FT DEFINED PORTFOLIOS LLC
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement (the "Agreement")
made this 15th day of December, 2000, by and between FT Defined Portfolios LLC,
a Delaware limited liability company (the "Company"), on behalf of each series
(each a "fund" and collectively, the "funds") of the Company, and First Trust
Advisors L.P. (the "Adviser"), an Illinois limited partnership.
WHEREAS, the Company and the Adviser wish to enter into this Agreement
setting forth the terms and conditions under which the Adviser will perform
certain investment advisory and management services for the funds listed in
Schedule A attached hereto, and be compensated for such services by the funds.
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the Company and the Adviser hereby agree as follows:
SECTION 1. INVESTMENT ADVISORY SERVICES.
Section 1.1. During the Term (as such term is defined in Section 5
hereof) of this Agreement, the Adviser shall serve as the investment adviser
(within the meaning of the Investment Advisers Act of 1940, as amended) of the
funds. In such capacity, the Adviser shall render the following services and
perform the following functions for and on behalf of the funds:
(a) Furnish continuous advice and recommendations to
the funds with respect to the acquisition, holding or disposition of
any or all of the securities or other assets which the funds may own or
contemplate acquiring from time to time;
(b) Cause its officers to attend meetings and furnish
oral or written reports, as the Company reasonably may request, in
order to keep the Trustees and appropriate officers of the Company
fully informed regarding the investment portfolios of the funds, the
investment recommendations of the Adviser, and the considerations which
form the basis for such recommendations; and
(c) Supervise the management of the fund's investments,
including the purchase, sale, retention or lending of securities and
other investments in accordance with the fund's investment objectives,
policies and restrictions.
Section 1.2. The services of the Adviser to the funds are not
exclusive, and nothing contained herein shall be deemed or construed to
prohibit, limit, or otherwise restrict the Adviser from rendering investment or
other advisory services to any third person, whether similar to those to be
provided to the funds hereunder or otherwise.
SECTION 2. COMPENSATION OF ADVISER.
Section 2.1. For its services hereunder, each fund shall pay the
Adviser an annual fee (the "Fee") as set forth in Schedule B. The Fee will be
computed daily and payable monthly in arrears based on average daily net assets.
Section 2.2. Notwithstanding the provisions of Section 2.1 hereof,
the amount of the Fee to be paid with respect to the first and last months of
this Agreement shall be pro rated based on the number of calendar days in such
quarter.
Section 2.3. The Adviser may voluntarily waive Fees or reimburse
expenses at any time. Any amounts waived or reimbursed by the Adviser are
subject to reimbursement by the fund within the following three years, to the
extent such reimbursement by the fund would not cause the fund to exceed any
current expense limitation.
SECTION 3. EXPENSES PAID BY THE ADVISER.
Section 3.1. Subject to the provisions of Section 3.2 hereof,
the Adviser shall pay the following expenses relating to the management and
operation of the funds:
(a) All reasonable fees, charges, costs and expenses
and all reasonable compensation of all officers and Trustees of the
funds relating to the performance of their duties to the funds;
provided, however, that the Adviser shall not pay any such amounts to
any Outside Trustees (for purposes of this Agreement, an "Outside
Trustee" is any Trustee of the Company who is not an "Interested
Person," within the meaning of Section 2(a)(19) of the Investment
Company Act of 1940, as amended (the "1940 Act")); and provided,
further, that in the event that any person serving as an officer of the
Company has both executive duties attendant to such office and
administrative duties to the Company apart from such office, the
Adviser shall not pay any amounts relating to the performance of such
duties;
(b) All costs of office equipment and personnel
necessary for and allocable to the performance of the obligations
of the Adviser hereunder.
Section 3.2. Except as provided in this Section, nothing contained
in this Agreement shall be deemed or construed to impose upon the Adviser any
obligation to incur, pay, or reimburse the funds for any other costs of or
relating to the funds.
SECTION 4. EXPENSES PAID BY THE FUNDS.
Section 4.1. Except as provided in Section 3 hereof, the funds
hereby assume and shall pay all fees, costs and expenses incurred by, or on
behalf, or for the benefit of the funds, including without limitation:
(a) All costs of any custodian or depository;
(b) All costs for bookkeeping, accounting, pricing and
auditors' services;
(c) All costs of leased office space of or allocable to
the funds within the offices of the Adviser or in such other place as
may be mutually agreed upon between the parties from time to time;
(d) All costs of any transfer agent and registrar of
interests of the funds ("Interests");
(e) All costs incurred by any Outside Trustee of the
Company in connection with the performance of his duties relating to
the affairs of the Company in such capacity as an Outside Trustee of
the Company, and costs relating to the performance by any officer of
the Company, performing duties on behalf of the funds apart from such
office, all in accordance with Section 3.1 (a) hereof;
(f) All brokers' commissions and other costs in-
curred in connection with the execution of the funds' portfolio
transactions;
(g) All taxes and other costs payable by or on
behalf of the funds to federal, state or other governmental agencies;
(h) All costs of printing, recording and transferring
certificates representing Interests;
(i) All costs in connection with the registration of
the funds and the Interests with the Securities and Exchange Commission
("SEC"), and the continuous maintenance of the effectiveness of such
registrations, and the registration and qualification of Interests of
the funds under state or other securities laws, including, without
limitation, the preparation and printing of registration statements,
prospectuses and statements of additional information for filing with
the SEC and other authorities;
(j) All costs of preparing, printing and mailing
prospectuses, statements of additional information and reports to
holders of Interests;
(k) All costs of Interest holders' and Trustees'
meetings and of preparing, printing and mailing all information and
documents, including without limitation all notices, financial reports
and proxy materials, to holders of Interests;
(l) All costs of legal counsel for the Company and for
Trustees of the Company in connection with the rendering of legal
advice to or on behalf of the funds, including, without limitation,
legal services rendered in connection with the funds' existence,
corporate and financial structure and relations with its Interest
holders, registrations and qualifications of securities under federal,
state and other laws, issues of securities, expenses which the funds
have herein assumed whether customary or not, and extraordinary
matters, including, without limitation, any litigation involving the
Company, Trustees, or officers of the Company relating to the affairs
of the funds, employees or agents of the funds;
(m) All costs of licenses to utilize trademarks,
trade names, service marks or other proprietary interests;
(n) All costs associated with membership in trade
associations; and
(o) All costs of filing annual and other
reports with the SEC and other regulatory authorities.
In the event that the Adviser provides any of the foregoing services
or pays any of these expenses, the funds promptly shall reimburse the Adviser
therefor.
SECTION 5. TERM; TERMINATION.
Section 5.1. This Agreement shall continue in effect, unless
sooner terminated in accordance with the provisions of Section 5.2, for a
period of two years beginning the date hereof, and shall continue in effect
from year to year thereafter (collectively, the "Term"); provided, however,
that any such continuation shall be expressly approved at least annually
either by the Trustees, including a majority of the Trustees who are not
parties hereto or Interested Persons of any such party, cast at a meeting
called for the purpose of voting on such renewal, or the affirmative vote of
a majority of the Outstanding Voting Securities (as such term is defined in
Section 2(a)(42) of the 0000 Xxx) of the funds.
(a) Any continuation of this Agreement pursuant to
Section 5.1 hereof shall be deemed to be specifically approved if
such approval occurs:
(i) with respect to the first continuation
hereof, during the 60 days prior to and including the earlier
of (A) the date specified herein for the termination of this
Agreement in the absence of such approval, or (B) the second
anniversary of the execution of this Agreement; and
(ii) with respect to any subsequent
continuation hereof, during the 60 days prior to and including
the first anniversary of the date upon which the most recent
previous annual continuance of this Agreement became
effective; or
(iii) at such other date or time provided in or
permitted by Rule 15a-2 under the 1940 Act.
Section 5.2. This Agreement may be terminated at any time,
without penalty, as follows:
(a) By a majority of the Trustees of the Company who
are not parties hereto or Interested Persons of any such party, or by
the affirmative vote of a majority of the Outstanding Voting Securities
of the Company, upon at least 60 days' prior written notice to the
Adviser at its principal place of business; and
(b) By the Adviser, upon at least 60 days' prior
written notice to the Company at its principal place of business.
SECTION 6. BROKERS AND BROKERAGE COMMISSIONS.
Section 6.1. For purposes of this Agreement, brokerage commissions
paid by the funds upon the purchase or sale of the funds' portfolio securities
shall be considered a cost of securities of the funds and shall be paid by the
funds in accordance with Section 4.1(e) hereof.
Section 6.2. The Adviser shall place funds portfolio transactions
with brokers and dealers who render satisfactory service in the execution of
orders at the most favorable prices and at reasonable commission rates;
provided, however, that the Adviser may pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker or dealer would have charged for effecting such
transaction, if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, in terms of either that particular
transaction or the overall responsibilities of the Adviser.
Section 6.3. In placing portfolio business with broker-dealers for
or on behalf of the funds, the Adviser shall seek the best execution of each
such transaction, and all such brokerage placements shall be consistent with the
Rules of Conduct of NASD Regulation, Inc. Notwithstanding the foregoing, the
funds shall retain the right to direct the placement of all portfolio
transactions for or on behalf of the funds, and, in furtherance thereof, the
funds may establish policies or guidelines to be followed by the Adviser in its
placement of the funds' portfolio transactions pursuant to the foregoing
provisions. The Adviser shall report to the Trustees of the Company at least on
a quarterly basis regarding the placement of the funds' portfolio transactions.
Section 6.4. The Adviser shall not deal with any affiliate in any
transaction hereunder in which such affiliate acts as a principal, nor shall the
Adviser, in rendering services to the funds hereunder, execute any negotiated
trade with any affiliate if execution thereof involves such affiliate's acting
as a principal with respect to any part of an order for or on behalf of the
funds.
SECTION 7. ASSIGNMENT.
This Agreement may not be assigned by either party hereto. This
Agreement shall terminate automatically in the event of any assignment (as such
term is defined in Section 2(a)(4) of the 1940 Act). Any attempted assignment of
this Agreement shall be of no force and effect.
SECTION 8. AMENDMENTS.
This Agreement may be amended in writing signed by both parties hereto;
provided, however, that no such amendment shall be effective unless approved by
a majority of the Trustees of the Company who are not parties hereto or
Interested Persons of any such party cast at a meeting called for the purpose of
voting on such amendment and by the affirmative vote of a majority of the
Outstanding Voting Securities of the funds.
SECTION 9. LIABILITY.
The Adviser, its partners, directors, officers, employees, and certain
other persons performing specific functions for a fund will only be liable to
the fund for losses resulting from willful misfeasance, bad faith, gross
negligence, or reckless disregard of their obligations and duties under the
Agreement.
SECTION 10. SECTION 817(h) DIVERSIFICATION.
The Adviser is responsible for compliance with the provisions of
Section 817(h) of the Internal Revenue Code of 1986, as amended ("Code"),
applicable to each fund (relating to the diversification requirements applicable
to investments in underlying variable annuity contracts).
SECTION 11. GOVERNING LAW.
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois, without reference to the
conflict of laws provisions thereof. In the event of any inconsistency between
this Agreement and the 1940 Act, the 1940 Act shall govern, and the inconsistent
provisions of this Agreement shall be construed so as to eliminate such
inconsistency.
SECTION 12. NON-LIABILITY OF CERTAIN PERSONS.
Any obligation of the Company hereunder shall be binding only upon the
assets of the Company (or the applicable fund thereof) and shall not be binding
upon any Trustee, officer, employee, agent, member or interest holder of the
Company. Neither the authorization of any action by any Trustee, officer,
employee, agent, member or interest holder of the Company nor the execution of
this agreement on behalf of the Fund shall impose any liability upon any
Trustee, officer, employee, agent, member or interest holder of the Company.
SECTION 13. USE OF ADVISER'S NAME.
The Company may use the name "FT Defined Portfolios LLC" and the
Portfolio names listed in Schedule A or any other name derived from the name
"First Trust" or "Nike Securities" only for so long as this Agreement or any
extension, renewal or amendment hereof remains in effect, including any similar
agreement with any organization which shall have succeeded to the business of
Adviser as investment adviser. At such time as this Agreement or any extension,
renewal or amendment hereof, or such other similar agreement shall no longer be
in effect, the Company will cease to use any name derived from the name "First
Trust" or "Nike Securities" or otherwise connected with Adviser, or with any
organization which shall have succeeded to Adviser's business as investment
adviser.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
FT DEFINED PORTFOLIOS LLC
By /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
FIRST TRUST ADVISORS L.P.
By /s/ Xxxxxx XxXxxxxxx
Name: Xxxxxx XxXxxxxxx
Title: President
SCHEDULE A
1. Nasdaq Target 15 Portfolio
2. First Trust 10 Uncommon Values Portfolio
SCHEDULE B
FEE RATE (based
on average daily
net assets)
1. Nasdaq Target 15 Portfolio 0.60%
2. First Trust 10 Uncommon Values Portfolio 0.60%
