THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 127
TRUST AGREEMENT
Dated: November 13, 1995
This Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank (National Association),
as Trustee, FT Evaluators L.P., as Evaluator, and First
Trust Advisors L.P., as Portfolio Supervisor, sets forth
certain provisions in full and incorporates other provisions
by reference to the document entitled "Standard Terms and
Conditions of Trust for The First Trust Special Situations
Trust, Series 22 and certain subsequent Series, Effective
November 20, 1991" (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 and the Portfolio Supervisor 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
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. (1) The aggregate number of Units outstanding for
the Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in
and ownership of the Trust represented by each Unit thereof
shall be 1/15,000.
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 Percentage Ratio is as follows on the Initial
Date of Deposit:
4.55% Albertson's, Inc., 4.55%
AutoZone, Inc., 4.56% Xxxxxx & Noble,
Inc., 4.54% Best Buy Company, Inc.,
4.54% Xxxxxxx Department Stores, Inc.,
4.55% Dollar General Corporation,
4.55% Gap, Inc., 4.54% Hannaford
Brothers Company, 4.55% Xxxxxx-Xxxxxx
Company, 4.55% Home Depot, Inc., 4.54%
Xxxx'x Corporation, 4.54% May
Department Stores Company, 4.55%
Nordstrom's, Inc., 4.55% Office Depot,
Inc., 4.54% Xxxxx (X.X.) Company, Inc.,
4.54% Pep Boys-Manny, Moe & Xxxx,
4.54% Price/Costco, Inc. 4.56% Sears,
Xxxxxxx & Company, 4.54% Talbots, Inc.,
4.54% Toys "R" Us, Inc., 4.54% Wal-
Mart Stores, Inc., 4.54% Walgreen
Company.
D. The Record Dates shall be as set forth in the
Prospectus under "Summary of Essential Information."
E. The Distribution Dates shall be as set forth in
the Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall
be December 1, 2002.
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust
shall be an annual fee of $0.0030 per Unit calculated on the
largest number of Units outstanding during each period in
respect of which a payment is made pursuant to Section 3.05,
payable on a Distribution Date.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust
shall be an annual fee of $.0098 per Unit, calculated on
the largest number of Units outstanding during each period
in respect of which a payment is made pursuant to Section
3.05. However, in no event, except as may be 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.
I. The Initial Date of Deposit for the Trust is
November 13, 1995.
J. The minimum amount of Equity Securities to be sold
by the Trustee pursuant to Section 5.02 of the Indenture for
the redemption of Units shall be 100 shares.
PART III
A. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal
Account."
B. Paragraph (g) of Section 6.01 of the Standard
Terms and Conditions of Trust is hereby amended by inserting
the following after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total value the
Equity of Securities deposited in such Trust, or (ii)"
C. Paragraph (c) of Subsection II of Section 3.05 of
the Standard Terms and Conditions of Trust is hereby amended
to read 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 pro rata share of the balance of the
Principal Account (except for monies on deposit therein
required to purchase Contract Obligations) computed as
of the close of business on such Record Date after
deduction of any amounts provided in Subsection I,
provided, however, that with respect to distributions
other than the distribution occurring in the month of
December of each year, the Trustee shall not be
required to make a distribution from the Principal
Account unless the amount available for distribution
shall equal $1.00 per 1000 Units in the case of Units
initially offered at approximately $1.00 per Unit, or,
$1.00 per 100 Units in the case of Units initially
offered at approximately $10.00 per Unit."
D. For purposes of this Trust, all references in the
Standard Terms and Conditions of Trust including provisions
thereof amended hereby to "$1.00 per Unit" shall be amended
to read "$10.00 per Unit" and all references to "per 1,000
Units" shall be amended to read "per 100 Units."
E. The first sentence in Section 4.03. of the
Standard Terms and Conditions of Trust is hereby amended to
read in its entirety as follows:
"As compensations for its services hereunder, the
Evaluator shall receive against a statement therefor
submitted to the Trustee on or before each Record Date
(upon which the Trustee may rely as the Evaluator's
certification that the amount stated does not exceed
the cost incurred by the Evaluator in providing
services as described below), an amount equal to the
amount specified as compensation for the Evaluator in
the Trust Agreement provided, however, if at any time
the fee of the Trustee shall have been increased
pursuant to Section 6.04, the compensation of the
Evaluator hereunder shall at the same time be ratably
increased."
F. Section 5.02 of the Standard Terms and Conditions
of Trust is amended by adding the following new paragraph
after the second paragraph of such section:
"In lieu of a cash redemption, Unit holders tendering
2,500 Units or more for redemption may request from the
Trustee by written notice submitted at the time of tender an
in kind distribution of shares of Securities, to the extent
of whole shares. To the extent possible, in kind
distributions of Securities shall be made by the Trustee
through the distribution of each of the Securities in book-
entry form to the account of the Unit holder's bank or
broker-dealer at the Depository Trust Company. An in kind
distribution will be reduced by all expenses in connection
with customary transfer and registration charges. The
tendering Unit holder will receive his pro rata number of
whole shares of each of the Securities comprising the
portfolio and cash from the Principal Account equal to the
fractional shares to which the tendering Unit holder is
entitled. The Trustee may, but shall not be required to,
adjust the number of shares of any issue of Securities
included in a Unit holder's in kind distribution to
facilitate the distribution of whole shares, such adjustment
to be made on the basis of the value of Securities on the
date of tender. If funds in the Principal Account are
insufficient to cover the required cash distribution to the
tendering Unit holder, the Trustee may sell Securities in
the manner described in this Section 5.02."
G. Section 8.02 of the Standard Terms and Conditions
of Trust shall be amended to delete the reference to
"100,000 Units" and substitute "2,500 Units" in the third
sentence of the second paragraph thereof.
H. The first paragraph of Section 3.05.II(a) of the
Standard Terms and Conditions of Trust is hereby amended to
read in its entirety as follows:
"II. (a) 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 Principal Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on
such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that with
respect to distributions other than the distribution
occurring in the month of December of each year, the
Trustee shall not be required to make a distribution
from the Principal Account unless the amount available
for distribution shall equal $1.00 per 100 Units."
I. Section 3.05.II(b) of the Standard Terms and
Conditions of Trust is hereby amended to read in its
entirety as follows:
"(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 cash balance in the
Income Account computed as of the close of business on
the Record Date immediately preceding such Income
Distribution after deduction of (i) the fees and
expenses then deductible pursuant to Section 3.05.I.
and (ii) 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."
J. Section 3.11 of the Standard Terms and Conditions
of Trust is hereby deleted in its entirety and replaced with
the following language:
"Section 3.11 Notice to Depositor. In the event
that the Trustee shall have been notified at any time
of any action to be taken or proposed to be taken by at
least a legally required number of holders of the
equity securities (the "Equity Securities") (including
but not limited to the making of any demand, direction,
request, giving of any notice, consent or waiver or the
voting with respect to any amendment or supplement to
any indenture, resolution, agreement or other
instrument under or pursuant to which the Contract
Obligations, if any, have been issued) 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
as it, in its sole discretion, shall deem advisable.
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 at least a legally required
number of holders of any Equity Securities deposited in
a Trust, the Trustee shall take such action or omit
from taking any action, as appropriate, so as to insure
that the Equity Securities are voted as closely as
possible in the same manner and the same general
proportion as are the Equity Securities held by owners
other than the Trust.
In the event that an offer by the issuer of any of
the Securities or any other party shall be made to
issue new securities, or to exchange securities, for
Trust Securities, the Trustee shall reject such offer.
However, should any exchange or substitution be
effected notwithstanding such rejection or without an
initial offer, any Securities, cash and/or property
received in exchange 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
Portfolio Supervisor in so advising the Trustee. The
cash received in such exchange and cash proceeds of any
such sales shall be distributed to Unit holders on the
next distribution date in the manner set forth in
Section 3.05 regarding distributions from the Principal
Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss
incurred by reason of any such sale.
Neither the Depositor nor the Trustee shall be
liable to any person for any action or failure to take
action pursuant to the terms of this Section 3.11 other
than failure to notify the Depositor.
Whenever new securities or property is received
and retained by the Trust pursuant to this Section
3.11, the Trustee shall, within 5 days thereafter, mail
to all Unit holders of the Trust notices of such
acquisition unless legal counsel for the Trust
determines that such notice is not required by The
Investment Company Act of 1940, as amended."
K. Section 1.01(4) shall be amended to read as
follows:
"(4)"Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
L. Section 3.05 of Article III of the Standard Terms
and Conditions of Trust is hereby amended to include the
following subsection:
"Section 3.05.I.(e) deduct from the Interest
Account or, to the extent funds are not available in
such Account, from the Principal Account and pay to the
Depositor the amount that it is entitled to receive
pursuant to Section 3.14.
M. Article III of the Standard Terms and Conditions
of Trust is hereby amended by inserting the following
paragraphs which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative
Expenses. 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 Portfolio Supervisor,
the Depositor shall receive against a statement or
statements therefor submitted to the Trustee monthly or
annually an aggregate annual fee in an amount which
shall not exceed $0.0010 times the number of Units
outstanding as of January 1 of such year except for a
year or years in which an initial offering period as
determined by Section 4.01 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 Depositor provides service during less than
the whole of such year), but in no event shall such
compensation when combined with all compensation
received from other unit investment trusts for which
the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services
in any calendar year exceed the aggregate cost to the
Depositor providing 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, 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 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
Interest and Principal Accounts on or before the
Distribution Date following the Monthly Record Date on
which such period terminates. The Trustee shall have
no liability to any Certificateholder or other person
for any payment made in good faith pursuant to this
Section.
If the cash balance in the Interest and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.14, the Trustee
shall have the power to sell (i) Bonds from the current
list of Bonds designated to be sold pursuant to Section
5.02 hereof, or (ii) if no such Bonds have been so
designated, such Bonds 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 3.14.
Any moneys payable to the Depositor pursuant to
this Section 3.16 shall be secured by a prior lien on
the Trust Fund except that no such lien shall be prior
to any lien in favor of the Trustee under the
provisions of Section 6.04 herein.
N. Section 1.01(3) shall be amended to read as
follows:
"(3) "Evaluator" shall mean FT Evaluators L.P. and
its successors in interest, or any successor evaluator
appointed as hereinafter provided."
O. Section 3.01 of the Standard Terms and Conditions
of Trust shall be replaced in its entirety with the
following:
"Section 3.01. Initial Cost. The expenses
incurred in establishing a Trust, including the cost of
the preparation and typesetting of the registration
statement, prospectuses (including preliminary
prospectuses), the indenture and other documents
relating to the Trust, printing of Certificates,
Securities and Exchange Commission and state blue sky
registration fees, the costs of the initial valuation
of the portfolio and audit of the Trust, 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, to the extent not borne by the Depositor,
shall be borne by the Trust. To the extent the funds
in the Income and Principal Accounts of the Trust shall
be insufficient to pay the expenses borne by the Trust
specified in this Section 3.01, the Trustee shall
advance out of its own funds and cause to be deposited
and credited to the Income Account such amount as may
be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each
Record Date from funds on hand in the Income Account
or, to the extent funds are not available in such
Account, from the Principal Account, in the amount
deemed to have accrued as of such Record Date as
provided in the following sentence (less prior payments
on account of such advances, if any), and the
provisions of Section 6.04 with respect to the
reimbursement of disbursements for Trust expenses,
including, without limitation, the lien in favor of the
Trustee therefor and the authority to sell Securities
as needed to fund such reimbursement, shall apply to
the payment of expenses and the amounts advanced
pursuant to this Section. For the purposes of the
preceding sentence and the addition provided in clause
(4) of the first sentence of Section 5.01, the expenses
borne by the Trust pursuant to this Section shall be
deemed to have been paid on the date of the Trust
Agreement and to accrue at a daily rate over the time
period specified for their amortization provided in the
Prospectus; provided, however, that nothing herein
shall be deemed to prevent, and the Trustee shall be
entitled to, full reimbursement for any advances made
pursuant to this Section no later than the termination
of the Trust. For purposes of calculating the accrual
of organizational expenses under this Section 3.01, the
Trustee shall rely on the written estimates of such
expenses provided by the Depositor pursuant to Section
5.01."
P. Section 5.01 of the Standard Terms and Conditions
of Trust shall be amended as follows:
(i) The second sentence of the first paragraph of
Section 5.01 shall be amended by adding the following
at the conclusion thereof: ", plus (4) amounts
representing organizational expenses paid from the
Trust less amounts representing accrued organizational
expenses of the Trust, plus (5) all other assets of the
Trust"
(ii) The following shall be added at the end of
the first paragraph of Section 5.01:
Until the Depositor has informed the Trustee
that there will be no further deposits of
Additional Securities pursuant to section 2.01(b),
the Depositor shall provide the Trustee with
written estimates of (i) the total organizational
expenses to be borne by the Trust pursuant to
Section 3.01 and (ii) the total number of Units to
be issued in connection with the initial deposit
and all anticipated deposits of additional
Securities. For purposes of calculating the Trust
Fund Evaluation and Unit Value, the Trustee shall
treat all such anticipated expenses as having been
paid and all liabilities therefor as having been
incurred, and all Units as having been issued, in
each case on the date of the Trust Agreement, and,
in connection with each such calculation, shall
take into account a pro rata portion of such
expense and liability based on the actual number
of Units issued as of the date of such
calculation. In the event the Trustee is informed
by the Depositor of a revision in its estimate of
total expenses or total Units and upon the
conclusion of the deposit of additional
Securities, the Trustee shall base calculations
made thereafter on such revised estimates or
actual expenses, respectively, but such adjustment
shall not affect calculations made prior thereto
and no adjustment shall be made in respect
thereof.
Q. The first sentence of Section 3.13. shall be
amended to read as follows:
"As compensation for providing supervisory
portfolio services under this Indenture, the Portfolio
Supervisor shall receive, in arrears, against a
statement or statements therefor submitted to the
Trustee monthly or annually an aggregate annual fee in
an amount which shall not exceed $0.0035 per Unit
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 4.01 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 Portfolio Supervisor
provides services during less than the whole of such
year), but in no event shall such compensation when
combined with all compensation received from other
series of the Trust for providing such supervisory
services in any calendar year exceed the aggregate cost
to the Portfolio Supervisor for the cost of providing
such services."
R. Section 1.01(2) shall be amended to read as
follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank
(National Association), or any successor trustee appointed
as hereinafter provided."
All references to United States Trust Company of new
York in the Standard Terms and Conditions of Trust shall be
amended to refer to The Chase Manhattan Bank (National
Association).
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank (National Association), FT Evaluators L.P.
and First Trust Advisors L.P. 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.
NIKE SECURITIES L.P.,Depositor
By Xxxxxx X. Xxxxx
Senior Vice President
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
Trustee
(SEAL) By Xxxxxx Xxxxxxxx
Vice President
Attest:
Xxxxxxx X. Xxxxxxx
Second Vice President
FT EVALUATORS L.P., Evaluator
By Xxxxxx X. Xxxxx
Senior Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Xxxxxx X. Xxxxx
Senior Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 127
(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.)
