EXHIBIT 1.1
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 366
TRUST AGREEMENT
Dated: October 10, 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 of the Trust, 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 Schedule 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 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
Trust is that number of Units set forth under "Initial number of Units" for the
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 March 10,
2003 and the 10th day of each month thereafter through July 10, 2003.
7. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" for the 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. The term "Mutual Fund" shall mean any open-end management
investment company, equity securities of which are deposited in a Trust."
10. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the term "Equity Securities" shall be replaced with "Mutual
Fund Shares" in each instance it occurs and the term "Mutual Fund Shares" shall
mean any equity securities of a Mutual Fund deposited in a Trust.
11. The term "Rule 12b-1 Fees" shall mean any payments received by the
Depositor or an affiliate of the Depositor with respect to Mutual Fund Shares
deposited in a Trust pursuant to a plan adopted by a Mutual Fund in accordance
with Rule 12b-1 under the Investment Company Act of 1940.
12. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the maturity value of the Zero Coupon Obligations on a per
Unit basis shall equal at least $10.00 rather than $11.00.
13. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the Depositor and any affiliate of the Depositor shall
rebate any Rule 12b-1 Fees to a Trust.
14. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, if the Trustee sells, redeems or otherwise liquidates
Mutual Fund Shares pursuant to Section 6.02 to satisfy Unit redemptions or
pursuant to Section 7.04 to pay Trust expenses, the Trustee shall do so, as
nearly as practicable, on a pro rata basis among all Mutual Fund Shares held by
the Trust.
15. Section 3.02 of the Standard Terms and Conditions of Trust shall
be amended by inserting the following immediately after the parenthetical
in the first sentence of the first paragraph of such Section 3.02: "and any
rebated Rule 12b-1 Fees".
16. Section 3.11 shall be revised by inserting the following section
at the end of the first paragraph of such Section:
"Notwithstanding the foregoing, 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 Mutual
Fund Shares deposited in a Trust, the Trustee shall take such action or
omit from taking any action, as appropriate, so as to insure that such
Mutual Fund Shares are voted as closely as possible in the same manner
and the same general proportion, with respect to all issues, as are the
shares of such Mutual Fund held by owners other than the Trust."
17. Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, the Supervisor shall not be entitled to receive the
compensation set forth in Section 4.01 with respect to the Trust.
18. Section 5.01(b) shall be revised by replacing (i) through (iv) in
the second sentence of such Section with the following:
"(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 or traded on the Nasdaq Stock Market,
Inc., such Evaluation shall generally be based on the last available
closing sale price on or immediately prior to the Evaluation Time on
the exchange or market 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 Trustee 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 asked
price of the Securities. If the Securities are not listed on such an
exchange or traded on the Nasdaq Stock Market, Inc. or, if so listed
and the principal market therefor is other than on such exchange or
market, or there is no such available sale price on such exchange or
market, such Evaluation shall generally be based on the following
methods or any combination thereof whichever the Trustee deems
appropriate: (i) in the case of Mutual Fund Shares, on the basis of
the current net asset value of such shares as determined by the
issuers of the Mutual Fund Shares, (ii) on the basis of current
offering prices for the Zero Coupon Obligations as obtained from
investment dealers or brokers who customarily deal in securities
comparable to those held by the Fund, (iii) if offering prices are not
available for the Zero Coupon Obligations, on the basis of offering
price for comparable securities, (iv) by determining the valuation of
the Zero Coupon Obligations on the offering side of the market by
appraisal or (v) 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 Trustee deems such
prices inappropriate as a basis for valuation). The Trustee may add to
the Evaluation of each Security which is principally traded outside of
the United States the amount of any commissions and relevant taxes
associated with the acquisition of the Security. 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."
19. Section 5.01(c) shall be replaced with the following:
(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
current net asset value of Mutual Fund Shares as determined by the
issuers of the Mutual Fund Shares, the current bid prices for Zero
Coupon Obligations, the bid side value of any 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 or traded on the Nasdaq Stock Market, Inc. and the last
available sale prices are utilized, on the basis of the last available
bid price of other Securities. In addition, the Trustee (i) shall not
make the addition specified in the fourth sentence of Section 5.01(b)
and (ii) may reduce the Evaluation of each Security which is
principally traded outside of the United States by the amount of any
liquidation costs 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."
20. The first paragraph of Section 6.01 shall be replaced in its
entirety with the following:
"Section 6.01. Trust Evaluation. As of the Evaluation Time (a)
on the last Business Day of each year, (b) on the day on which any Unit
is tendered for redemption and (c) on any other day desired by the
Trustee or requested by the Depositor, the Trustee shall: Add (i) all
moneys on deposit in a Trust (excluding (1) cash, cash equivalents or
Letters of Credit deposited pursuant to Section 2.01 hereof for the
purchase of Contract Securities, unless such cash or Letters of Credit
have been deposited in the 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) on deposit in such Trust (such
Evaluation to be made on the basis of bid prices (if Zero Coupon
Obligations are sold on such day, then such Evaluation for the Zero
Coupon Obligations shall be at the weighted average of the execution
prices for all Zero Coupon Obligations sold on such day) for Zero
Coupon Obligations, the current net asset value for Mutual Fund Shares
and the aggregate underlying value of any other Securities as
determined in Section 5.01 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
Securities trading ex-dividend as of the date of such valuation and
accrued rebate of Rule 12b-1 Fees as reported to the Trustee upon which
notification the Trustee is authorized conclusively to rely) 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 Supervisor, the Depositor and counsel, in
each case as reported by the Trustee to the Depositor on or prior to
the date of computation, and (iii) 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 converted by the Trustee 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 Trustee shall report such conversion
with each Evaluation made pursuant to Section 5.01."
21. The first sentence of the seventh paragraph of Section 6.02 shall
be replaced in its entirety by the following:
"Notwithstanding anything to the contrary in this Section
6.02, if and to the extent the Prospectus for the Trust provides for
in-kind distributions of Securities, a Unitholder may request at the
time of tender to receive from the Trustee in lieu of cash such
Unitholder's pro rata share of each Mutual Fund Share then held by such
Trust provided that the In-Kind Distribution of Mutual Fund Shares of
each Mutual Fund to such Unitholder equals at least the minimum
investment required by such Mutual Fund and such Unitholder is eligible
to be a shareholder of such Mutual Fund Shares."
22. Section 9.02(d)(i)(y) shall be replaced in its entirety with the
following:
"(y) such holder's pro rata portion of each Mutual Fund Share
segregated for distribution in kind in whole shares or fractional
shares to the extent of the fractional portion of a share may be
transferred on the transfer books of the Mutual Fund,"
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/ XXXXXXXX XXXXXXXXXX
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Executive Director
XXX XXXXXX INVESTMENT ADVISORY CORP.
By /s/ XXXXXXXX XXXXXXXXXX
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Assistant Treasurer
THE BANK OF NEW YORK
By /s/ XXXXXXX X'XXXXX
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Assistant Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 366
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus.]