MASTER AGREEMENT AMONG UNDERWRITERS
February 19, 2009
First Trust Portfolios, L.P.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Ladies and Gentlemen:
1. General. We understand that you, First Trust Portfolios L.P. (the
"Sponsor") are entering into this Agreement in counterparts with us and other
firms who may be underwriters for issues of various series of unit investment
trusts for which you will act as Sponsor. This Agreement shall apply to any
offering on or after February 19, 2009 of units of fractional undivided
interests in such various series of unit investment trusts in which we elect to
act as an underwriter (underwriters with respect to each such trust being
hereinafter called "Underwriters") after receipt of a notice from you stating
the name and size of the trust and that our participation as an underwriter in
the proposed offering shall be subject to the provisions of this Agreement. The
issuer of the units of fractional undivided interest in a series of a unit
investment trust offered in any offering of units made pursuant to this
Agreement is hereinafter referred to as the "Fund" and the reference to "Fund"
in this Agreement applies only to such Fund, and such units of such Fund offered
are hereinafter called the "Units". The Fund is or will be registered as a "unit
investment trust" under the Investment Company Act of 1940 (the "1940 Act") by
filing a Notification of Registration on Form N-8A and N-8B-2 with the
Securities and Exchange Commission (the "Commission").
The registration statement for each Fund as finally amended and revised
at the time it becomes effective is herein referred to as the "Registration
Statement" and the related prospectus is herein referred to as the "Prospectus",
except that if the prospectus filed by the Fund pursuant to Rule 497(b) or Rule
497(d) under the Securities Act of 1933, as amended (the "1933 Act"), shall
differ from the prospectus on file at the time the Registration Statement shall
become effective, the term "Prospectus" shall refer to the prospectus filed
pursuant to Rule 497(b) or Rule 497(d) from and after the date on which it shall
have been filed. The Units to be offered in any offering will be registered
under the 1933 Act. The following provisions of this Agreement shall apply
separately to each individual offering of Units by a Fund. Capitalized words
used in this Agreement which are not separately defined herein shall have the
respective meanings given to them in the applicable Prospectus.
2. Designation and Authority of Representative. You are hereby
authorized to act as our representative (the "Representative") in connection
with each Fund for all matters to which this Agreement relates and to take the
action provided herein to be taken by you or as you may otherwise deem necessary
or advisable. We understand that we have no obligations under this Agreement
with respect to any Fund in which we choose not to participate as an
Underwriter.
You will be under no liability to us for any act or omission except for
obligations expressly assumed by you herein and no obligations on your part will
be implied or inferred herefrom. The rights and liabilities of the respective
parties hereto are several and not joint and nothing herein or hereunder will
constitute them a partnership, association or separate entity.
3. Profit or Loss in Acquisition of Bonds. It is understood that the
acquisition of bonds or other securities (the "Bonds") for deposit in the
portfolio of each Fund shall be at your cost and risk. Accordingly, if the
aggregate cost of the Bonds to a Fund on the date they are delivered to the
Trustee for deposit in the Fund, on the basis of the Trustee's determination of
offering price, shall be less than their actual aggregate acquisition cost to
the Sponsor (determined as described in the applicable Prospectus and subject to
the adjustments described therein), any such loss, without limitation or
restriction, shall be borne by you alone. On the other hand, however, if the
aggregate cost of such Bonds, as so determined, shall exceed the aggregate cost
of such Bonds to you as Sponsor, you agree to share with us on a pro rata basis,
to the extent described in the applicable Prospectus, any such excess, such
proration being based on our participation in the Fund.
We agree that you shall have no liability (as Representative or
otherwise) with respect to the issue, form, validity, legality, enforceability,
value of, or title to the Bonds, except for the exercise of due care in
determining the genuineness of such Bonds and the conformance therefor with the
descriptions and qualifications appearing in the Prospectus.
4. Purchase of Units. Promptly after making a determination to offer
Units of a Fund, you agree to notify us as to the nature of the Fund and to
inquire as to whether we desire to participate in such offering. We will advise
you promptly as to the number of Units which we will purchase or of our decision
not to participate in such offering. Such advice may be by telegraph, telegram
or other form of wire or facsimile transmission, including a wire transfer to
your account of funds for payment of Units purchased by us. You may rely on and
we hereby commit on the terms and conditions of this Agreement to purchase and
pay for the number of Units of the Fund set forth in such advice (the "Unit
Commitment"). Our Unit Commitment may be increased only by mutual agreement
between us and you at any time prior to the date as of which the Trust Agreement
for the Fund is executed and the Bonds are delivered to the Trustee for deposit
in the portfolio of the Fund (the "Initial Date of Deposit"). We agree that you
in your sole discretion reserve the right to decrease our Unit Commitment at any
time prior to the Initial Date of Deposit and if you so elect to make such a
decrease, you will notify us of such election by telephone and promptly confirm
the same by telegraph or writing. We hereby agree with you and the several other
Underwriters participating in the distribution of Units of the Fund to purchase
from you and to pay for on the First Settlement Date, as defined in the
Prospectus, the number of Units in the Fund set forth in our Unit Commitment.
The price to be paid on the First Settlement Date for each such Unit shall be
the Public Offering Price per Unit (as defined in the Prospectus) less the
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concession set forth in the Prospectus which is applicable to our Xxxx
Xxxxxxxxxx.
Xx the Initial Date of Deposit, notwithstanding that we pay for our
Units on the First Settlement Date, we will become the owner of such Units and
entitled to the benefits (except for interest accruing from the Initial Date of
Deposit) as well as the risks inherent therein.
You are authorized to retain custody of our Units until the Registration
Statement relating thereto has become effective under the 1933 Act.
You are authorized to file an amendment to said Registration Statement
describing the Bonds and furnish information based thereon or relating thereto
and any further amendments or supplements to the Registration Statement or
Prospectus which you may deem necessary or advisable. We will furnish you upon
your request such information as will be required to insure that the
Registration Statement and Prospectus are current insofar as they relate to us
and we will thereafter continue to furnish you with such information as may be
necessary to keep current and correct the information previously supplied.
We understand that the Fund will also take action with respect to the
offering and sale of Units in accordance with the Blue Sky or securities laws of
certain states in which it is proposed that the Units may be offered and sold.
5. Public Offering. You agree that you will advise us promptly,
confirming same in writing, when the Registration Statement has become
effective, and we agree that when we are advised that the Units are released for
public offering we will make a public offering thereof by means of the
Prospectus. The public offering price per Unit and the terms and conditions of
the public offering shall be as set forth in the Prospectus. You shall determine
the public offering price per Unit in the manner described in the Prospectus and
shall rely with respect to the offering price of the Bonds upon the
determination of the Evaluator named in the Prospectus. Public advertisement of
the offering may be made by you on behalf of the Underwriters on such date as
you shall determine.
6. Public Offering Price. We agree that each day while this Agreement is
in effect for the Fund and the evaluation of the Fund is made by the Evaluator
named in the Prospectus, we will contact you for such evaluation and the
resultant Public Offering Price for the purpose of the offering and sale of
Units to the public. We agree, as required by Section 22(d) of the 1940 Act, to
offer and sell our Units at the current Public Offering Price described in the
Prospectus.
7. Permitted Transactions. It is agreed that an Underwriter may make
purchases and sales from or to any other Underwriter less an agreed upon
take-down from the Public Offering Price. It is further agreed that part or all
of the Units purchased by us may be sold to dealers at the then effective Public
Offering Price, less the dealer's concession described in the Prospectus.
From time to time prior to the termination of this Agreement, at your
request, we will advise you of the number of Units which we have purchased to
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such date which remain unsold and, at your request, we agree to deliver to you
any of such unsold Units to be sold for our account to retail accounts or, less
the dealer's concession then effective, to dealers.
If prior to the termination of this Agreement with respect to each Fund
covered hereby, or such earlier date as you may determine and advise us thereof
in writing, you shall purchase or contract to purchase any of our Units or any
Units issued in exchange therefor, in the open market or otherwise, or if any
such Units shall be tendered to the Trustee for redemption because not
effectively placed for investment by us, we agree to repurchase such Units at a
price equal to the total cost of such purchase, including accrued interest and
commissions, if any, and transfer taxes on redelivery. Regardless of the amount
paid in the repurchase of any such Units, it is agreed that they may be resold
by us only at the then effective Public Offering Price.
Until the termination of this Agreement with respect to each Fund
covered hereby, we agree that we will make no purchase of Units other than (i)
purchases provided for in this Agreement; (ii) purchases approved by you; and
(iii) purchases as broker in executing unsolicited orders.
8. Other Agreements. We hereby agree as follows:
(a) we will refund, on demand and without deduction, all sales
charges to purchasers of Units of a Fund from us or any dealer
participating in the distribution of our Units if, within 90 days from
the time that the Registration Statement of the Units under the 1933 Act
shall have become effective, (i) the net worth of the Fund shall be
reduced to less than $100,000, or (ii) the Fund shall have been
terminated;
(b) you may instruct the Trustee of any Fund on the Initial Date
of Deposit that, in the event that redemption by any of the Underwriters
of Units constituting part of any unsold allotment of Units shall result
in the Fund having a net worth of less than 40% of the principal amount
of Bonds originally deposited therein, the Trustee shall terminate the
Fund in the manner provided in the Trust Agreement for the Fund and
distribute the Bonds and other assets of the Fund pursuant to the
provisions of the Trust Agreement; and
(c) in the event that any Fund shall have been terminated
pursuant to (b) above, we will refund any sales charges to any purchaser
of Units of the Fund purchased from us, or purchased from any dealer
participating in the distribution of our Units, on demand and without
deduction. We authorize you to charge our account for all refunds of
sales charges in respect of our Units.
9. Substitution of Underwriters. Until the termination of this Agreement
with respect to any Fund covered hereby, we authorize you to arrange for the
substitution hereunder of other persons, who may include you and us, for all or
any part of the commitment of any non-defaulting Underwriter with the consent of
such Underwriter, and of any defaulting Underwriter without the consent thereof,
upon such terms and conditions as you may deem advisable, provided that the
total number of Units to be purchased by us shall not be increased without our
consent and that such substitution shall not in any way affect the liability of
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any defaulting Underwriter to the other Underwriters for damages from such
default, nor relieve any other Underwriter of any obligation under this
Agreement. The expenses chargeable to the account of any defaulting Underwriter
and not paid for by it or by a person substituted for such Underwriter and any
additional losses or expenses arising from such default shall be considered to
be expenses under this Agreement and shall be charged against the accounts of
the non-defaulting Underwriters in proportion to their respective Unit
Commitment.
10. Termination. This Agreement shall terminate with respect to each Fund
covered hereby 30 days after the date on which the public offering of the Units
of such Fund is made in accordance with Section 5 hereof, unless sooner
terminated by you, provided that you may extend this Agreement for not more than
four successive periods of 30 days each upon notice to us and each of the other
Underwriters.
Notwithstanding any settlement or the termination of this Agreement with
respect to any Fund covered hereby, we agree to pay our share of any amount
payable on account of any claim, demand or liability which may be asserted
against the Underwriters, or any of them, based on the claim that the
Underwriters constitute an association, unincorporated business or other
separate entity, and our share of any expenses incurred by you in defending
against any such claim, demand or liability. We also agree to pay any stamp
taxes which may be assessed and paid after such settlement on account of any
Units received or sold hereunder for our account.
Notwithstanding any termination of this Agreement with respect to any
Fund, no sale of the Units of such Fund shall be made by us at any time except
in conformity with the provisions of Section 22(d) of the 1940 Act.
11. Default by Other Underwriters. Default by any one or more of the
other Underwriters in respect of their several obligations under this Agreement
shall neither release you nor us from any of our respective obligations
hereunder.
12. Notices. Notices hereunder shall be deemed to have been duly given if
mailed or delivered by express or overnight courier to us at our address set
forth herein in the case of notices to us, or to you at 000 Xxxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000, in the case of notices to you.
13. Net Capital. You represent that you, and we represent that we, are in
compliance with the capital requirements of Rule 15c3-1, promulgated by the
Commission under the Securities Exchange Act of 1934, and you and we may, in
accordance with and pursuant to such Rule 15c3-1, agree to purchase the amount
of Units to be purchased by you and us, respectively, under the Agreement.
14. Miscellaneous. We confirm that we are a member in good standing of
the Financial Industry Regulatory Authority (FINRA).
We also confirm that we will take reasonable steps to provide the
preliminary prospectus or the Prospectus to any person making written request
therefor to us and to make the preliminary prospectus available to each person
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associated with us expected to solicit customers' orders for the Units prior to
the effective registration date and the Prospectus if he is expected to offer
the Units after the effective date. We understand that you will supply us upon
our request with sufficient copies of such prospectuses to comply with the
foregoing.
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This Agreement is being executed by us and delivered to you in
duplicate. Upon your confirmation hereof and of agreements in identical form
with each of the other Underwriters, this Agreement shall constitute a valid and
binding contract between us.
Very truly yours,
By ____________________________________________
Signature
____________________________________________
Name/Title
Please indicate your firm name and address below exactly as you wish it to
appear in the Prospectus.
____________________________________________
____________________________________________
____________________________________________
____________________________________________
Confirmed as of the date set forth at the head of this Agreement.
FIRST TRUST PORTFOLIOS L.P.
By ______________________
Xxxx Xxxxxxxxxx
Managing Director
Acting severally on its own behalf and on behalf of the other several
Underwriters named in the Prospectus.
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