EXHIBIT 1.1
XXX XXXXXX UNIT TRUSTS,
TAXABLE INCOME SERIES 164
TRUST AGREEMENT
Dated: March 24, 2009
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor, The Bank of
New York Mellon, as Trustee, Standard & Poor's Securities Evaluations, Inc., as
Evaluator, 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 Insured Income Trust, Effective for Unit Investment Trusts
Established On and After May 24, 2001 (Including Xxx Xxxxxx Focus Portfolios
Insured Income Trust, Series 80 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 Bonds listed in the Schedule hereto have been deposited in trust under
this Trust Agreement.
2. The fractional undivided interest in and ownership of each 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 "Summary of
Essential Financial Information-General Information-Number of Units" in the
Prospectus Part I for each Trust.
3. The aggregate number of Units described in Section 2.03(a) for each Trust
is that number of Units set forth under "Summary of Essential Financial
Information--General Information--Number Of Units" in the Prospectus Part I for
each Trust.
4. The term "First Settlement Date" shall mean the date set forth in footnote
3 under "Summary of Essential Financial Information" in the Prospectus Part I
for each Trust.
5. The term "Monthly Distribution Date" shall mean the "Distribution Dates"
set forth under "Summary of Essential Financial Information--Estimated
Distributions--Monthly Distributions" in the Prospectus Part I for each Trust.
6. The term "Monthly Record Date" shall mean the "Record Dates" set forth
under "Summary of Essential Financial Information--Estimated
Distributions--Monthly Distributions" in the Prospectus Part I for each Trust.
7. The term "Semi-Annual Distribution Date" shall mean the "Distribution
Dates" set forth under "Summary of Essential Financial Information--Estimated
Distributions--Semi-Annual Distributions" in the Prospectus Part I for each
Trust.
8. The term "Semi-Annual Record Date" shall mean the "Record Dates" set forth
under "Summary of Essential Financial Information--Estimated
Distributions--Semi-Annual Distributions" in the Prospectus Part I for each
Trust.
9. The term "Evaluator" shall mean Standard & Poor's Securities Evaluations,
Inc. and its successors in interest, or any successor evaluator appointed as
provided in the Standard Terms and Conditions of the Trust.
10. The term "Insured Trust" shall mean a Trust which is comprised entirely
of Pre-Insured Bonds and/or Bonds as to which such Trust has obtained Portfolio
Insurance.
11. The term "Supervisor" shall mean Xxx Xxxxxx Asset Management and its
successors in interest or any successor supervisor appointed as provided in the
Standard Terms and Conditions of Trust.
12. 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.
13. The term "Uninsured Trust" shall mean any Trust other than an Insured
Trust.
14. Section 2.06 shall not apply to any Uninsured Trust.
15. Section 3.05 is amended by adding the following subsection immediately
after Section 3.05(f):
"(g) 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."
16. The following shall be added to Section 3.07 of the Standard Terms and
Conditions of Trust immediately following Section 3.07(h):
"(i) 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 (a) to maintain the qualification of the
Trust as a regulated investment company or (b) 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.
In the event a Security is sold pursuant to any provisions of this Section
3.07 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."
17. The words "long-term" in Section 3.14(a)(i) shall be deleted.
18. Neither Section 3.14(a)(iv) nor Section 3.14(c) shall apply to any
Uninsured Trust.
19. The paragraph immediately following Section 3.14(e) of the Standard Terms
and Conditions of Trust shall be replaced in its entirety with the following:
"Notwithstanding anything to the contrary in this Section 3.14, no
substitution of Replacement Bonds will be made if such substitution will
adversely affect the federal income tax status of the related Trust."
20. The Standard Terms and Conditions of Trust shall be amended to include
the following section:
"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 a 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."
21. For purposes of Section 5.01(a), "Business Day" shall mean any day the
New York Stock Exchange is open for business.
22. Section 6.02 is amended by adding the following to the end of the
section:
"Notwithstanding anything to the foregoing, in connection with any redemption
by a Unitholder of 1,000 or more Units or Units having an aggregate Redemption
Price of $1,000,000 or more, the Trustee may in its discretion, and shall when
so instructed by the Depositor, satisfy such redemption through a distribution
of such Unitholder's pro rata portion of each Bond then held by the Trust. Such
tendering Unitholder will receive his pro rata number of Bonds comprising the
portfolio of such Trust, cash from the Interest Account representing interest
and cash from the Principal Account equal to any balance to be paid on such
redemption, including accrued interest. Such pro rata share of each Bond 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 Bonds in book-entry form to the
account of the Unitholder's bank or broker-dealer at Depository Trust Company.
If funds in the Interest or Principal Account are insufficient to cover the
required cash distribution to the tendering Unitholder, the Trustee may sell
Bonds according to the criteria discussed herein."
23. The Trustee's annual compensation as set forth under Section 7.04, for
each distribution plan shall be that amount set forth under the section entitled
"Summary of Essential Financial Information--Expenses--Trustee's Fee" in the
Prospectus Part I for each Trust. In addition, the last sentence of the first
paragraph of Section 7.04 is hereby deleted.
24. 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 Bonds 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 75% 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."
25. The first sentence of 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 any Trust created hereby shall
terminate upon the maturity, redemption, sale or other disposition as the case
may be of the last Bond held in such Trust unless sooner terminated as
hereinbefore specified and may be terminated at any time by the written consent
of Unitholders representing 75% of the then outstanding Units of such Trust;
provided, that in no event shall a Trust continue beyond the end of the calendar
year preceding the fiftieth anniversary of the execution of the related Trust
Agreement except for an Intermediate Corporate Investment Grade Trust, Insured
Laddered Trust or Insured Income Trust (Intermediate) which in no event shall
continue beyond the end of the calendar year preceding the twentieth anniversary
of the execution of the related Trust Agreement (the respective "Mandatory
Termination Date"); and provided further that in connection with any such
liquidation it shall not be necessary for the Trustee to dispose of any Bond of
such Trusts if retention of such Bond, until due, shall be deemed to be in the
best interests of Unitholders, including, but not limited to, situations in
which a Bond insured by the Portfolio Insurance, if any, are in default,
situations in which a Bond insured by Portfolio Insurance reflects a
deteriorated market price resulting from a fear of default and situations in
which a Bond mature after the Mandatory Termination Date."
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
STANDARD & POOR'S SECURITIES EVALUATIONS, INC.
By /s/ XXXXX X. XXXXXXXX
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Senior Vice President
THE BANK OF NEW YORK MELLON
By /s/ Xxxxx Xxxxxx
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Assistant Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX UNIT TRUSTS, TAXABLE INCOME SERIES 164
[Incorporated herein by this reference and made a part hereof is the
"Portfolio" schedule as set forth in the Prospectus Part I for each Trust.]
