EXHIBIT 1.5
Dated: September 17, 1998
MASTER AGREEMENT AMONG UNDERWRITERS
FOR UNIT INVESTMENT TRUSTS SPONSORED BY
XXX XXXXXX FUNDS INC.
Xxx Xxxxxx Funds Inc.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Gentlemen:
1. The Trust. We understand that you, Xxx Xxxxxx Funds Inc.
(the "Sponsor"), are entering into this agreement (the "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 after May 1, 1992 of units of
fractional undivided interest in such various series 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 interests 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". Each Trust is or will be
registered as a "unit investment trust" under the Investment Company Act of 1940
(the "1940 Act") by appropriate filings with the Securities and Exchange
Commission (the "Commission"). Additionally, each Trust is or will be registered
with the Commission under the Securities Act of 1933 (the "1933 Act") on Form
S-6 or its successor forms, including a proposed form of prospectus (the
"Preliminary Prospectus").
The registration statement 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 424(b) under 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 424(b) from and after the date on which it shall have
been filed.
The following provisions of this Agreement shall apply separately to
each individual offering of Units by a Trust.
We understand that as of the date upon which we have agreed to
underwrite Units of the Trust the Commission shall not have issued any order
preventing or restraining the use of any Preliminary Prospectus and, further,
that each Preliminary Prospectus shall conform in all material respects to the
requirements of the 1933 Act and the Rules and Regulations thereunder and, as of
its date, shall not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading;
and when the Registration Statement becomes effective, it and the Prospectus,
and any amendments or supplements thereto, will contain all statements that are
required to be stated therein in accordance with the 1933 Act and the Rules and
Regulations thereunder and will in all material respects conform to the
requirements of the 1933 Act and the Rules and Regulations thereunder, and
neither the Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, will contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that you make no
representation or warranty as to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement, in reliance upon and in conformity with, written
information furnished to you by or on behalf of any Underwriter specifically for
use in the preparation thereof.
2. Designation and Authority of Representative. You are hereby
authorized to act as our representative (the "Representative") in connection
with all matters to which this Agreement relates and to take the action provided
herein to be taken by you 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 then a partnership, association or separate entity.
3. Profit or Loss in Acquisition of Securities. It is understood
that the acquisition of securities (the "Securities") for deposit in the
portfolio of the Trust shall be at your cost and risk. We acknowledge that you
will share with us any net deposit profits in the amounts and to the extent, if
any, indicated under "Sponsor and Underwriter Compensation" in the Prospectus.
For the purposes of determining the number of Units underwritten, we understand
that we will be credited for that number of Units set forth opposite our name in
the section entitled "Underwriting" in the prospectus.
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 Securities, except for the exercise of due care in
determining the genuineness of such Securities and the conformance thereof with
the descriptions and qualifications appearing in the Prospectus.
4. Purchase of Units. Promptly after you make a determination to
offer Units of a Trust and you 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 written or oral. The delivery to the Sponsor of a completed
Schedule A to this Agreement shall constitute adequate written advice. Oral
advice shall be binding but shall be promptly confirmed in writing by us by
means of telegraph, telegram or other form of wire or facsimile transmission.
Such written confirmation shall contain the information requested by Schedule A
to this Agreement. 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 (the "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 Date of Deposit and if you
so elect to make such a decrease, you will notify us of such an election by
telephone and promptly confirm the same in writing.
The price to be paid for such Units shall be the Public Offering Price
per Unit (as defined in the Prospectus) as first determined on the Date of
Deposit or such later determination on such Date of Deposit as you shall advise
us, less the sum per Unit indicated under "Sponsor and Underwriter Compensation"
in the Prospectus. Further, each Underwriter who underwrites that number of
Units indicated under "Sponsor and Underwriter Compensation" in the Prospectus
will receive from the Sponsor that additional compensation indicated under such
section of the Prospectus for each Unit it underwrites, providing the Trust size
is in excess of that number of Units, if any, indicated under such section of
the Prospectus. At the Date of Deposit, we will become the owner of the Units
and be entitled to the benefits (except for interest, if any, accruing from the
Date of Deposit to the First Settlement Date) as well as the risks inherent
therein. We acknowledge that those persons, if any, named in the Prospectus
under "Sponsor and Underwriter Compensation" are Managing or Co-Managing
Underwriters of the Trust, as indicated therein, and we acknowledge that those
persons specifically named therein will receive as additional compensation those
respective per Unit amounts set forth in such section of the Prospectus.
You are authorized to retain custody of our Units until the
Registration Statement relating thereto has become effective under the 1933 Act
and you shall have received payment from us for such Units.
You are authorized to file an amendment to said Registration Statement
describing the Securities and furnishing 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 to 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 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 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 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 under the 1933 Act, as amended,
which describes the deposit of Securities and related information. The Public
Offering Price and the terms and conditions of the public offering shall be as
set forth in the Prospectus and shall rely with respect to the offering price of
the Securities upon the determination of the Evaluator named in the Prospectus.
Public advertisement of the offering, if any, shall be made by you on behalf of
the Underwriters on such date as you shall determine. We agree that before we
use any Trust advertising material which we have created, we will obtain your
prior approval to use such advertising materials.
6. Public Offering Price. We agree that each day while this
Agreement is in effect and the evaluation of the Trust is made by the Evaluator
named in the Prospectus, we will contact you for such evaluation and of the
resultant Public Offering Price for the purpose of the offering and sale of the
respective 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 part or all of the
Units purchased by us may be sold to dealers, or other entities with whom we can
legally grant a concession or agency commission, only at the then effective
Public Offering Price, less the 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 our Units 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 concession or agency commission
then effective, to dealers or others.
If prior to the termination of this Agreement, 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 on 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, 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. Compliance With Commission Order. We hereby agree as follows: (a)
we will refund all sales charges to purchasers of Units from us or any dealer
participating in the distribution of Units who purchased such Units from us if,
within ninety days from the time that the Registration Statement of the
respective Units under the 1933 Act shall have become effective, (i) the net
worth of the trust shall be reduced to less than 20% of the principal amount of
Securities originally deposited therein or (ii) the Trust shall have been
terminated; (b) you may instruct the Trustee on the Date of Deposit that, in the
event that redemption by any 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 Securities originally deposited therein, the
Trustee shall terminate the Trust in the manner provided in the Trust Indenture
and Agreement (as defined in the Prospectus) and distribute the Securities and
other assets of the Trust pursuant to the provisions of the Trust Indenture and
Agreement; and (c) in the event that the Trust shall have been terminated
pursuant to (b) above, we will refund any sales charges to any purchaser of such
Units who purchased from us, or purchased from a dealer participating in the
distribution of such Units who purchased such Units from us. We authorize you to
charge our account for all refunds of sales charges in respect to our Units.
9. Substitution of Underwriters. 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 nondefaulting 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
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
nondefaulting Underwriters in proportion to their respective commitments.
10. Termination. This Agreement shall terminate with respect to each
Trust which we have agreed to underwrite 30 days after the date on which the
public offering of the Units of such Trust is made in accordance with Section 5
hereof unless sooner terminated by you, provided that you may extend this
Agreement for not more than eleven successive periods of 30 days each upon
notice to us and each of the other Underwriters.
Notwithstanding any settlement on the termination of this Agreement, 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, no sales of the
Units 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 by deemed to have been duly given if
mailed or telegraphed to us at our address set forth below, in the case of
notices to us, or to you at your address set forth at the head of this
Agreement, 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 15c-3-1 promulgated by
the Commission under the Securities and Exchange Act of 1934, and we may, in
accordance with and pursuant to such Rule 15c-3-1, 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
National Association of Securities Dealers, Inc.
We confirm that we will take reasonable steps to provide the
Preliminary Prospectus or final Prospectus to any person making written request
therefor to us and to make the Preliminary Prospectus or the final Prospectus
available to each person associated with us expected to solicit customers'
orders for the Units prior to the effective registration date and the final
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,
Confirmed as of the date set forth Indicated below our firm name and
at the head of this Agreement address exactly as we wish to appear
in the Prospectus
XXX XXXXXX FUNDS INC.
By____________________________ ____________________________________
Title_________________________ ____________________________________
