Exhibit 1.1
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 392
TRUST AGREEMENT
Dated: May 1, 2003
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 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" 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,
2003 and the 10th day of each month thereafter through December 10,
2003.
7. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" 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."
11. The second sentence of Section 7.01(e)(2)(E) shall be replaced in its
entirety by "Such Prospectus shall also contain disclosure concerning
the Depositor's responsibilities described in (D) above."
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 392
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus.]
