EXHIBIT 1.1
ADVISORS DISCIPLINED TRUST 1400
TRUST AGREEMENT
Dated: December 23, 2014
This Trust Agreement among Advisors Asset Management, Inc., as Depositor,
Evaluator and Supervisor, and The Bank of New York Mellon, as Trustee, sets
forth certain provisions in full and incorporates other provisions by reference
to the document entitled "Standard Terms and Conditions of Trust For Advisor's
Disciplined Trust, Effective for Unit Investment Trusts Investing in Equity
Securities Established On and After August 5, 2004 (Including Advisors
Disciplined Trust, Series 13 and Subsequent Series)" (the "Standard Terms and
Conditions of Trust") and such provisions as are set forth in full and such
provisions as are incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and Sections of the
Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Depositor, Trustee, Evaluator and Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
1. The Securities listed in the Schedules hereto have been deposited in
trust under this Trust Agreement.
2. The fractional undivided interest in and ownership of the Trust
represented by each Unit thereof is a fractional amount, the numerator of which
is one and the denominator of which is the amount set forth under "Understanding
Your Investment--Statement of Financial Condition--Number of Units" in the
Prospectus for the Trust.
3. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, all Units will be held in uncertificated form and
Unitholders may not request a certificate representing his or her Units.
4. The aggregate number of Units described in Section 2.03(a) for the Trust
is that number of Units set forth under "Understanding Your Investment--
Statement of Financial Condition--Number of Units" in the Prospectus for the
Trust.
5. The term "Deferred Sales Charge Payment Dates" shall mean the dates
specified for deferred sales fee installments under "Investment Summary--Fees
and Expenses" in the Prospectus for the Trust.
6. The term "Distribution Date" shall mean the "Distribution Dates" set
forth under "Investment Summary--Essential Information" in the Prospectus for
the Trust.
7. The term "First Settlement Date" shall mean the third Business Day
following the Initial Date of Deposit.
8. The term "Mandatory Termination Date" shall mean the "Termination Date"
set forth under "Investment Summary-Essential Information" in the Prospectus for
the Trust.
9. The term "Record Date" shall mean the "Record Dates" set forth under
"Investment Summary--Essential Information" in the Prospectus for the Trust.
10. Section 1.01(1) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Depositor' shall mean Advisors Asset Management, Inc. and its successors
in interest, or any successor depositor appointed as hereinafter provided."
11. Section 1.01(2) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Trustee' shall mean The Bank of New York Mellon and its successors in
interest, or any successor trustee appointed as hereinafter provided."
12. Section 1.01(3) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Evaluator' shall mean Advisors Asset Management Inc., and its successors
in interest, or any successor evaluator appointed as hereinafter provided."
13. Section 1.01(4) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
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"'Supervisor' shall mean Advisors Asset Management Inc., and its successors
in interest, or any successor evaluator appointed as hereinafter provided."
14. Section 1.01(32) is replaced in its entirety with the following:
"'Percentage Ratio' shall mean with respect to a Trust, the percentage
relationship among the Securities based on the number of contracts of each
Option per Unit, the principal amount of each Bond per Unit and the number of
shares of each Equity Security per Unit compared to all Securities attributable
to each Unit existing immediately prior to the related additional deposit of
Securities. The Percentage Ratio shall be adjusted to the extent necessary, and
may be rounded, to reflect the occurrence of a stock dividend, a stock split or
a similar event which affects the capital structure of the issuer of a
security."
15. Section 1.01(42) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"'Securities' shall mean the Bonds, Equity Securities and Options, Contract
Securities, delivery statements relating to "when-issued" and/or "regular way"
contracts, if any, for the purchase of certain Securities and certified bank
check or checks or Letter of Credit or Letters of Credit sufficient in amount or
availability required for such purchase, deposited in irrevocable trust and
listed in the schedule(s) to the Trust Agreement or which are deposited in or
purchased on behalf of a Trust pursuant to Section 2.01(b) hereof or as
otherwise permitted hereby, and any securities received in exchange,
substitution or replacement for such securities, as may from time to time
continue to be held as part of a Company.
16. Section 1.01 of the Standard Terms and Conditions of Trust is amended by
adding the following subsection immediately after Section 1.01(54):
"(55) 'Options' shall mean any put, call, straddle, option or privilege
on a security or other asset, or on a group or index of securities or other
assets (including any interest therein or based on the value thereof including
delivery statements related to contracts, if any, for the purchase of certain
securities and cash, certified or bank check or checks or letter of credit or
letters of credit sufficient in amount or availability required for such
purchase, deposited in irrevocable trust and listed on Schedule A of the Trust
Agreement, and any securities received in addition to, or in exchange,
substitution or replacement for, such securities pursuant to Sections 2.01, 3.11
and 3.12 hereof, as may from time to time continue to be held as a part of the
Trust).
(56) 'Bonds' shall mean debt obligations, including delivery statements
relating to `when issued' and/or `regular way' contracts, if any, for the
purchase of certain bonds and cash, certified or bank checks or checks or letter
of credit or letters of credit sufficient in amount or availability required for
such purchase, deposited in irrevocable trust and listed in Schedule A of the
Trust Agreement, and any obligations received in addition to, or in exchange,
substitution or replacement for, such obligations pursuant to Sections 2.01,
3.11, 3.12 and 3.19 hereof, as may from time to time continue to be held as part
of the Trust.
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(57) 'Equity Securities' shall mean any equity securities of corporations
or other entities (including such securities held in American Depositary Receipt
(`ADRs') or similar form) including delivery statements related to contracts, if
any, for the purchase of certain securities and cash, certified or bank check or
checks or letter of credit or letters of credit sufficient in amount or
availability required for such purchase, deposited in irrevocable trust and
listed on Schedule A of the Trust Agreement, and any securities received in
addition to, or in exchange, substitution or replacement for, such securities
pursuant to Sections 2.01, 3.11 and 3.12 hereof, as may from time to time
continue to be held as a part of the Trust."
17. Section 2.01(a) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(a) The Depositor, on the date of the Trust Agreement, has deposited with
the Trustee in trust the Securities listed in the Schedules attached to the
Trust Agreement in bearer form or duly endorsed in blank or accompanied by all
necessary instruments of assignment and transfer in proper form to be held,
managed and applied by the Trustee as herein provided. The Depositor shall
deliver to the Trustee the Securities listed on said Schedules which were
represented by Contract Securities within 90 calendar days after the date of the
Trust Agreement (the "Delivery Period"). If a contract for such Contract
Securities is terminated a party thereto for any reason beyond the control of
the Depositor or if for any other reason the Securities to be delivered pursuant
to such contract are not delivered to the Trust by the end of the Delivery
Period, the Trustee shall immediately draw on the Letter of Credit, if any, in
its entirety, apply the moneys in accordance with Section 2.01(d), and the
Depositor shall forthwith take the remedial action specified in Section 3.12. If
the Depositor does not take the action specified in Section 3.12 within 90
calendar days of the end of the Delivery Period, the Trustee shall forthwith
take the action specified in Section 3.12."
18. Section 3.02 of the Standard Terms and Conditions of Trust is replaced
in its entirety with the following:
"Section 3.02. Income Account. The Trustee shall collect the dividends,
interest or other like cash distributions on the Securities in each Trust as
such becomes payable (including all moneys representing penalties for the
failure to make timely payments on the Securities, or as liquidated damages for
default or breach of any condition or term of the Securities or of the
underlying instrument relating to any Securities and other income attributable
to a Failed Contract Security for which no Replacement Security has been
obtained pursuant to Section 3.12 hereof and interest accrued but unpaid prior
to the date of deposit of the Securities) in trust and including that part of
the proceeds of the sale, liquidation, redemption, prepayment or maturity of any
Bonds or insurance payments thereon which represent interest thereon and credit
such income to a separate account for each Trust to be known as the "Income
Account."Any distributions received by the Trustee in a form other than cash
(other than a non-taxable distribution of the shares of the distributing entity)
shall be dealt with in the manner described in Section 3.11 and shall be
retained or disposed of by a Trust according to those provisions. The proceeds
of sale credited to the Income Account of the Trust. The Trustee shall not be
liable or responsible in any way for depreciation or loss incurred by reason of
any such sale."
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19. Section 3.05(a) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(a) The Trustee, as of the First Settlement Date shall advance from its
own funds and shall pay to the Unitholders of a Trust then of record the amount
of interest accrued on the Bonds deposited in such Trust. The Trustee shall be
entitled to reimbursement for such advancement from interest received by the
respective Trust before any further distributions shall be made from the Income
Account to Unitholders of the Trust. The Trustee shall also advance from its
own funds and pay the appropriate persons the amount of any interest which
accrues on any "when, as and if issued" or "delayed delivery" Bonds deposited in
a Trust from the First Settlement Date to the respective dates of delivery to
the Trust of any such Bonds. Subsequent distributions shall be made as
hereinafter provided. Subsequent distributions of funds from the Income Account
of a Trust shall be made on the applicable Record Dates of a Trust as described
herein. On or immediately after each Record Date, the Trustee shall satisfy
itself as to the adequacy of the Reserve Account, making any further credits
thereto as may appear appropriate in accordance with Section 3.04 and shall then
with respect to each Trust:
(i) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to itself
individually the amounts that it is at the time entitled to receive
pursuant to Section 7.04;
(ii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to counsel, as
hereinafter provided for, an amount equal to unpaid fees and expenses, if
any, of such counsel pursuant to Section 3.08, as certified to by the
Depositor; and
(iii) deduct from the Income Account or, to the extent funds are not
available in such Account, from the Capital Account and pay to, or reserve
for, the Depositor the amount that it is entitled to receive pursuant to
Section 3.13."
20. Section 3.05 of the Standard Terms and Conditions of Trust is amended by
adding the following subsection immediately after Section 3.05(a)(iii):
"(iv) Notwithstanding any of the previous provisions, if a Trust has
elected to be taxed as a regulated investment company under the United States
Internal Revenue Code of 1986, as amended, the Trustee is directed to make any
distribution or take any action necessary in order to maintain the qualification
of the Trust as a regulated investment company for federal income tax purposes
or to provide funds to make any distribution for a taxable year in order to
avoid imposition of any income or excise taxes on the Trust or on undistributed
income in the Trust."
21. Section 3.05(b)(ii) of the Standard Terms and Conditions of Trust is
replaced in its entirety with the following:
"(ii) For the purpose of this Section 3.05, the Unitholder's "Income
Distribution" shall be equal to such Unitholder's pro rata share of the cash
balance in the Income Account computed as of the business on the Record Date
immediately preceding such Income Distribution after
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deduction of (1) the fees and expenses then deductible pursuant to Section
3.05(a) and (2) the Trustee's estimate of other expenses properly chargeable to
the Income Account pursuant to the Indenture which have accrued, as of such
Record Date or are otherwise properly attributable to the period to which such
Income Distribution relates."
22. The first paragraph of section 3.06 of the Standard Terms and Conditions
of Trust shall be replaced in its entirety with the following:
"With each distribution from the Income or Capital Accounts of a Trust the
Trustee shall set forth, either in the instrument by means of which payment of
such distribution is made or in an accompanying statement, the amount being
distributed from each such account and, if from the Income Account, the amount
of accrued interest (uncollected and not available for distribution) on the
Monthly Record Date for such distribution, each expressed as a dollar amount per
Unit."
23. Section 3.06(A)(1) of the Standard Terms and Conditions of Trust shall
be replaced in its entirety with the following:
"(1) the amount of income received on the Securities including amounts
received as a portion of the proceeds of any disposition of Securities and
accreted original discount on the Bonds;"
24. Section 3.07 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 3.07. Sale of Securities. (a) If necessary, in order to maintain
the sound investment character of a Trust, the Depositor may direct the Trustee
to sell or liquidate Securities in such Trust at such price and time and in such
manner as shall be determined by the Depositor, provided that the Supervisor has
determined, if appropriate, that any one or more of the following conditions
exist with respect to the Securities to be sold:
(i) that there has been a default on any of the Securities in the
payment of principal, interest or dividends, after declared and when due
and payable; (ii) that any action or proceeding has been instituted at
law or equity seeking to restrain or enjoin the payment of dividends on
Equity Securities, or that there exists any legal question or impediment
affecting such Equity Securities or the payment of dividends from the same;
(iii) that there has occurred any breach of covenant or warranty in any
document relating to the issuer of the Securities which would adversely
affect either immediately or contingently the payment of dividends from the
Equity Securities or the debt service on the Bonds, or the general credit
standing of the issuer or otherwise impair the sound investment character
of such Securities;
(iv) that there has been a default in the payment of dividends,
interest, principal of or income or premium, if any, on any other
outstanding obligations of the issuer or guarantor of such Securities;
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(v) that the price of any Security has declined to such an extent or
other such credit factors exist so that in the opinion of the Supervisor,
as evidenced in writing to the Trustee, the retention of such Securities
would be detrimental to the Trust and to the interest of the Unitholders;
(vi) that all of the Securities in the Trust will be sold pursuant to
termination of the Trust pursuant to Section 9.02 hereof;
(vii) that such sale is required due to Units tendered for redemption;
(viii) that there has been a public tender offer made for a Security or
a merger or acquisition is announced affecting a Security, and that in the
opinion of the Supervisor the sale or tender of the Security is in the best
interest of the Unitholders;
(ix) with respect to an Index Trust, that the Security has been
removed from the Trust's Target Index;
(x) with respect to an Index Trust, that the Security is over-
represented in the Trust's portfolio in comparison to such Security's
weighting in the Trust's Target Index;
(xi) if the Trust has not elected to be taxed as a "regulated
investment company" as defined in the United States Internal Revenue Code
of 1986, as amended, that the sale of such Securities is required in order
to prevent the Trust from being deemed an association taxable as a
corporation for federal income tax purposes;
(xii) if the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, that such sale is necessary or advisable (i) to maintain the
qualification of the Trust as a regulated investment company or (ii) to
provide funds to make any distribution for a taxable year in order to avoid
imposition of any income or excise taxes on the Trust or on undistributed
income in the Trust;
(xiii) that as result of the ownership of the Security, the Trust or its
Unitholders would be a direct or indirect shareholder of a passive foreign
investment company as defined in section 1297 (a) of the United States
Internal Revenue Code of 1986, as amended.
(xiv) that any action or proceeding has been instituted in law or
equity seeking to restrain or enjoin the payment of principal or interest
on any Bonds, attacking the constitutionality of any enabling legislation
or alleging and seeking to have judicially determined the illegality of the
issuing body or the constitution of its governing body or officers, the
illegality, irregularity or omission of any necessary acts or proceedings
preliminary to the issuance of such Bonds, or seeking to restrain or enjoin
the performance by the officers or employees of any such issuing body of
any improper or illegal act in connection with the administration of funds
necessary for debt service on
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such Bonds or otherwise; or that there exists any other legal question or
impediment affecting such Securities or the payment of debt service on the
same;
(xv) that any Bonds are the subject of an advanced refunding. For the
purposes of this Section 3.07(a)(xv), "an advanced refunding" shall mean
when refunding bonds are issued and the proceeds thereof are deposited in
an irrevocable trust to retire the Bonds on or before their redemption
date; or
(xvi) that as of any Record Date any of the Bonds are scheduled to be
redeemed and paid prior to the next succeeding Distribution Date; provided,
however, that as the result of such redemption the Trustee will receive
funds in an amount sufficient to enable the Trustee to include in the next
distribution from the Capital Account at least $1.00 per 100 Units;
(b) In the event a Security is sold pursuant to Section 3.07(a)(v) as a
direct result of serious adverse credit factors affecting the issuer of such
Security and the Trust has elected to be taxed as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, then the Depositor may, but is not obligated, to direct the
reinvestment of the proceeds of the sale of such Security in any other
securities which meet the criteria necessary for inclusion in such Trust on the
Initial Date of Deposit.
(c) In the event a Security is sold pursuant to Section 3.07(a)(ix) and the
Trust has elected to be taxed as a "regulated investment company" as defined in
the United States Internal Revenue Code of 1986, as amended, the Depositor may
direct the reinvestment of the proceeds of the sale of such Security, to the
extent practicable, into any security which replaces such Security as a
component of the Trust's Target Index or, if no security so replaces such
Security, into any other Securities which are under-represented in the Trust's
portfolio in comparison to their weighting in the Trust's Target Index. In the
event a Security is sold pursuant to Section 3.07(a)(x) and the Trust has
elected to be taxed as a "regulated investment company" as defined in the United
States Internal Revenue Code of 1986, as amended, the Depositor may direct the
reinvestment of the proceeds of the sale of such Security, to the extent
practicable, into any other Securities which are under-represented in the
Trust's portfolio in comparison to their weighting in the Trust's Target Index.
Without limiting the generality of the foregoing, in determining whether such
reinvestment is practicable, the Depositor may, but is not obligated to,
specifically consider the ability of the Trust to reinvest such proceeds into
round lots of a Security.
(d) Upon receipt of such direction from the Depositor, upon which the
Trustee shall rely, the Trustee shall proceed to sell or liquidate the specified
Securities in accordance with such direction, and upon the receipt of the
proceeds of any such sale or liquidation, after deducting therefrom any fees and
expenses of the Trustee connected with such sale or liquidation and any
brokerage charges, taxes or other governmental charges shall deposit such net
proceeds in the applicable Capital Account; provided, however, that the Trustee
shall not liquidate or sell any Bonds upon receipt of a direction from the
Depositor pursuant to Section 3.07(a)(xvi), unless the Trustee shall receive on
account of such sale or liquidation the full principal amount of such Bonds,
plus the premium, if any, and the interest accrued and to accrue thereon to the
date of the redemption of such Bonds.
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(e) The Trustee shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale made pursuant to any such
direction or by reason of the failure of the Depositor to give any such
direction, and in the absence of such direction the Trustee shall have no duty
to sell or liquidate any Securities under this Section 3.07.
(f) If Options have been written with respect to Equity Securities, such
Equity Securities cannot be sold or liquidated without also closing out the
related Options positions."
25. Section 3.09 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Notice and Sale by Trustee. If at any time a dividend (once due and
payable) on any of the Equity Securities shall not have been paid or the
principal or interest on any of the Bonds shall be in default and not paid or
provisions for payment thereof shall not have been duly made, within 30 days,
the Trustee shall notify the Depositor thereof. If within thirty days after
such notification the Depositor has not given any instruction to sell or to hold
or has not taken any other action in connection with such Securities, the
Trustee may in its discretion sell such Securities forthwith, and the Trustee
shall not be liable or responsible in any way for depreciation or loss incurred
by reason of such sale."
26. The first paragraph of Section 3.11 of the Standard Terms and
Conditions of Trust shall be replaced in its entirety with the following: "In
the event that the Trustee shall have been notified at any time of any action to
be taken or proposed to be taken by holders of the Securities (including but not
limited to the making of any demand, direction, request, giving of any notice,
consent or waiver or the voting with respect to any matter relating to the
Securities), the Trustee shall promptly notify the Depositor and shall thereupon
take such action or refrain from taking any action as the Depositor shall in
writing direct; provided, however, that if the Depositor shall not within five
Business Days of the giving of such notice to the Depositor direct the Trustee
to take or refrain from taking any action, the Trustee shall take such action or
refrain from taking any action, (i) so as to insure that the Equity Securities
are voted as closely as possible in the same manner and the same general
proportion, with respect to all issues, as are shares of such Equity Securities
that are held by owners other than the Trust and (ii) as it, in its sole
discretion, shall deem advisable with respect to the Bonds."
27. 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 shall at the direction of the Depositor, vote
for or against, or accept or reject, any offer for new or exchanged securities
or property in exchange for a Trust Security. Should any issuance, exchange or
substitution be effected, any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if securities or property, by
the Trustee pursuant to the Depositor's direction, unless the Depositor advises
the Trustee to keep such securities or property."
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28. Section 3.12(a) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"(a) The Replacement Securities shall be Securities as originally selected
for deposit in the Trust or securities which the Depositor determines to be
similar in character as Securities originally selected for deposit in the
Trust;"
29. The third paragraph of Section 3.13 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.13 shall be secured
by a lien on the related Trust in favor of the Depositor prior to the interest
of Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 7.04 herein. To the extent of such
lien, the Trustee shall hold the assets of the Trust for the benefit of the
Depositor, provided that the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary course of the
administration of the Trust without regard to such lien."
30. The Depositor's annual compensation as set forth under Section 3.13
shall be that dollar amount per 100 Units set forth under "Investment Summary--
Fees and Expenses--Annual operating expenses--Supervisory, evaluation and
administration fees" in the Prospectus for the Trust.
31. Section 3.14 of the Standard Terms and Conditions of Trust is hereby
amended by adding the following immediately after the second paragraph:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.14 shall be secured
by a lien on the related Trust in favor of the Depositor prior to the interest
of Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 7.04 herein. To the extent of such
lien, the Trustee shall hold the assets of the Trust for the benefit of the
Depositor, provided that the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary course of the
administration of the Trust without regard to such lien."
32. Section 3.15 of the Standard Terms and Conditions of Trust is hereby
amended by adding the following immediately after the first paragraph:
"To the extent permitted by applicable laws, rules and regulations, any
moneys payable to the Depositor pursuant to this Section 3.15 shall be secured
by a lien on the related Trust in favor of the Depositor prior to the interest
of Unitholders, but no such lien shall be prior to any lien in favor of the
Trustee under the provisions of Section 7.04 herein. To the extent of such
lien, the Trustee shall hold the assets of the Trust for the benefit of the
Depositor, provided that the Trustee is authorized to make dispositions,
distributions and payments for expenses in the ordinary course of the
administration of the Trust without regard to such lien."
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33. The Standard Terms and Conditions of Trust shall be amended to include
the following sections:
"Section 3.18. Regulated Investment Company Election. If the Prospectus
for a Trust states that such Trust intends to elect to be treated and to qualify
as a "regulated investment company" as defined in the United States Internal
Revenue Code of 1986, as amended, the Trustee is hereby directed to make such
elections and take all actions, including any appropriate election to be taxed
as a corporation, as shall be necessary to effect such qualification or to
provide funds to make any distribution for a taxable year in order to avoid
imposition of any income or excise tax on the Trust or on undistributed income
in the Trust. The Trustee shall make such reviews of each Trust portfolio as
shall be necessary to maintain qualification of a particular Trust as regulated
investment company and to avoid imposition of tax on a Trust or undistributed
income in a Trust, and the Depositor and Supervisor shall be authorized to rely
conclusively upon such reviews.
Section 3.19. Refunding Bonds. In the event that an offer shall be made
by an obligor of any of the Bond in a Trust to issue new obligations in exchange
and substitution for any issue of Bonds pursuant to a plan for the refunding or
refinancing of such Bonds, the Depositor shall instruct the Trustee in writing
to reject such offer and either to hold or sell such Bonds, except that if
(1) the issuer is in default with respect to such Bonds or (2) in the opinion of
the Depositor, given in writing to the Trustee, the issuer will probably default
with respect to such Bonds in the reasonably foreseeable future, the Depositor
shall instruct the Trustee in writing to accept or reject such offer or take any
other action with respect thereto as the Depositor may deem proper. Any
obligation so received in exchange shall be deposited hereunder and shall be
subject to the terms and conditions of this Indenture to the same extent as the
Bonds originally deposited hereunder. Within five days after such deposit,
notice of such exchange and deposit shall be given by the Trustee to each
Unitholder of such Trust, including an identification of the Bonds eliminated
and the securities substituted therefor.
Section 3.20. Trustee Not Required to Amortize. Nothing in this
Indenture, or otherwise, shall be construed to require the Trustee to make any
adjustments between the Income and Capital Accounts of any Trust by reason of
any premium or discount in respect of any of the Bonds."
34. Section 5.01 of Standard Terms and Conditions of Trust shall be replaced
in its entirety with the following:
Section 5.01. Evaluation of Securities. (a) The Evaluator shall determine
separately, and shall promptly furnish to the Trustee and the Depositor upon
request, the value of each issue of Securities (including Contract Securities)
("Evaluation") as of the Evaluation Time (i) on each Business Day during the
period which the Units are being offered for sale to the public and (ii) on any
other day on which a Trust Evaluation is to be made pursuant to Section 6.01 or
which is requested by the Depositor or the Trustee. As part of the Trust
Evaluation, the Evaluator shall determine separately and promptly furnish to the
Trustee and the Depositor upon request the Evaluation of each issue of
Securities initially deposited in a Trust on the Initial Date of Deposit. The
Evaluator's determination of the offering prices of the Securities on the
Initial Date of
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Deposit shall be included in the Schedules attached to the Trust Agreement.(b)
During the initial offering period of a Trust (as determined by the Depositor)
such Evaluation shall be made in the following manner: if the Securities are
listed on a national or foreign securities exchange, such Evaluation shall
generally be based on the last available closing sale price on or immediately
prior to the Evaluation Time on the exchange which is the principal market
therefor, which shall be deemed to be the New York Stock Exchange if the
Securities are listed thereon (unless the Evaluator deems such price
inappropriate as a basis for evaluation) or, if there is no such available
closing sale price on such exchange or market at the last available ask prices
of the Securities. If the Securities are not so listed or, if so listed and the
principal market therefor is other than on such exchange, or if there is no such
available sale price on such exchange or if the Evaluator determines that such
price is inappropriate as a basis for evaluation, such Evaluation shall
generally be based on the following methods or any combination thereof whichever
the Evaluator deems appropriate: (i) in the case of Equity Securities and
Options, on the basis of the current ask price on the over-the-counter market
(unless the Evaluator deems such price inappropriate as a basis for evaluation),
(ii) on the basis of current offering prices for the Bonds as obtained from
investment dealers or brokers who customarily deal in securities comparable to
those held by the trust; (iii) if current ask or offering prices are not
available for the Securities, on the basis of current ask or offering prices for
comparable securities, (iv) by determining the valuation of Securities on the
ask or offering side of the market by appraisal, (v) by causing the value of the
Securities to be determined by others engaged in the practice of evaluation,
quoting or appraising comparable securities or (vi) by any combination of the
above. If the Trust holds Securities denominated in a currency other than U.S.
dollars, the Evaluation of such Security shall be converted to U.S. dollars
based on current offering side exchange rates (unless the Evaluator deems such
prices inappropriate as a basis for valuation). As used herein, the closing
sale price is deemed to mean the most recent closing sale price on the relevant
securities exchange at or immediately prior to the Evaluation Time. For each
Evaluation, the Trustee shall also confirm and furnish to the Depositor the
calculation of the Trust Evaluation to be computed pursuant to Section 6.01.(c)
After the initial offering period of Units of a Trust (as determined by the
Depositor), Evaluation of the Securities shall be made in the manner described
in Section 5.01(b), on the basis of the bid side value of the relevant currency
exchange rate expressed in U.S. dollars and, except in those cases in which the
Securities are listed on a national or foreign securities exchange and the last
available sale prices are utilized, on the basis of the last available bid price
of the Securities. In addition, the Evaluator may reduce the Evaluation of each
Security which is principally traded outside of the United States by the amount
of any liquidation costs (other than brokerage costs incurred on any national
securities exchange) and any capital gains or other taxes which would be
incurred by the Trust upon the sale of such Security, such taxes being computed
as if the Security were sold on the date of the Evaluation.
35. The first paragraph of Section 6.01 of Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"As of the Evaluation Time (a) on the last Business Day of each year, (b)
on the day on which any Unit is tendered for redemption and (c) on any other day
desired by the Trustee or requested by the Depositor, the Trustee shall: Add (i)
all moneys on deposit in a Trust or moneys in the process of being collected
from matured interest coupons or bonds matured or called for redemption prior to
maturity (excluding (1) cash, cash equivalents or Letters of Credit deposited
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pursuant to Section 2.01 hereof for the purchase of Contract Securities, unless
such cash or Letters of Credit have been deposited in the Income and Capital
Accounts because of failure to apply such moneys to the purchase of Contract
Securities pursuant to the provisions of Sections 2.01, 3.02 and 3.03 hereof and
(2) moneys credited to the Reserve Account pursuant to Section 3.04 hereof),
plus (ii) the aggregate Evaluation of all Securities (including Contract
Securities and additional Securities for which purchase contracts have been
entered into pursuant to the Depositor's instructions pursuant to clause (ii) of
the first sentence of Section 2.01(b), less the purchase price of such
contracts) on deposit in such Trust (such Evaluation to be made on the basis of
the aggregate underlying value of the Securities as determined in
Section 5.01(b) for the purpose of computing redemption value of Units as set
forth in Section 6.02 hereof), plus (iii) all other income from the Securities
(including dividends receivable on the Equity Securities trading ex-dividend as
of the date of such valuation and including interest accrued on the Bonds not
subject to collection and distribution) as of the Evaluation Time on the date of
such Evaluation together with all other assets of such Trust. For each such
computation there shall be deducted from the sum of the above (i) amounts
representing any applicable taxes or charges payable out of the respective Trust
and for which no deductions shall have previously been made for the purpose of
addition to the Reserve Account, (ii) amounts representing estimated accrued
expenses of such Trust including but not limited to unpaid fees and expenses of
the Trustee, the Evaluator, the Supervisor, the Depositor and counsel, in each
case as reported by the Trustee to the Depositor on or prior to the date of
computation, (iii) amounts representing unpaid organization costs, (iv) if the
Prospectus for a Trust provides that the creation and development fee, if any,
accrues on a daily basis, amounts representing unpaid accrued creation and
development fees, (v) if the Prospectus for a Trust provides that the deferred
sales charge, if any, accrues on a daily basis, amounts representing unpaid
accrued deferred sales charge, and (vi) any moneys identified by the Trustee, as
of the date of such computation, as held for distribution to Unitholders of
record as of an Income or Capital Account Record Date, or for payment of the
Redemption Price of Units tendered, prior to such date. The resulting figure is
herein called a "Trust Evaluation." The value of the pro rata share of each Unit
of the respective Trust determined on the basis of any such evaluation shall be
referred to herein as the "Unit Value." Amounts receivable by the Trust in
foreign currency shall be reported to the Evaluator who shall convert the same
to U.S. dollars based on current exchange rates, in the same manner as provided
in Section 5.01(b) or 5.01(c), as applicable, for the conversion of the
valuation of foreign Securities, and the Evaluator shall report such conversion
with each Evaluation made pursuant to Section 5.01."
36. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, no Unitholder may request a distribution of Securities in-
kind pursuant to Sections 6.02, 6.05 or 9.02.
37. The first sentence of Section 6.02 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"Any Unit tendered for redemption by a Unitholder or his duly authorized
attorney to the Trustee at its unit investment trust division office, currently
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, tendered by means of an
appropriate request for redemption in form approved by the Trustee shall be
redeemed by the Trustee no later than the seventh calendar day
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following the day on which tender for redemption is made, provided that if such
day of redemption is not a Business Day, then such Unit shall be redeemed on the
first Business Day prior thereto (being herein called the "Redemption Date")."
38. The first sentence of Section 7.04 of the Standard Terms and Conditions
of Trust is replaced in its entirety by the following:
"For services performed under this Indenture the Trustee shall be paid an
annual fee in the amount per Unit set forth in the Trust Agreement, which fee
shall accrue daily and be computed based on the number of Units outstanding as
of January 1 of such year except for a Trust during the year or years in which
an initial offering period as determined in Section 5.01 of this Indenture
occurs, in which case the fee for a month is based on the number of Units
outstanding at the end of such month (such annual fee to be pro rated for any
calendar year in which the Trustee provides services during less than the whole
of such year)."
39. The Trustee's annual compensation as set forth under Section 7.04 shall
be $0.0105 per Unit.
40. Section 9.01 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 9.01. Amendments. (a) This Indenture may be amended from time to
time by the Depositor and Trustee or their respective successors, without the
consent of any of the Unitholders, (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision contained herein, (ii) to make such other provision in
regard to matters or questions arising hereunder as shall not materially
adversely affect the interests of the Unitholders or (iii) to make such
amendments as may be necessary (a) for the Trust to continue to qualify as a
regulated investment company for federal income tax purposes if the Trust has
elected to be taxed as such under the United States Internal Revenue Code of
1986, as amended, or (b) to prevent the Trust from being deemed an association
taxable as a corporation for federal income tax purposes if the Trust has not
elected to be taxed as a regulated investment company under the United States
Internal Revenue Code of 1986, as amended. This Indenture may not be amended,
however, without the consent of all Unitholders then outstanding, so as (1) to
permit, except in accordance with the terms and conditions hereof, the
acquisition hereunder of any Securities other than those specified in the
Schedules to the Trust Agreement or (2) to reduce the aforesaid percentage of
Units the holders of which are required to consent to certain of such
amendments. This Indenture may not be amended so as to reduce the interest in a
Trust represented by Units without the consent of all affected Unitholders.
(b) Except for the amendments, changes or modifications as provided in
Section 9.01(a) hereof, neither the parties hereto nor their respective
successors shall consent to any other amendment, change or modification of this
Indenture without the giving of notice and the obtaining of the approval or
consent of Unitholders representing at least 66 2/3% of the Units then
outstanding of the affected Trust. Nothing contained in this Section 9.01(b)
shall permit, or be construed as permitting, a reduction of the aggregate
percentage of Units the holders of which
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are required to consent to any amendment, change or modification of this
Indenture without the consent of the Unitholders of all of the Units then
outstanding of the affected Trust and in no event may any amendment be made
which would (1) alter the rights to the Unitholders as against each other,
(2) provide the Trustee with the power to engage in business or investment
activities other than as specifically provided in this Indenture, (3) adversely
affect the tax status of the Trust for federal income tax purposes or result in
the Units being deemed to be sold or exchanged for federal income tax purposes
or (4) unless the Trust has elected to be taxed as a regulated investment
company for federal income tax purposes, result in a variation of the investment
of Unitholders in the Trust.
(c) Unless the Depositor directs that other notice shall be provided, the
Trustee shall include in the annual report provided pursuant to Section 3.06
notification of the substance of such amendment."
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IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to be
executed; all as of the day, month and year first above written.
ADVISORS ASSET MANAGEMENT, INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------
Senior Vice President
THE BANK OF NEW YORK MELLON
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
ADVISORS DISCIPLINED TRUST 1400
Incorporated herein by this reference and made a part hereof
is the schedule set forth under "Portfolio" in the Prospectus for the Trust.