, affidavit, notice,
opinion, direction, evaluation, endorsement, assignment,
resolution, draft or other document, whether or not of the same
kind, prima facie properly executed, or for the disposition of
moneys, pursuant to this Indenture, except by reason of its own
negligence, lack of good faith or willful misconduct, provided
that the FTPS Unit Servicing Agent shall not in any event be
liable or responsible for any evaluation made by the Evaluator.
(d) Except as the context otherwise requires, the FTPS
Unit Servicing Agent shall be subject to the provisions of
Section 4.05 herein in the same manner as it would if it were
the Evaluator.
(e) The FTPS Unit Servicing Agent shall be indemnified
ratably by the affected Trust and held harmless against any loss
or liability accruing to it without negligence, bad faith or
willful misconduct on its part, arising out of or in connection
with the operations of the Trust, including the costs and
expenses (including counsel fees) of defending itself against
any claim of liability in the premises, including without
limitation any loss, liability or expense incurred in acting
pursuant to written directions to the FTPS Unit Servicing Agent
given by the Trustee or Depositor from time to time in
accordance with the provisions of this Indenture or in
undertaking actions from time to time which the FTPS Unit
Servicing Agent deems necessary in its discretion to protect the
Trust and the rights and interests of the FTPS Unit holders
pursuant to the terms of this Indenture.
(f) The FTPS Unit Servicing Agent shall conduct its
operations in a manner that is compatible with the current
operational procedures and requirements of the Trustee
(including, without limiting the foregoing, the provision and
receipt of data in such format and meeting such technical
requirements as the Trustee may specify) and shall exercise its
best efforts to accommodate any changes in the operational
procedures and requirements which the Trustee may make upon
prior notice to the FTPS Unit Servicing Agent. The Depositor
acknowledges and agrees that the default of the FTPS Unit
Servicing Agent in its obligations under this paragraph, or the
performance by the FTPS Unit Servicing Agent of its obligations
in a manner which shall adversely affect the Trustee's
performance of its duties, shall be a sufficient grounds for the
Trustee to remove the FTPS Unit Servicing Agent pursuant to
Section 3.16(d) and Section 4.05.
(g) As used in this Section 3.16, "FTPS Unit holder,"
when referring to the records of the Trustee, shall mean the
FTPS Unit Servicing Agent and, when referring to the records to
be maintained by the FTPS Unit Servicing Agent, shall mean each
owner of a FTPS Unit identified on the records of the FTPS Unit
Servicing Agent."
J. Section 4.01(a) and (b) of the Standard Terms and Conditions
of Trust shall be amended to include the FTPS Unit Servicing Agent
among the parties who are furnished information concerning the
Evaluation of each issue of Securities deposited in the Trust and the
Trust Fund Evaluation.
K. The second sentence of the first paragraph of Section 4.03
shall be replaced with the following:
"Such fee may exceed the actual cost of providing such
services for the Trust, but at no time will the total amount
received by First Trust Advisors, L.P. for rendering the
services described in this Section 4.03 and FTP Services LLC for
rendering the services described in Section 3.16 to unit
investment trusts of which the Depositor is the sponsor in any
calendar year exceed the aggregate cost to FTP Services LLC and
First Trust Advisors, L.P. of supplying such services in such
year."
L. Section 4.04 of the Standard Terms and Conditions of Trust
shall be replaced in its entirety by the following:
"Section 4.04. Liability of Evaluator. The Trustee, FTPS
Unit Servicing Agent, Depositor and the Unit holders may rely on
any Evaluation furnished by First Trust Advisors, L.P., acting
in its capacity as Evaluator, and shall have no responsibility
for the accuracy thereof. The determinations made by the
Evaluator hereunder shall be made in good faith upon the basis
of the best information available to it. The Evaluator shall be
under no liability to the Trustee, FTPS Unit Servicing Agent,
Depositor or the Unit holders for errors in judgment; provided,
however, that this provision shall not protect the Evaluator
against any liability to which it would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder."
M. The second sentence of the first paragraph of Section 5.01
shall be amended to delete subsection (ii) of such sentence and
replace it in its entirety with the following:
"(ii) amounts representing estimated accrued expenses of
such Trust including but not limited to unpaid fees and expenses
of the Trustee, the Evaluator, the Portfolio Supervisor, the
FTPS Unit Servicing Agent, the Depositor and its counsel, in
each case as reported by the Trustee to the Depositor on or
prior to the date of Evaluation,"
N. Section 6.01(c) of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"(c) The Trustee shall not be responsible for or in
respect of the recitals herein, the validity or sufficiency of
this Indenture or for the due execution hereof by the Depositor,
the Portfolio Supervisor, the Evaluator, or the FTPS Unit
Servicing Agent, or for the form, character, genuineness,
sufficiency, value or validity of any of the Securities (except
that the Trustee shall be responsible for the exercise of due
care in determining the genuineness of Securities delivered to
it pursuant to contracts for the purchase of such Securities) or
for or in respect of the validity or sufficiency of the Units or
of the Certificates (except for the due execution thereof by the
Trustee) or for the due execution thereof by the Depositor, and
the Trustee shall in no event assume or incur any liability,
duty or obligation to any Unit holder, the FTPS Unit Servicing
Agent or the Depositor other than as expressly provided for
herein. The Trustee shall not be responsible for or in respect
of the validity of any signature by or on behalf of the
Depositor, the Portfolio Supervisor, the Evaluator or the FTPS
Unit Servicing Agent;"
O. Section 8.02(b) of the Standard Terms and Conditions of Trust
shall be replaced in its entirety with the following:
"(b) deduct from the Income Account of such Trust or, to
the extent that funds are not available in such Account, from
the Capital Account of such Trust, and pay accrued and unpaid
fees of the Evaluator, the Portfolio Supervisor, the FTPS Unit
Servicing Agent, the Depositor and counsel in connection with
such Trust, if any;"
P. Section 8.05 of the Standard Terms and Conditions of Trust
shall be amended to add the following paragraph immediately preceding
the last paragraph of such section:
"Any notice, demand, direction or instruction to be
given to the FTPS Unit Servicing Agent shall be in writing and
shall be duly given if mailed or delivered to the FTPS Unit
Servicing Agent at 000 X. Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX
00000, or at such other address as shall be specified by the
FTPS Unit Servicing Agent to the other parties hereto in
writing."
Q. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the second paragraph in Section 8.02
shall be amended to read as follows:
"In the event of any termination of the Trust prior to
the Mandatory Termination Date, the Trustee shall proceed to
liquidate the Securities then held and make the payments and
distributions provided for hereinafter in this Section 8.02,
except that in such event, the distribution to each Unit holder
shall be made in cash and shall be such Unit holder's pro rata
interest in the balance of the principal and income accounts
after the deductions herein provided. In the event that the
Trust shall terminate on or after the Mandatory Termination
Date, the Trustee shall, at least thirty days prior to the
Mandatory Termination Date, send a written notice to all Unit
holders of record. If such Unit holder owns at least the minimum
number of Units of Trust set forth in Part II of the Trust
Agreement, such notice shall further indicate that such Unit
holder may elect to receive an in-kind distribution of their pro
rata share of the Securities, to the extent of whole shares. The
Trustee will honor duly executed requests for in-kind
distributions received (accompanied by the electing Unit
holder's Certificate, if issued) by the close of business ten
business days prior to the Mandatory Termination Date. Unit
holders who do not effectively request an in-kind distribution
shall receive their distribution upon termination in cash. Unit
holders shall receive their distribution upon termination in
cash."
R. Section 6.01 shall be amended to add the following as
paragraph (n):
"(n) The Trustee may act, and may engage any
corporation, partnership or other entity affiliated with The
Bank of New York Mellon (an "Affiliated Entity") to act, as
broker or dealer to execute transactions, including the purchase
or sale of any securities currently distributed, underwritten or
issued by any Affiliated Entity, and receive, or pay to the
Affiliated Entity, as applicable, compensation for such services
at standard commission rates, markups or concessions."
S. Section 3.02 shall be amended to read in its entirety as
follows:
"Section 3.02 Income Account. The Trustee shall collect
the dividends and other cash distributions on the Securities in
each Trust which would be treated as dividend (other than
capital gain dividends) or interest income under the Internal
Revenue Code as such become payable (including all monies which
would be so treated 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 Obligation for
which no Replacement Security has been obtained pursuant to
Section 3.12 hereof) and credit such income to a separate
account for each Trust to be known as the "Income Account."
Any non-cash distributions received by a Trust shall be sold
to the extent they would be treated as dividend or interest
income under the Internal Revenue Code and the proceeds shall be
credited to the Income Account. Except as provided in the
preceding sentence, non-cash distributions received by a Trust
(other than a non-taxable distribution of the shares of the
distributing corporation which shall be retained by a Trust)
shall be dealt with in the manner described in Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions and the proceeds thereof shall be
credited to the Capital (Principal) Account. Neither the Trustee
nor the Depositor shall be liable or responsible in any way for
depreciation or loss incurred by reason of any such sale.
All other distributions received by a Trust shall be
credited to the Capital (Principal) Account."
T. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the first paragraph of Section
3.05.(II)(a) shall be amended to provide as follows:
"On each Distribution Date, the Trustee shall distribute
to each Unit holder of record at the close of business on the
Record Date immediately preceding such Distribution Date an
amount per Unit equal to such Unit holder's Income Distribution
(as defined below), plus such Unit holder's pro rata share of
the balance of the Capital Account (except for monies on deposit
therein required to purchase Contract Obligations and, with
respect to any Trust which is a widely held fixed investment
trust as defined in Treas. Reg. Section 1.671-5(b)(22), monies
constituting proceeds of pro-rata sales of Trust assets to
effect redemptions, which proceeds shall be retained for payment
of redemptions) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I, provided, however, that notwithstanding any
contrary provisions of paragraph (II)(c) of this Section, the
Trustee shall not be required to make a distribution from the
Capital Account unless the balance available for distribution is
equal to or greater than $1.00 per 100 Units, except that,
notwithstanding any provision of the Standard Terms and
Conditions of Trust or this Trust Agreement to the contrary:
(i) With respect to any Trust which is a widely held
fixed investment trust as defined on Treas. Reg. Section
1.671-5(b)(22), the Trustee shall on any Distribution Date
distribute the cash available for distribution in the Income and
Capital Accounts within the meaning of Treas. Reg. Section
1.671-5(b)(5) if the aggregate amount of such cash available for
distribution is equal to or greater than .1% of the net asset
value of the Trust on the related Record Date. This provision is
intended to comply with Treas. Reg. Section 1.671-5(c)(2)(v)(C)
and shall be interpreted consistent therewith and with any
successor regulations.
(ii) With respect to any trust which intends to qualify
as a regulated investment company, as set forth in the
Prospectus for such trust, the Trustee may make such
distributions from the Income or Capital Accounts as may be
necessary, as determined by the Trust's independent registered
public accounting firm, in order to avoid imposition of any
income or excise taxes on undistributed income in the Trust. In
addition, the Trustee will distribute any funds in the Capital
Account in December of each year."
U. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the ninth paragraph of Section 5.02 of
the Standard Terms shall be amended to read in its entirety as
follows:
"With respect to any Trust which is a widely held fixed
investment trust as defined on Treas. Reg. Section
1.671-5(b)(22), for the purpose of funding the Principal Account
for payment of the Redemption Value with respect to each tender
of a Unit or Units for redemption, the Depositor may direct the
trustee to sell and, in the absence of contrary direction from
the Depositor, the Trustee may sell, the pro rata amount of each
Security allocable to the tendered Units as soon as reasonably
practicable following such tender. In determining such pro rata
amount, the Trustee may apply the calendar month aggregation
method provided in Treas. Reg. Section
1.671-5(c)(2)(iv)(G)(3)(i). If the proceeds of such pro rata
sales are insufficient, the Trustee may (i) sell additional
Securities as directed by the Sponsor or, in the absence of
direction, sell Securities in amounts which are reasonably pro
rata as determined by the Trustee or (ii) advance funds required
to pay the Redemption Value, provided that the Trustee shall
have no obligation to advance funds if the unreimbursed amount
advanced to the Trust for this purpose then equals at least
$15,000. When directed by the Depositor or determined by the
Trustee, but in all events as promptly as reasonably practicable
whenever the unreimbursed amount advanced by the Trustee equals
or exceeds $15,000, the Trustee shall sell additional Securities
in the manner provided in clause (i) of the preceding sentence
and shall reimburse itself the amount of the advance, provided
that the Trustee's right to reimbursement shall not be affected
by any delay in sale or reimbursement. The Trustee's right to
reimbursement shall be secured by a lien on the Trust prior to
the interest of the Unit holders. The net proceeds of any sale
of Securities representing income shall be credited to the
Income Account and then disbursed therefrom for payment of
expenses and payments to Unit holders as otherwise provided in
this Indenture. The balance of such net proceeds shall be
credited to the Principal Account. The Depositor and the Trustee
shall use their reasonable efforts to conduct pro rata sales of
Securities qualifying for exception from tax reporting as
described in Treas. Reg. Section 1.671-5(c)(2)(iv)(G) and,
during the final calendar year of the trust, qualifying for the
exception from tax reporting described in Treas. Reg. Section
1.671-5(c)(2)(iv)(F). Notwithstanding the foregoing, neither the
Trustee nor the Depositor shall be liable to any person in the
event sales proceeds for any calendar year exceed the general de
minimis test of Treas. Reg. Section 1.671-5(c)(2)(iv)(D)(1)
(whether or not due to a failure to sell Securities pro rata) or
otherwise require reporting under Treas. Reg. Section 1.671-5."
V. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 6.02 of the Standard Terms is
amended to read in its entirety as follows:
"Section 6.02. Books, Records and Reports. (a) General.
The Trustee shall keep proper books of record and account of all
the transactions of each Trust under this Indenture at its
corporate trust office, including a record of the name and
address of, and the Units issued by each Trust and held by,
every Unit holder, and such books and records of each Trust
shall be open to inspection by any Unit holder of such Trust at
all reasonable times during the usual business hours. The
Trustee shall make such annual or other reports as may from time
to time be required under any applicable state or federal
statute or rule or regulations thereunder.
(b) Audit of trust accounts. Unless the Depositor
determines that such an audit is not required, the accounts of
the Trust shall be audited not less than annually by independent
public accountants designated from time to time by the Depositor
and the Trustee and the reports of such accountants shall be
furnished upon request to Unit holders. So long as the Depositor
is making a secondary market for Units, the Depositor shall bear
the cost of such annual audits to the extent such cost exceeds
$.50 per 100 Units.
(c) Costs of updating of registration statement. If
provided for in the Prospectus for a Trust, the Trustee shall
pay, or reimburse to the Depositor, the expenses related to the
updating of the Trust's registration statement, to the extent of
legal fees, typesetting fees, electronic filing expenses and
regulatory filing fees. Such expenses shall be paid from the
Income Account, or to the extent funds are not available in such
Account, from the Capital Account, against an invoice or
invoices therefor presented to the Trustee by the Depositor. By
presenting such invoice or invoices, the Depositor shall be
deemed to certify, upon which certification the Trustee is
authorized conclusively to rely, that the amounts claimed
therein are properly payable pursuant to this paragraph. The
Depositor shall provide the Trustee, from time to time as
requested, an estimate of the amount of such expenses, which the
Trustee shall use for the purpose of estimating the accrual of
Trust expenses. The amount paid by the Trust pursuant to this
paragraph in each year shall be separately identified in the
annual statement provided to Unit holders. The Depositor shall
assure that the Prospectus for the Trust contains such
disclosure as shall be necessary to permit payment by the Trust
of the expenses contemplated by this paragraph under applicable
laws and regulations. The provisions of this paragraph shall not
limit the authority of the Trustee to pay, or reimburse to the
Depositor or others, such other or additional expenses as may be
determined to be payable from the Trust as provided in this
Section 6.02.
(d) Tax reporting for grantor trusts. With respect to
any Trust which is a widely held fixed investment trust as
defined in Treas. Reg. Section 1.671-5(b)(22), the Depositor and
the Trustee agree that the Trust meets the requirements of
Treas. Reg. Section 1.671-5(f)(1)(i), and the Trustee is
authorized:
(i) to report in accordance with any of the safe
harbor methods described in Treas. Reg. Section 1.671-5(f);
(ii) to report sales proceeds, whenever permitted, as
provided in Treas. Reg. Section 1.671-5(f)(1)(iv)(B);
(iii) to report proceeds of sales and dispositions
described in Treas. Reg. Section 1.671-5(c)(2)(iv)(D)(4)(ii)
as provided in Treas. Reg. Section
1.671-5(c)(2)(iv)(D)(4)(i); and
(iv) to use the measuring date, as defined in Treas.
Reg. Section 1.671-5(c)(2)(iv)(D)(1), in lieu of the
start-up date, wherever permitted.
For purposes of Treas. Reg. Section 1.671-5(f)(1)(iv)(A)(2),
the date of the last deposit under 2.01(b) prior to the
expiration of the initial offering period, as certified to the
Trustee by the Depositor, shall be considered the 'start-up date'
of the Trust.
(e) Cost-basis reporting for Unit holders who purchase
or hold their Units through the First Trust Advisor Direct
system ("Advisor Direct"). The Depositor shall maintain
information required for the reporting of the cost basis of
Advisor Direct holders (as defined in section 2.03(b)) as may be
required from time to time by applicable law (including, without
limitation, Section 6045(g) of the Internal Revenue Code of
1986, as amended) and regulations, and the Depositor shall be
responsible for the reporting of such information to the Advisor
Direct holders, or if reporting by the Depositor is not
permitted by applicable law or regulation or if the Depositor
and Trustee otherwise agree that the Trustee shall report such
information, the Depositor shall provide the Trustee such
information as will permit the Trustee to provide required
cost-basis information to the Advisor Direct holders and shall
provide the information at such times and in such form as the
Trustee may reasonably request. The Depositor will be solely
responsible for the accuracy of such cost-basis information and
the reporting thereof to Advisor Direct holders as provided
above. The Trustee may rely conclusively upon the cost-basis
information provided by the Depositor with respect to Advisor
Direct holders, and shall be indemnified in accordance with
Section 6.04 of the Indenture against any loss or liability,
including any penalty or other charge imposed by any taxing
authority in respect of such cost-basis information or reporting
thereof made by the Depositor as provided in this paragraph."
W. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of the Trust, the eighth paragraph of Section
5.02 of the Standard Terms shall be amended to read in its entirety as
follows:
"Notwithstanding the foregoing provisions of this
Section 5.02, the Trustee (or the FTPS Unit Servicing Agent in
the case of FTPS Units) is hereby irrevocably authorized in its
discretion, in the event that the Depositor does not purchase
any Units tendered to the Trustee (or the FTPS Unit Servicing
Agent in the case of FTPS Units) for redemption, or in the event
that a Unit is being tendered by the Depositor for redemption,
in lieu of redeeming Units, to sell Units in the
over-the-counter market through any broker-dealer of its choice
for the account of the tendering Unit holder at prices which
will return to the Unit holder an amount in cash, net after
deducting brokerage commissions, transfer taxes and other
charges, equal to or in excess of the Redemption Value which
such Unit holder would otherwise be entitled to receive on
redemption pursuant to this Section 5.02. The Trustee (or the
FTPS Unit Servicing Agent in the case of FTPS Units) shall pay
to the Unit holder the net proceeds of any such sale on the day
on which such Unit holder would otherwise be entitled to receive
payment of the Redemption Value hereunder."
X. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 6.01(l) shall be replaced in
its entirety with the following:
"The Trust may include (I) a letter or letters of credit
meeting the requirements of Section 2.05 for the purchase of
Securities or Contract Obligations issued by the Trustee in its
individual capacity for the account of the Depositor or (II)
Securities issued by the Trustee, its parent, or affiliates, and
the Trustee may otherwise deal with the Depositor and the Trust
with the same rights and powers as if it were not the Trustee
hereunder; and"
Y. Notwithstanding anything to the contrary in the Standard Terms
and Conditions of Trust, Section 3.07 shall be amended to add the
following immediately after Section 3.07(i):
"(j) that as a result of the ownership of the Security,
the Trust or its Unit holders would be a direct or indirect
shareholder of a passive foreign investment company as defined
in section 1297(a) of the Internal Revenue Code.
(k) that such sale is necessary for the Trust to comply
with such federal and/or state securities laws, regulations
and/or regulatory actions and interpretations which may be in
effect from time to time."
Z. Notwithstanding anything to the contrary in the Standard Terms
and Conditions of Trust, paragraph (e) of Section 6.05 shall be
amended by adding the following sentence at the end thereof:
"The Trustee's and each successor Trustee's right to
indemnification shall survive its resignation or removal."
AA. All references to The Bank of New York in the Standard Terms
and Conditions of Trust shall be replaced with "The Bank of New York
Mellon."
BB. Any notice, demand, direction or instruction to be given to
either the Depositor, Portfolio Supervisor or Evaluator shall be in
writing and shall be duly given if mailed or delivered to such party
at 000 Xxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, or at
such other address as shall be specified by the Depositor, Portfolio
Supervisor or Evaluator to the other parties hereto in writing.
CC. Article IV of the Standard Terms and Conditions of Trust
shall be amended to add the following:
"Section 4.06. Liability of Portfolio Supervisor. The
Portfolio Supervisor shall be under no liability to the Unit
holders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Indenture or for
errors in judgment, but shall be liable only for its own willful
misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its
obligations and duties hereunder."
DD. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, the last sentence of Section 3.01 shall
be replaced with the following:
"As used herein, the Depositor's reimbursable expenses
of organizing the Trust shall include the cost of the initial
preparation and typesetting of the registration statement,
prospectuses (including preliminary prospectuses), the
indenture, and other documents relating to the Trust, SEC and
state blue sky registration fees, the cost of the initial
valuation of the portfolio and audit of the Trust, the costs of
a portfolio consultant, if any, the initial fees and expenses of
the Trustee, and legal and other out-of-pocket expenses related
thereto, but not including the expenses incurred in the printing
of preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses."
EE. Section 2.03(b) of the Standard Terms and Conditions of
Trust is restated in full as follows:
"Notwithstanding any provisions of the Indenture to the
contrary, Units shall be held solely in uncertificated form
evidenced by appropriate notation in the registration books of
the Trustee, and no Unit holder shall be entitled to the
issuance of a Certificate evidencing the Units owned by such
Unit holder. The only permitted registered holders of Units
shall be (i) Depository Trust Company (or its nominee, Cede &
Co.), (ii) the FTPS Unit Servicing Agent, or (iii) Unit holders
who purchase or otherwise hold their Units through Advisor
Direct ("Advisor Direct holders"); consequently, individuals who
are not Advisor Direct holders or holders of FTPS Units must
hold their Units through an entity which is a participant in
Depository Trust Company. Except as provided by the preceding
provisions of this paragraph, the rights specified in this
Indenture of holders of Units evidenced by a Certificate shall
apply to holders of Units held in uncertificated form."
FF. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, Section 3.13 shall be amended by adding
the following sentences at the end thereof:
"To the extent permitted by applicable law and
regulatory authorization, unpaid portions of the deferred sales
charge shall be secured by a lien on the Trust in favor of the
Depositor, provided that such lien shall be subordinate to the
lien of the Trustee granted by Section 6.04 of the Standard
Terms and Conditions of Trust. 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."
GG. For Trusts which make annualized distributions of income, as
set forth in the Prospectus for such Trusts, Section 2.01(b)(4), as
renumbered hereby, shall be amended to add the following sentence at
the end thereof:
"If the Cash amount pursuant to the foregoing
calculation is negative, the Trustee shall distribute to the
Depositor the amount of such deficit, and may advance funds to
the Trust for such purpose, such advance to be repaid and
secured in the manner provided in Section 3.05(II)(b) as amended
herein."
HH. Section 3.07(h) of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"(h) in the case of a Trust which has elected to qualify
as a "regulated investment company," that the sale of Securities
is necessary or advisable: (i) in order to maintain the
qualification of the Trust as such; or (ii) to provide funds to
make any distribution from such a Trust for a taxable year in
order to avoid imposition of any income or excise taxes on
undistributed income in the Trust;"
II. For Trusts which intend to qualify as a regulated investment
company, as set forth in the Prospectus for such Trusts, 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:
"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 will, at the direction of the Depositor, vote for or
against 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."
JJ. For Trusts which intend to qualify as a regulated investment
company, as set forth in the Prospectus for such Trusts, Section
2.01(b)(4) of the Standard Terms and Conditions of Trust shall be
deleted in its entirety and Section 2.01(b)(5) shall be renumbered to
"Section 2.01(b)(4)."
KK. For Trusts which intend to qualify as a regulated investment
company, as set forth in the Prospectus for such Trusts, Section
3.12(a) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"(a) The New Securities shall be Securities as
originally selected for Deposit in that Series of the Trust or
securities which the Depositor determines to be similar in
character as Securities originally selected for Deposit;"
LL. For Trusts which intend to qualify as a regulated investment
company, as set forth in the Prospectus for such Trusts, Article III
of the Standard Terms and Conditions of Trust shall be amended to
include the following section:
"Section 3.17. Regulated Investment Company Election.
Each Trust elects to be treated and to qualify as a "regulated
investment company" as defined in the Internal Revenue Code, and
the Trustee is hereby directed to make such elections, including
any appropriate election to be taxed as a corporation, as shall
be necessary to effect such qualification."
MM. For Trusts which intend to qualify as a regulated investment
company, as set forth in the Prospectus for such Trusts, Section
8.01(b) shall be amended to remove the following text from such
section:
"as a grantor trust."
NN. Notwithstanding anything to the contrary in the Standard
Terms and Conditions of Trust, for Trusts which make annualized
distributions of income, as set forth in the Prospectus for such
Trust, Section 3.05 (II)(b) shall be replaced with the following:
"(b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the balance of the Income Account
calculated as of the prior Record Date, on the basis of
one-twelfth of (i) the annual income of the Trust for the
ensuing twelve months estimated by reference to the
distributions made on the Securities during the preceding
calendar quarter (as adjusted for any information with respect
to future dividends received by the Trustee prior to such Record
Date) less (ii) the fees and expenses then deductible pursuant
to Section 3.05 (I) and (iii) 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. The Trustee shall advance out of
its own funds and deposit in and credit to the Income Account on
each Distribution Date, to the extent that there is not
sufficient cash in the Income Account, the additional amount, if
any, anticipated by the Trustee to be necessary to make the
Income Distribution as specified in the preceding sentence; the
Trustee shall be entitled to be reimbursed from the Income
Account without interest when funds are available therein from
income on any of the Securities, including upon the sale of
Securities to meet redemptions, for any and all amounts advanced
by it pursuant to this paragraph. The Trustee shall be deemed to
be the beneficial owner of the income of the Trust to the extent
such income is required to reimburse the Trustee for amounts
advanced by it pursuant to this paragraph; amounts payable to
the Trustee in respect of such advances shall be secured by a
lien on the Trust prior to the interests of Unit holders. In the
event any issuer of Securities fails to make an anticipated
distribution, or there is a disposition of Securities or other
event that reduces the net income which will be received from
that estimated by the Trustee, the Trustee shall, on the Record
Date next following the Trustee's determination that such event
has occurred, reduce the amount of the next following
distribution by such amount as will enable the Trustee to
recover any advances to the Trust referable to the anticipated
receipt of such unrealized income. As determined by the Trust's
independent registered public accounting firm, the Trustee shall
adjust the December distribution from the Income and Capital
Accounts as may be necessary so that the Trust distributions
during the calendar year equal an amount necessary to avoid
paying any regulated investment company excise tax during such
year. The Trustee is authorized to reduce the following January
distribution by the amount of any such increase."
IN WITNESS WHEREOF, First Trust Portfolios L.P., The Bank of New
York Mellon, First Trust Advisors L.P. and FTP Services LLC have each
caused this Trust Agreement to be executed and the respective
corporate seal to be hereto affixed and attested (if applicable) by
authorized officers; all as of the day, month and year first above
written.
FIRST TRUST PORTFOLIOS L.P.,
Depositor
By Xxxxx X. Xxxxx
Senior Vice President
THE BANK OF NEW YORK MELLON,
Trustee
By Xxxx X. Xxxxxx
Managing Director
[SEAL]
ATTEST:
Xxx X. Xxx
Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Xxxxx X. Xxxxx
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Xxxxx X. Xxxxx
Senior Vice President
FTP Services LLC,
FTPS Unit Servicing Agent
By Xxxxx X. Xxxxx
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
FT 3604
(Note: Incorporated herein and made a part hereof for the Trust is the
"Schedule of Investments" for the Trust as set forth in the Prospectus.)
