EXHIBIT 1.1
XXX XXXXXX FOCUS PORTFOLIOS
SERIES 224
TRUST AGREEMENT
Dated: December 12, 2000
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Xxx Xxxxxx Investment
Advisory Corp., as Evaluator, Xxxxxx X. Xxxxx & Co., L.P., as Supervisory
Servicer, and The Bank of New York, as Trustee, sets forth certain provisions in
full and incorporates other provisions by reference to the document entitled
"Xxx Xxxxxx American Capital Equity Opportunity Trust, Series 87 and Subsequent
Series, Standard Terms and Conditions of Trust, Effective January 27, 1998"
(herein called 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, Evaluator, Supervisory Servicer and Trustee 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 defined in Section 1.01(24), 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 is an amount the numerator of which is
one and the denominator of which is the amount set forth under
"Summary of Essential Financial Information - Initial Number of
Units" in the Prospectus. Such fractional undivided interest may
be (a) increased by the number of any additional Units issued
pursuant to Section 2.03, (b) increased or decreased in
connection with an adjustment to the number of Units pursuant to
Section 2.03, or (c) decreased by the number of Units redeemed
pursuant to Section 5.02.
3. The terms "Capital Account Record Date" and "Income Account
Record Date" shall mean the "Record Dates" set forth under
"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
under "Summary of Essential Financial Information" in the
Prospectus.
5. The term "Mandatory Termination Date" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial
Information" in the Prospectus.
6. Section 1.01 (1), (3) and (4) shall be replaced in their entirety
by the following:
(1) "Depositor" shall mean Xxx Xxxxxx Funds Inc. and its
successors in interest, or any successor depositor appointed
as hereinafter provided.
(3) "Evaluator" shall mean American Portfolio Evaluation
Services (a division of a Xxx Xxxxxx Investment Advisory
Corp.) and its successors in interest, or any successor
evaluator appointed as hereinafter provided.
(4) The term "Supervisory Servicer" shall mean Xxxxxx X. Xxxxx &
Co., L.P. and its successors in interest, or any successor
portfolio supervisor as hereinafter provided.
7. Notwithstanding anything to the contrary in the Standard Terms
and Conditions of Trust and subject to the requirements set forth
in this paragraph, unless the Prospectus otherwise requires, the
Sponsor may, on any Business Day (the "Trade Date"), subscribe
for additional Units as follows:
(a) Prior to the Evaluation Time on such Business Day, the
Sponsor shall provide notice (the "Subscription Notice") to
the Trustee, by telephone or by written communication, of
the Sponsor's intention to subscribe for additional Units.
The Subscription Notice shall identify the additional
Securities to be acquired (unless such additional Securities
are a precise replication of the then existing portfolio)
and shall either (i) specify the quantity of additional
Securities to be deposited by the Sponsor on the settlement
date for such subscription or (ii) instruct the Trustee to
purchase additional Securities with an aggregate value as
specified in the Subscription Notice.
(b) Promptly following the Evaluation Time on such Business Day,
the Sponsor shall verify with the Trustee the number of
additional Units to be created.
(c) Not later than the time on the settlement date for such
subscription when the Trustee is to deliver or assign the
additional Units created hereby, the Sponsor shall deposit
with the Trustee (i) any additional Securities specified in
the Subscription Notice (or contracts to purchase such
additional Securities together with cash or a letter of
credit in the amount necessary to settle such contracts) or
(ii) cash or a letter of credit in an amount equal to the
aggregate value of the additional Securities specified in
the Subscription Notice, and adding and subtracting the
amounts specified in the first and second sentences of
Section 5.01, computed as of the Evaluation Time on the
Business Day preceding the Trade Date divided by the number
of Units outstanding as of the Evaluation Time on the
Business Day preceding the Trade Date, times the number of
additional Units to be created.
(d) On the settlement date for such subscription, the Trustee
shall, in exchange for the Securities and cash or letter of
credit described above, deliver to, or assign in the name of
or on the order of, the Sponsor the number of Units verified
by the Sponsor with the Trustee.
8. Section 6.01(e) is hereby replaced with the following:
(e) (1) Subject to the provisions of subparagraph (2) of this
paragraph, the Trustee may employ agents, sub-custodians,
attorneys, accountants and auditors and shall not be
answerable for the default or misconduct of any such agents,
sub-custodians, attorneys, accountants or auditors if such
agents, sub-custodians, attorneys, accountants or auditors
shall have been selected with reasonable care. The Trustee
shall be fully protected in respect of any action under this
Indenture taken or suffered in good faith by the Trustee in
accordance with the opinion of counsel, which may be counsel
to the Depositor acceptable to the Trustee, provided,
however that this disclaimer of liability shall not excuse
the Trustee from the responsibilities specified in
subparagraph (2) below. The fees and expenses charged by
such agents, sub-custodians, attorneys, accountants or
auditors shall constitute an expense of the Trust
reimbursable from the Income and Capital Accounts of the
affected Trust as set forth in section 6.04 hereof.
(2) The Trustee may place and maintain in the care of an
Eligible Foreign Custodian (which is employed by the Trustee
as a sub-custodian as contemplated by subparagraph (1) of
this paragraph (e) and which may be an affiliate or
subsidiary of the Trustee or any other entity in which the
Trustee may have an ownership interest) any investments
(including foreign currencies) for which the primary market
is outside the United States, and such cash and cash
equivalents in amounts reasonably necessary to effect the
Trust's transactions in such investments, provided that:
(a) The Trustee shall perform all duties assigned to the
Foreign Custody Manager by Rule 17f-5 under the
Investment Company Act of 1940 (17 CFR ss. 270.17f-5)
("Rule 17f-5"), as now in effect or as such rule may be
amended in the future. The Trustee shall not delegate
such duties.
(b) The Trustee shall exercise reasonable care, prudence
and diligence such as a person having responsibility
for the safekeeping of Trust assets would exercise, and
shall be liable to the Trust for any loss occurring as
a result of its failure to do so.
(c) The Trustee shall indemnify the Trust and hold the
Trust harmless from and against any risk of loss of
Trust assets held in accordance with the foreign
custody contract.
(d) The Trustee shall maintain and keep current written
records regarding the basis for the choice or continued
use of a particular Eligible Foreign Custodian pursuant
to this subparagraph for a period of not less than six
years from the end of the fiscal year in which the
Trust was terminated, the first two years in an easily
accessible place. Such records shall be available for
inspection by Unitholders and the Securities and
Exchange Commission at the Trustee's offices at all
reasonable times during its usual business hours.
(3) "Eligible Foreign Custodian" shall have the meaning assigned
to it in Rule 17f-5.
(4) "Foreign Custody Manager" shall have the meaning assigned to
it in Rule 17f-5.
9. Section 3.07(a) of the Standard Terms and Conditions of Trust is
hereby amended by adding the following Section 3.07(a)(x)
immediately after Section 3.07(a)(ix):
"(x) that there has been a public tender offer made for a
Security or a merger or acquisition is announced affecting a
Security, and that in the opinion of the Supervisory
Servicer the sale or tender of the Security is in the best
interest of the Unitholders."
10. Sections 4.01(b) and (c) of the Standard Terms and Conditions of
Trust are hereby replaced in their entirety by the following:
(b) During the initial offering period 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 Evaluator
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
Equity Securities. If the Securities are not listed 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 Evaluator deems
appropriate: (i) in the case of Equity Securities, on the
basis of the current asked price on the over-the-counter
market (unless the Evaluator deems such price inappropriate
as a basis for evaluation), (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 or the Equity Securities, on the basis of
offering or asked price for comparable securities, (iv) by
determining the valuation of the Zero Coupon Obligations or
the Equity Securities on the offering or asked 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 Evaluator deems such prices
inappropriate as a basis for valuation). The Evaluator 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 immediately prior
to the Evaluation time. For each Evaluation, the Evaluator
shall also confirm and furnish to the Trustee and the
Depositor, on the basis of the information furnished to the
Evaluator by the Trustee as to the value of all Trust assets
other than Securities, the calculation of the Trust
Evaluation to be computed pursuant to Section 5.01.
(c) For purposes of the Trust Evaluations required by Section
5.01 in determining Redemption Value and Unit Value,
Evaluation of the Securities shall be made in the manner
described in Section 4.01(b), on the basis of current bid
prices for the Zero Coupon Obligations, the bid side value
of the relevant currency exchange rate expressed in U.S.
dollars and, except in those cases in which the Equity
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 the Equity Securities. In
addition, the Evaluator (i) shall not make the addition
specified in the fourth sentence of Section 4.01(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.
IN WITNESS WHEREOF, the undersigned have caused this Trust Agreement to
be executed and their corporate seals to be hereto affixed and attested; all as
of the day, month and year first above written.
Xxx Xxxxxx Funds Inc.
By Xxxxx X. Xxxxx
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Vice President
American Portfolio Evaluation Services,
a division of Xxx Xxxxxx Investment Advisory Corp.
By Xxxxx Xxxxx
-----------------------------------
Vice President
Xxxxxx X. Xxxxx & Company
By Xxxxxxx X. XxXxx
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Principal
The Bank of New York
By Xxxxxxx Xxxxx
----------------------------------
Vice President
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 224
(Note: Incorporated herein and made a part hereof is each "Portfolio"
as set forth in the Prospectus.)
