XXX XXXXXX UNIT TRUSTS, SERIES 796
TRUST AGREEMENT
Dated: September 23, 2008
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The
Bank of New York Mellon, as Trustee and Xxx Xxxxxx Asset Management, 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 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 "Units outstanding" for the Trust in the "Statement of
Condition" 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 "Units outstanding" for a Trust in the
"Statement of Condition" in the Prospectus.
4. Section 1.01(5) is replaced in its entirety by the following:
"(5) "Business Day" shall mean any day on which the New York Stock
Exchange is open for regular trading."
5. The terms "Capital Account Distribution Date" and "Income Account
Distribution Date" shall mean the "Distribution Dates" set forth in the
"Essential Information" in the Prospectus.
6. The terms "Capital Account Record Date" and "Income Account Record Date"
shall mean the "Record Dates" set forth in the "Essential Information" in the
Prospectus.
7. The term "Deferred Sales Charge Payment Date" shall mean February 10,
2009 and the tenth day of each month thereafter through June 10, 2009 with
respect to the amount designated "Deferred sales charge in the first year" in
the "Fee Table" in the Prospectus and February 10, 2009, and the tenth day of
each month thereafter through April 10, 2010, with respect to the amount
designated "Deferred sales charge in second year" in the "Fee Table" in the
Prospectus.
8. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" for each Trust set forth in the "Essential Information" in the
Prospectus.
9. The term "Supervisor" shall mean Xxx Xxxxxx Asset Management and its
successors in interest, or any successor portfolio supervisor as provided in the
Standard Terms and Conditions of Trust.
10. The term "Trustee" shall mean The Bank of New York Mellon and its
successors in interest or any successor trustee appointed as provided in the
Standard Terms and Conditions of Trust.
11. The second sentence of section 2.01(b) is hereby deleted.
12. Section 3.05 is amended by adding the following subsection immediately
after Section 3.05(a)(iv):
"(v) 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."
13. Section 3.07(a)(xiii) of the Standard Terms and Conditions of Trust
shall be replaced in its entirety by the following:
"(xiii) 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; or
(xiv) 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."
14. If a Trust has elected to be treated as a "regulated investment
company" as defined in the United States Internal Revenue Code of 1986, as
amended, 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 by
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 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."
15. 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, Section 3.12(a) of the Standard Terms and Conditions of Trust shall be
replaced in its entirety by the following:
"(a) The Replacement Securities shall be Zero Coupon Obligations or
Equity 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, and any
Replacement Securities which are Zero Coupon Obligations must have the
same maturity value as the Failed Contract Security and, as close as
is reasonably practical, the same maturity date, which must be on or
prior to the Mandatory Termination Date;"
16. The Standard Terms and Conditions of Trust shall be amended to include
the following section:
"Section 3.19. 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.
17. Sections 5.01(b) and (c) are replaced in their entirety by the
following:
"(b) During the initial offering period of a Trust (as determined by
the Depositor), the Evaluation for each Security shall be made in the
following manner: (i) with respect to Securities for which market
quotations are readily available, such Evaluation shall be made on the
basis of the market value of such Securities; and (ii) with respect to
other Securities' such Evaluation shall be made on the basis of the
fair value of such Securities as determined in good faith by the
Trustee. If the Securities are listed on a national or foreign
securities exchange or traded on the Nasdaq Stock Market, Inc. and
market quotations of such Securities are readily available, the market
value of such Securities 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. In the case of Zero Coupon Obligations,
such Evaluation shall be made on the basis of current offer side
prices for the Zero Coupon Obligations as obtained from investment
dealers or brokers who customarily deal in securities comparable to
those held by the Trust and, if offer side prices are not available
for the Zero Coupon Obligations, on the basis of offer side price for
comparable securities, by determining the valuation of the Zero Coupon
Obligations on the offer side of the market by appraisal or 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). 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
current bid side prices for Zero Coupon Obligations and the bid side
value of any relevant currency exchange rate expressed in U.S.
dollars."
18. Section 6.02 of the Standard Terms and Conditions of Trust shall be
amended by adding the following to the end of such Section:
"Notwithstanding anything to the contrary herein, each Unitholder who
holds Units designated with a "Classic CUSIP" number will be deemed to
have tendered all Units then owned for redemption to the Trustee on
the Special Redemption Date for the related Trust set forth under
"Essential Information" in the Prospectus and shall have such Units
redeemed on such date as provided herein."
19. The seventh paragraph of Section 6.02 is hereby replaced in its
entirety by the following:
"Notwithstanding anything to the contrary in this Section 6.02, if the
Prospectus for a Trust provides for in kind distribution of Securities
in connection with Unit redemptions and a Unitholder tenders at least
the minimum number of Units stated in such Prospectus for redemption,
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
Security then held by such Trust, provided that the Security is
principally traded in the United States if such limitation is set
forth in the Prospectus for the Trust. Such tendering Unitholder will
receive his pro rata number of whole shares of each of such Securities
comprising the portfolio of such Trust and cash from the Capital
Account equal to the value of the fractional shares and any Securities
principally traded outside the United States to which such tendering
Unitholder is entitled and in the case of an Equity and Treasury Trust
such Unitholder's pro rata share of the Zero Coupon Obligations held
by such Trust. Such pro rata share of each Security and the related
cash to which such tendering Unitholder is entitled is referred to
herein as an "In Kind Distribution." An In Kind Distribution will be
made by the Trustee through the distribution of each of the Securities
in book-entry form to the account of the Unitholder's bank or
broker-dealer at Depository Trust Company. If funds in the Capital
Account are insufficient to cover the required cash distribution to
the tendering Unitholder, the Trustee may sell Securities according to
the criteria discussed herein.
Notwithstanding the preceding paragraph, if a Unitholder electing an
In Kind Distribution is an Affiliated Redeeming Unitholder, as such
term is defined below, such In Kind Distribution shall be permitted
subject to the following conditions:
(a) The In Kind Distribution shall be consistent with the Trust's
redemption policies and undertakings, as set forth in the Trust's
Prospectus;
(b) Neither the Affiliated Redeeming Unitholder, nor any other party
with the ability and the pecuniary incentive to influence the In Kind
Distribution, may select, or influence the selection of, the
distributed Securities;
(c) Upon an In Kind Distribution by the Affiliated Redeeming
Unitholder, the Trustee shall distribute to the Affiliated Redeeming
Unitholder its proportionate share of every Security in the Trust's
portfolio, provided that if the Trustee is not an affiliated person
(as the term "affiliated person" is defined in the Investment Company
Act of 1940, as amended) of the Affiliated Redeeming Unitholder, the
Trustee may exclude Discretionary Assets (as defined below) from the
In Kind Distribution to the extent that the Trustee cannot practicably
distribute such Discretionary Assets without undue burden or adverse
impact to the Trust or its Unitholders. If the Trustee determines that
it is impracticable to distribute the Discretionary Assets in kind,
the Trustee shall sell or liquidate the Discretionary Assets to raise
funds to satisfy the redemption, provided that if the Trustee cannot
sell or liquidate the Discretionary Assets, the Trustee may sell or
liquidate other Securities;
(d) The In Kind Distribution may not favor the Affiliated Redeeming
Unitholder to the detriment of any other Unitholder;
(e) The Trustee shall monitor each In Kind Distribution on a quarterly
basis for compliance with all provisions of this Section 6.02; and
(f) The Trustee shall maintain and preserve for a period of not less
than six years from the end of the fiscal year in which the In Kind
Distribution occurs, the first two years in an easily accessible
place, records for each In Kind Distribution setting forth the
identity of the Affiliated Redeeming Unitholder, a description of the
composition of the Trust's portfolio (including each asset's value)
immediately prior to the In Kind Distribution, a description of each
Security distributed in-kind, the terms of the In Kind Distribution,
the information or materials upon which the asset valuations were
made, and a description of the composition of the Trust's portfolio
(including each asset's value) one month after the In Kind
Distribution.
The term "Affiliated Redeeming Unitholder" shall mean an affiliated
person or a promoter of or a principal underwriter for the Trust, or
an affiliated person of such a person, promoter or principal
underwriter. The terms "affiliated person," "promoter" and "principal
underwriter" as used in the preceding sentence shall have the meanings
assigned to each such term in the Investment Company Act of 1940, as
amended.
The term "Discretionary Assets" shall mean (i) securities that, if
distributed, would be required to be registered under the Securities
Act of 1933, as amended; (ii) securities issued by entities in
countries that (A) restrict or prohibit the holding of securities by
non-nationals other than through qualified investment vehicles, or (B)
permit transfers of ownership of securities to be effected only by
transactions conducted on a local stock exchange; and (iii) any assets
that, although they may be liquid and marketable, must be traded
through the marketplace or with the counterparty to the transaction in
order to effect a change in beneficial ownership.
Notwithstanding anything to the contrary in the Standard Terms and
Conditions of Trust, if a Trust has not elected to be treated as a
"regulated investment company" as defined in the United States
Internal Revenue Code of 1986, as amended, no Unitholder may elect to
have Units redeemed through an In Kind Distribution within thirty (30)
days of any Trust termination."
20. 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."
21. 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.
22. Section 9.01 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety by 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 (whether evidenced by Certificates or held in uncertificated
form) 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 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."
23. Section 9.02 of the Standard Terms and Conditions of Trust shall be
replaced in its entirety with the following:
"Section 9.02. Termination. This Indenture and each Trust created
hereby shall terminate upon the maturity, redemption, sale or other
disposition as the case may be of the last Security held in such Trust
hereunder unless sooner terminated as hereinbefore specified, and may
be terminated at any time by the written consent of Unitholders
representing at least 66 2/3% of the Units of the Trust then
outstanding; provided that in no event shall any Trust continue beyond
the Mandatory Termination Date. Upon the date of termination the
registration books of the Trustee shall be closed.
In the event of a termination, the Trustee shall proceed to liquidate
the Securities then held and make the payments and distributions
provided for hereinafter in this Section 9.02 based on such
Unitholder's pro rata interest in the balance of the Capital and
Income Accounts after the deductions herein provided. Written notice
shall be given by the Trustee in connection with any termination to
each Unitholder at his address appearing on the registration books of
the Trustee and in connection with a Mandatory Termination Date such
notice shall be given no later than 45 days before the Mandatory
Termination Date. Included with such notice shall be a form to enable
Unitholders owning that number of Units referred to in the Prospectus
to request an In Kind Distribution (as described in Section 6.02)
during the period ending 31 days prior to date of the related Trust's
termination. No Unitholder shall be permitted to have Units redeemed
through an In Kind Distribution within 30 days of any Trust
termination.
The Trustee will liquidate the Securities then held, if any, in such
daily amounts as the Depositor shall direct. The Depositor shall
direct the liquidation of the Securities in such manner as to
effectuate orderly sales and a minimal market impact. In the event the
Depositor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole
discretion, shall determine. The Trustee shall not be liable for or
responsible in any way for depreciation or loss incurred by reason of
any sale or sales made in accordance with the Depositor's direction
or, in the absence of such direction, in the exercise of the
discretion granted by this Section 9.02. The Trustee shall deduct from
the proceeds of these sales and pay any tax or governmental charges
and any brokerage commissions in connection with such sales. Amounts
received by the Trustee representing the proceeds from the sales of
Securities shall be credited to the related Capital Account.
Not later than the fifth Business Day following receipt of all
proceeds of sale of the Securities, the Trustee shall:
(a) deduct from the Income Account of such Trust or, to the extent
that funds are not available in such Account of such Trust, from the
Capital Account of such Trust, and pay to itself individually an
amount equal to the sum of (i) its accrued compensation for its
ordinary recurring services, (ii) any compensation due it for its
extraordinary services in connection with such Trust, and (iii) any
costs, expenses or indemnities in connection with such Trust as
provided herein;
(b) deduct from the Income Account of such Trust or, to the extent
that funds are not available in such Account, from the Capital Account
of such Trust, and pay accrued and unpaid fees of the Depositor, the
Supervisor and counsel in connection with such Trust, if any;
(c) deduct from the Income Account of such Trust or the Capital
Account of such Trust any amounts which may be required to be
deposited in the Reserve Account and any other amounts which may be
required to meet expenses incurred under this Indenture in connection
with such Trust;
(d) make final distributions from such Trust, against surrender for
cancellation of all of each Unitholder's Certificate or Certificates,
if issued, as follows:
(i) to each Unitholder, such Unitholder's pro rata share of the
cash balances of the Income and Capital Accounts; and
(ii) on the conditions set forth in Section 3.04 hereof, to each
Unitholder such Unitholder's pro rata share of the balance of the
Reserve Account; and
(e) within 60 days after the distribution to each Unitholder as
provided for in (d), furnish to each such Unitholder a final
distribution statement, setting forth the data and information in
substantially the form and manner provided for in Section 3.06 hereof.
The Trustee shall be under no liability with respect to moneys held by
it in the Income, Reserve and Capital Accounts of a Trust upon
termination except to hold the same in trust within the meaning of the
Investment Company Act of 1940, without interest until disposed of in
accordance with the terms of this Indenture."
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. XXXXXXX
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Executive Director
XXX XXXXXX ASSET MANAGEMENT
By /s/ XXXX X. XXXXXXX
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Executive Director
THE BANK OF NEW YORK MELLON
By /s/ XXXXXXX XXXXXX
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Assistant Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX UNIT TRUSTS, SERIES 796
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus.]
