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 incurred 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.
This agreement is executed or made by or on behalf of the Company by
the Member, Trustees or officers and not individually. The obligations of this
agreement are not binding upon any Member, Trustee, officer or Interest holder
of the Company individually and are binding only upon the assets and property 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
Name: Xxxxx X. Xxxxx
Title: President
FIRST TRUST ADVISORS L.P.
By
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%
