EXHIBIT 1.1
XXX XXXXXX FOCUS PORTFOLIOS
SERIES 156
TRUST AGREEMENT
Dated: May 25, 1999
This Trust Agreement among Xxx Xxxxxx Funds Inc., as Depositor,
American Portfolio Evaluation Services, a division of Xxx Xxxxxx Investment
Advisory Corp., as Evaluator, Josephthal & Co., Inc., 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. Sections 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) "Supervisory Servicer" shall mean Josephthal & Co., Inc. and
its successors in interest, or any successor portfolio supervisor appointed as
hereinafter provided.
7. Section 1.01(25) shall be replaced in its entirety by the
following:
(25) "Special Redemption Period" shall mean the "Mandatory
Termination Date" set forth under "Summary of Essential Financial
Information" in the Prospectus.
8. The term "Rollover Notification Date" shall mean a date
approximately thirty days prior to the "Mandatory Termination Date" set forth
under "Summary of Essential Financial Information" in the Prospectus.
9. The first three paragraphs of Section 5.05 shall be replaced in
their entirety by the following:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Trusts (the "New
Series"), the Trustee shall, thirty days prior to the first day of the
Special Redemption Period, include a form of election (which may be
included in the notice sent to Unitholders specified in Section 8.02)
whereby Unitholders, whose redemption distribution would be in an
amount sufficient to purchase at least one Unit of the New Series, may
elect to have their Units redeemed in kind in the manner provided in
Section 5.02, the Securities included in the redemption distribution
sold, and the cash proceeds 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 on the Rollover
Notification Date.
All Units so tendered by a Unitholder (a "Rollover
Unitholder") shall be redeemed and canceled on the date during the
Special Redemption Period instructed by such Rollover Unitholder
provided that such Rollover Unitholder has properly tendered such Units
for redemption pursuant to Section 5.02. 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 in kind pursuant to
Section 5.02 by distribution of cash and/or Securities to the
Distribution Agent on the date instructed by such Rollover Unitholder
of the net asset value (determined on the basis of the Trust Evaluation
as of such date in accordance with Section 4.01) multiplied by the
number of Units being redeemed (herein called the "Rollover
Distribution"). Any Securities that are made part of the Rollover
Distribution shall be valued for purposes of the redemption
distribution as of the date of the Rollover Distribution.
All Securities included in a Unitholder's Rollover
Distribution shall be sold by the Distribution Agent during the Special
Redemption Period specified in the Prospectus 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 Securities 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."
10. 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.
11. 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.
12. Section 3.15 of the Standard Terms and Conditions of Trust is hereby
replaced in its entirety by the following:
Section 3.15. Deferred Sales Charge. If the Prospectus related to
the Trust specifies a deferred sale charge, the Trustee shall, on each
Deferred Sales Charge Payment Date and as permitted by such Prospectus,
withdraw from the Capital Account an amount per Unit equal to the Deferred
Sales Charge Payment and credit such amount to a special non-Trust account
maintained at the Trustee out of which the deferred sales charge will be
distributed to the Depositor. If the balance in the Capital Account is
insufficient to make any such withdrawal, the Trustee shall, as directed
by the Depositor, either advance funds in an amount equal to the proposed
withdrawal and be entitled to reimbursement of such advance upon the
deposit of additional moneys in the Capital Account, sell Securities and
credit the proceeds thereof to such special Depositor's account or credit
(if permitted by law) Securities in kind to such special Depositor's
Account. If a Unitholder redeems Units prior to full payment of the
deferred sales charge, the Trustee shall, if so provided in the related
Prospectus, on the Redemption Date, withhold from the Redemption Price
payable to such Unitholder an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to such special
Depositor's Account. The Depositor may at any time instruct the Trustee in
writing to distribute to the Depositor cash or Securities previously
credited to the special Depositor's account. Amounts to be credited to the
special Depositor's account with respect to each Deferred Sales Charge
Payment are due and payable to the Depositor on the related Deferred Sales
Charge Payment Date.
The term "Deferred Sales Charge Payment Dates" shall mean September
25, 1999 and the 25th day of each month thereafter through April 25, 2000.
If any Deferred Sales Charge Payment Date is not a Business Day, that
Deferred Sales Charge Payment Date shall be deemed to be the next business
day. The term "Deferred Sales Charge Payment" shall mean a fraction of the
total maximum deferred sales charge specified in the Prospectus, the
numerator of which is one and the denominator of which is equal to the
total number of Deferred Sales Charge Payment Dates.
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
(SEAL) Vice President
Attest:
By Xxxxxxxx Xxxxxxx
Assistant Secretary
AMERICAN PORTFOLIO EVALUATION SERVICES, a division of Xxx Xxxxxx Investment
Advisory Corp.
By Xxxxx X. Xxxxx
(SEAL) Vice President
Attest
By Xxxxxxxx Xxxxxxx
Assistant Secretary
JOSEPHTHAL & CO., INC.
By Xxxx Xxxxxxxxxx
(SEAL) President
Attest
By Xxxxxx X. XxXxxxxx
Assistant Secretary
THE BANK OF NEW YORK
By Xxxxxxx Xxxxx
(Seal) Vice President
Attest
By Xxxxxx Xxxx
Assistant Treasurer
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
XXX XXXXXX FOCUS PORTFOLIOS, SERIES 156
(Note: Incorporated herein and made a part hereof is the "Portfolio" as set
forth in the Prospectus.)
