Exhibit 1.1
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 339
TRUST AGREEMENT
Dated: April 18, 2002
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The
Bank of New York, as Trustee, and Xxx Xxxxxx Investment Advisory Corp., as
Supervisor, sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "Standard Terms and Conditions
of Trust For Xxx Xxxxxx Focus Portfolios, Effective for Unit Investment Trusts
Established On and After May 2, 2001 (Including Series 284 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 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 Trusts
represented by each Unit thereof referred to in Section 1.01(56) is initially an
amount the numerator of which is one and the denominator of which is the amount
set forth under "Initial number of Units" for the Trust in the "Summary of
Essential Financial Information" in the Prospectus.
3. The aggregate number of Units described in Section 2.03(a) for the
Trusts is that number of Units set forth under "Initial number of Units" for
each Trust in the "Summary of Essential Financial Information" in the
Prospectus.
4. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Distribution Dates" set forth in the "Summary
of Essential Financial Information" in the Prospectus.
5. The terms "Capital Account Record Date" and "Income Account Record
Date" shall mean the "Record Dates" set forth in the "Summary of Essential
Financial Information" in the Prospectus.
6. The term "Deferred Sales Charge Payment Date" shall mean August 10,
2002 and the 10th day of each month thereafter through December 10, 2002.
7. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" for each Trust set forth in the "Summary of Essential
Financial Information" in the Prospectus.
8. The Trustee's annual compensation rate described in Section 7.04
shall be that amount set forth under "Trustee's fee and operating expenses" in
the "Fee Table" in the Prospectus.
9. Section 2.01(b) shall be replaced in its entirety by the following:
"(b) From time to time following the Initial Date of Deposit,
the Depositor, or the Distribution Agent acting on behalf of Rollover
Unitholders, is hereby authorized, in its discretion, to assign, convey
to and deposit with the Trustee (i) additional Securities, duly
endorsed in blank or accompanied by all necessary instruments of
assignment and transfer in proper form (or purchase contracts relating
to Contract Securities), and/or (ii) cash (or a Letter of Credit in
lieu of cash) with instructions to purchase additional Securities, in
an amount equal to the portion of the Unit Value of the Units created
by such deposit attributable to the Securities to be purchased pursuant
to such instructions. Such deposit of additional Securities or cash
with instructions to purchase additional Securities shall be made, in
each case, pursuant to a Supplemental Indenture accompanied by a legal
opinion issued by legal counsel satisfactory to the Depositor.
Instructions to purchase additional Securities shall be in writing, and
shall specify the name of the Security, CUSIP number, if any, aggregate
amount, price or price range and date to be purchased. When requested
by the Trustee, the Depositor shall act as broker or agent to execute
purchases in accordance with such instructions; the Depositor shall be
entitled to compensation therefor in accordance with applicable law and
regulations. The Trustee shall have no liability for any loss or
depreciation resulting from any purchase made pursuant to the
Depositor's instructions or made by the Depositor as broker, except by
reason of its own negligence, lack of good faith or willful misconduct.
In connection with any deposit pursuant to this Section
2.01(b) in an Equity and Treasury Trust, the Depositor shall be
obligated to determine that the maturity value of the Zero Coupon
Obligations included in the deposit, divided by the number of Units
created by reason of the deposit, shall equal at least $11.00.
The Depositor, or the Distribution Agent acting on behalf of
Rollover Unitholders, in each case, shall ensure that each deposit of
additional Securities pursuant to this Section shall be, as nearly as
is practicable, in the identical ratio as the Percentage Ratio for such
Securities. With respect to an Index Trust, such additional Securities
may be deposited or purchased in round lots; if the amount of the
deposit is insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or purchased in
the order of the Securities in the Trust most under-represented in the
Trust's portfolio in comparison to their weighting in the Trust's
Target Index. The Depositor shall deliver the additional Securities
which were not delivered concurrently with the deposit of additional
Securities and which were represented by Contract Securities within 10
calendar days after such deposit of additional Securities (the
"Additional Securities Delivery Period"). If a contract to buy such
Securities between the Depositor and seller is terminated by the seller
thereof for any reason beyond the control of the Depositor or if for
any other reason the Securities are not delivered to the Trust by the
end of the Additional Securities Delivery Period for such deposit, 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 10 calendar days of the end of the Additional Securities
Delivery Period, the Trustee shall forthwith take the action specified
in Section 3.12."
10. Section 6.05(a) shall be replaced in its entirety by the following:
"(a) If the Depositor shall offer a subsequent series of a
Trust (the "New Series"), the Trustee shall, if so directed and at the
time specified by the Depositor, send a form of election to Unitholders
(which may be included in the notice sent to Unitholders specified in
Section 9.02) whereby Unitholders, whose redemption distribution would
be in an amount sufficient to purchase at least one Unit of the New
Series, may elect to (i) have their Units redeemed through an In Kind
Distribution in the manner provided in Section 6.02, (ii) have the
Distribution Agent make a determination as to which Securities, if any,
are identical to securities contained in the New Series ("Common
Securities"), (iii) have the Distribution Agent sell Securities which
are not Common Securities, and (iv) have the Common Securities and the
cash proceeds from the sale of other Securities applied by the
Distribution Agent to purchase Units of the New Series, all as
hereinafter provided. The Trustee shall honor properly completed
election forms returned to the Trustee, accompanied by any Certificate
evidencing Units tendered for redemption or a properly completed
redemption request with respect to uncertificated Units, by its close
of business five days prior to the Special Redemption Date.
All Units so tendered by a Unitholder (a "Rollover
Unitholder") shall be redeemed and canceled on the Special Redemption
Date. Subject to payment by such Rollover Unitholder of any tax or
other governmental charges which may be imposed thereon, such
redemption is to be made through an In Kind Distribution pursuant to
Section 6.02 by distribution of cash and/or Securities to the
Distribution Agent on the Special Redemption Date (herein called the
"Rollover Distribution"). Any Securities that are made part of the
Rollover Distribution shall be valued for purposes of the Rollover
Distribution as of the Special Redemption Date.
The Distribution Agent shall determine, based on the value of
a Unitholder's Rollover Distribution, the maximum number of Units of
the New Series such Unitholder is able to purchase using such Rollover
Distribution. Thereafter, based upon the composition of the portfolio
securities of the New Series, the Distribution Agent will calculate the
number of Common Securities to be contributed to create the requisite
number of Units of the New Series specified above. All Securities,
other than the Common Securities to be contributed to the New Series,
included in a Unitholder's Rollover Distribution shall be sold by the
Distribution Agent on the Special Redemption Date pursuant to the
Depositor's direction, and the Distribution Agent may employ the
Depositor as broker or agent in connection with such sales. For such
brokerage services, the Depositor shall be entitled to compensation at
its customary rates, provided however, that its compensation shall not
exceed the amount authorized by applicable laws and regulations. In the
event the Depositor does not direct the manner in which Securities are
to be sold, the Securities shall be sold in such manner as the
Distribution Agent, in its sole discretion, shall determine. The
Distribution Agent shall have no responsibility for any loss or
depreciation incurred by reason of any sale made pursuant to this
Section 6.05.
Upon each trade date for sales of non-Common Securities
included in the Rollover Unitholder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unitholder, enter
into a contract with the Depositor to purchase from the Depositor Units
of the New Series (if any), at the public offering price for such Units
on the Special Redemption Date or, if so instructed by the Rollover
Unitholder, such other date as may be permitted by and described in the
Prospectus. Such contract shall provide for purchase of the maximum
number of Units of the New Series whose purchase price is equal to or
less than the value of the Common Securities to be contributed and the
cash proceeds held by the Distribution Agent for the Unitholder on such
day (including therein the proceeds anticipated to be received in
respect of Securities traded on such day net of all brokerage fees,
governmental charges and any other expenses incurred in connection with
such sale), to the extent Units are available for purchase from the
Depositor. In the event a sale of non-Common Securities included in the
Rollover Unitholder's Rollover Distribution shall not be consummated in
accordance with its terms, the Distribution Agent shall apply the cash
proceeds held for such Unitholder as of the settlement date for the
purchase of Units of the New Series to purchase the maximum number of
Units of the New Series which such cash balance will permit, and the
Depositor agrees that the settlement date for Units of the New Series
whose purchase was not consummated as a result of insufficient funds
will be extended until cash proceeds from the Rollover Distribution are
available in a sufficient amount to settle such purchase. If the
Unitholder's Rollover Distribution will produce insufficient cash
proceeds to purchase all of the Units of the New Series contracted for,
the Depositor agrees that the contract shall be rescinded with respect
to the Units of the New Series as to which there was a cash shortfall
without any liability to the Rollover Unitholder or the Distribution
Agent. Any cash balance remaining after such purchase shall be
distributed within a reasonable time to the Rollover Unitholder. Units
of the New Series will be uncertificated unless and until the Rollover
Unitholder requests a certificate. Any cash held by the Distribution
Agent shall be held in a non-interest bearing account which will be of
benefit to the Distribution Agent in accordance with normal banking
procedures. Neither the Trustee nor the Distribution Agent shall have
any responsibility or liability for loss or depreciation resulting from
any reinvestment made in accordance with this Section 6.05, or for any
failure to make such reinvestment in the event the Depositor does not
make Units available for purchase."
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to
be executed; all as of the day, month and year first above written.
XXX XXXXXX FUNDS INC.
By /s/ XXXX X. XXXXXX
-------------------------------------------------
Executive Director, General Counsel and Assistant
Secretary
XXX XXXXXX INVESTMENT ADVISORY CORP.
By /s/ XXXX X. XXXXXX
-------------------------------------------------
Executive Director, General Counsel and Assistant
Secretary
THE BANK OF NEW YORK
By /s/ XXXXXXX X'XXXXX
----------------------------------------
Assistant Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 339
[Incorporated herein by this reference and made a part hereof is each
"Portfolio" schedule as set forth in the Prospectus.]
