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 "Trust" and the reference to "Trust" in
this Agreement applies only to such Trust, and such units of such Trust
offered are hereinafter called the "Units". The Trust 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 Trust 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 Trust
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 Trust. 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 Trust 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 Trust 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 Trust shall be at your cost and risk.
Accordingly, if the aggregate cost of the Bonds to a Trust on the date
they are delivered to the Trustee for deposit in the Trust, 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 as Sponsor. 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 Trust.
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 reasonable 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 Trust, you agree to notify us as to the nature of the
Trust and to inquire as to whether we desire to participate in such
offering. We will advise you as soon as practicable as to our decision
whether to participate in such offering. Such advice may be by telephone,
email, via your Internet trading system or facsimile transmission. For
those Trusts where we are making a commitment to purchase a number of
Units based on indications of interest received from customers based on a
preliminary prospectus prior to the date the Registration Statement
becomes effective, we will notify you of the number of Units which we
will purchase prior to the Initial Date of Deposit (as defined below),
per your requirements, including a wire transfer to your account of funds
for payment of Units purchased by us. For those Trusts where we are
making a commitment to purchase a number of Units prior to the date the
Registration Statement becomes effective before the Trust has been
publicly offered, we will notify you of the number of Units we will
purchase on the Initial Date of Deposit. 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 Trust 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 Trust is executed and the Bonds are delivered
to the Trustee for deposit in the portfolio of the Trust (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 Trust to
purchase from you and to pay for on the First Settlement Date, as defined
in the Prospectus, the number of Units in the Trust 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 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 Trust will also take action with respect
to and is responsible for 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 initial registration statement for a
Trust we have agreed to offer has been filed with the Commission and
indications of interest may be taken from customers pursuant to the
Trust's preliminary prospectus, when applicable. We agree and acknowledge
that until such time as the Registration Statement has been declared
effective, we are not authorized to make a public offering of the Trust.
You agree that you will advise us promptly, confirming same in writing,
when the Registration Statement for a Trust we have agreed to offer 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 as
defined 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 Trust and the evaluation of the Trust 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, when applicable based on our commitment prior to the
commencement of a Trust's offering period, we will advise you of the
number of Units which we have purchased to 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 Trust 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, you 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 you
only at the then effective Public Offering Price.
Until the termination of this Agreement with respect to each
Trust 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 Trust 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 Trust shall be reduced to less than
$100,000, or (ii) the Trust shall have been terminated;
(b) you may instruct the Trustee of any Trust 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 Trust having a net worth
of less than 40% of the principal amount of Bonds originally
deposited therein, the Trustee shall terminate the Trust in the
manner provided in the Trust Agreement for the Trust and
distribute the Bonds and other assets of the Trust pursuant to
the provisions of the Trust Agreement; and
(c) in the event that any Trust shall have been
terminated pursuant to (b) above, we will refund any sales
charges to any purchaser of Units of the Trust 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 Trust 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 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 Trust covered hereby (i) 30 days after the Initial Date of Deposit
for a Trust where we take orders during a traditional offering period
beginning after the effective date of the Registration Statement, or (ii)
on the day following the Initial Date of Deposit for a Trust where
indications of interest are taken during the Trust's pre-effective period
pursuant to a preliminary prospectus and executed on the Initial Date of
Deposit in accordance with Section 5 hereof, unless sooner terminated by
either you or us, 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 Trust 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 Trust, no sale of the Units of such Trust 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 associated with us expected to solicit customers'
indications of interest 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.
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
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Signature
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Name/Title
Please indicate your firm name and address below exactly as you wish it
to appear in the Prospectus.
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Confirmed as of the date set forth at the head of this Agreement.
FIRST TRUST PORTFOLIOS L.P.
By
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Xxxx Xxxxxxxxxx
Managing Director
Acting severally on its own behalf and on behalf of the other several
Underwriters named in the Prospectus.
