IPV CALCULATION AGREEMENT
This Agreement is entered into as of August 28, 2007 (the "Effective
Date"), by and between First Trust Advisors L.P. ("Customer"), an Illinois
limited partnership, having its office at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 00X,
Xxxxx, XX 00000, and Telekurs (USA) Inc. ("Telekurs"), a Delaware corporation,
having its principal office at River Bend Center, Xxx Xxxxx Xxxxx, Xxxxxxxx 0,
Xxxxxxxx, XX 00000.
RECITALS
WHEREAS, Customer wishes to have Telekurs calculate and disseminate the
Intra-Day Portfolio Values (the "IPVs") and certain static data for the funds
listed on Schedule A, as the same may be amended from time to time (the "Funds")
in the manner described herein; and
WHEREAS, Telekurs is willing to calculate and disseminate such static
data and IPVs for Customer and the Funds.
NOW THEREFORE, in consideration of the fees payable under this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to the
following:
SECTION 1. CALCULATION AND DISSEMINATION.
Section 1.1. Telekurs shall calculate or outsource to a competent
professional third-party agent who will calculate on Telekurs' behalf the IPVs
for the Funds, each being comprised of certain securities and cash or cash
equivalents which are set forth in the daily portfolio composition files (the
"Files") as published by the National Securities Clearing Corporation (NSCC) or
provided by a third party service provider.
Section 1.2. Telekurs shall calculate and disseminate each IPV to the
applicable securities exchange provided on Schedule A (the "Exchange") in the
manner described in Schedule B hereto (the "Calculation Services").
Section 1.3. Customer shall notify Telekurs of any changes and corrections
to the Files that could affect the calculation of the IPVs as soon as
practicable after Customer becomes aware of such changes or corrections.
Telekurs, using commercially reasonable efforts, shall incorporate into the IPVs
such changes to the extent that such changes may be made within the scope of
Telekurs' current calculation process as soon as practicable after receipt of
such changes and, in any event, no later than 4:00 a.m. (Eastern Standard Time)
the next business day following receipt of the changes from Customer. In the
event Telekurs is unable to make changes to the IPVs in accordance with the
timeframe specified in this Section 1.3, Telekurs shall keep Customer informed
on a regular basis of the status of such changes and the estimated timeframe in
which they will be made.
Section 1.4. The parties may mutually agree to amend Schedule A from time
to time to add additional Funds, which may include an increase in fees as set
forth in Schedule C. Telekurs shall calculate the IPVs for the additional Funds
as soon as commercially reasonable after receipt of the Files for the Funds. All
terms and conditions herein shall apply with respect to any additional Funds
added to Schedule A from time to time pursuant to this Section 1.4.
SECTION 2. FEES.
For services provided under this Agreement, Customer shall pay to
Telekurs the fees set out in Schedule C hereto at the time and in the manner
described in such schedule.
SECTION 3. OWNERSHIP OF THE IPVS.
Customer grants Telekurs a royalty free, non-exclusive, non-transferable
license to use the Funds, including but not limited to the calculation
methodology and component equities of the Funds, solely for the purpose of, in
accordance with the terms and conditions of this Agreement, performing the
obligations and exercising the rights set forth in this Agreement. Customer also
grants Telekurs a royalty free, non-exclusive, non-transferable license to use
the names, logos, trade names, and trademarks owned by Customer or its
affiliates solely for the purposes of disseminating, publishing, displaying, and
otherwise making commercial use of the IPVs, in accordance with the terms and
conditions of this Agreement. No license is granted to use Customer's name,
logos, trade names, and trademarks for any other use without the consent of
Customer.
Customer acknowledges that Telekurs owns all right, title, and interest
to the IPVs created in connection with this Agreement, and may, by itself and/or
through authorized third parties, disseminate, publish, display, and otherwise
make commercial use of said IPVs.
Telekurs grants Customer a royalty free, non-exclusive, non-transferable
license to use Telekurs' trade name and registered trademark solely in materials
referring or relating to the calculation services for the IPVs during the term
of this Agreement and in accordance with the terms and conditions of this
Agreement. No license is granted to use Telekurs' trade name or registered
trademark for any other use, without the consent of Telekurs.
SECTION 4. NOTIFICATION OF ERRORS AND CORRECTION OF THE IPVS.
Telekurs shall notify Customer of any errors or omissions in the IPVs
promptly after Telekurs becomes aware of such errors or omissions and in any
event, no later than ninety (90) minutes after Telekurs' discovery of the
dissemination of the applicable IPV containing the error or omission if such
errors or omissions occur during the hours listed on Schedule A hereto.
Telekurs, using commercially reasonable efforts, shall correct any errors or
omissions in any IPV to the extent that such corrections may be made within the
scope of Telekurs' calculation process as soon as practicable after notification
of such errors or omissions is sent to Customer and, in any event, no later than
4:00 a.m. (Eastern Standard Time) the next business day following dissemination
of the applicable IPV containing the error or omission. In the event Telekurs is
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unable to correct any errors or omissions to the IPVs in accordance with the
timeframe specified in this Section 4, Telekurs shall keep Customer informed on
a regular basis of the status of such corrections and the estimated timeframe in
which they will be made.
SECTION 5. NON-ENDORSEMENT, USE OF INTELLECTUAL PROPERTY.
Section 5.1. Telekurs, by performing under this Agreement, does not express
or imply any endorsement or approval of the IPVs, Funds or Customer. Customer
will not make or publish any statement that Telekurs approves of or endorses the
IPVs or the Funds.
Section 5.2. Notwithstanding anything in this Agreement to the contrary,
during the term of this Agreement (except for regulatory inquiries or
proceedings) Customer may make or publish statements, including, but not limited
to, in registration statements filed with the Securities and Exchange
Commission, or any regulatory body or government agency, and in promotional,
marketing or subscription materials of the Funds, that Telekurs prepares,
calculates or disseminates IPVs for the Funds.
Section 5.3. Other than as specifically permitted in this Agreement,
neither party shall use the name, logo, trademark or trade name of the other
party or any affiliate of the other party without the prior written consent of
the other party.
SECTION 6. REPRESENTATIONS AND WARRANTIES, LIMITATION OF LIABILITY;
INDEMNIFICATION.
Section 6.1. Customer represents and warrants that all Funds shall be
listed on a national securities exchange. The listing exchanges applicable to
the Funds are set forth in Schedule A hereto.
Section 6.2. Customer represents and warrants that with respect to the
rights granted in Section 3, Customer either owns such rights or is a licensee
under a license permitting Customer to grant such rights to Telekurs.
Section 6.3. THE IPVS CALCULATED AND DISSEMINATED AND ANY OTHER DATA
DISSEMINATED BY TELEKURS OR ANY OF ITS AFFILIATES OR AGENTS ARE FOR
INFORMATIONAL PURPOSES ONLY AND ARE NOT INTENDED FOR TRADING PURPOSES. AS SUCH,
THE IPVS AND OTHER DATA DISSEMINATED BY TELEKURS ARE PROVIDED ON AN "AS IS"
BASIS. TELEKURS MAKES NO WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE IPVS,
DATA OR INFORMATION COVERED BY THIS AGREEMENT, OR AS TO RESULTS TO BE ATTAINED
BY CUSTOMER AND THE FUNDS OR OTHERS FROM THE USE OF THE IPVS OR DATA, INCLUDING,
BUT NOT LIMITED TO, EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR USE.
Section 6.3. Customer acknowledges and agrees that the IPVs calculated and
disseminated by Telekurs may be inaccurate or incomplete and are subject to
error, delay or change. Telekurs will not be deemed in default or liable
hereunder if, as a result of any causes or circumstances beyond Telekurs'
reasonable control, there occurs a delay, interruption, or failure of (a) the
calculation or delivery of the IPVs, or (b) any information or corrections
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relating thereto to Customer or its designees. So long as such delay,
interruption or failure continues, Telekurs will use commercially reasonable
efforts to eliminate such conditions and to keep Customer informed on a regular
basis concerning the matters causing such delay, interruption or failure and the
prospects for their termination.
Section 6.4. Except for the indemnification obligations of each party as
set forth below in Sections 6.5 and 6.6, and breaches of Section 9, neither
party shall have any liability to the other party for any special, incidental,
punitive, indirect, or consequential damages (including lost profits) arising
from or relating to this Agreement, even if expressly notified of the
possibility of such damages.
Section 6.5. Customer shall defend, indemnify and hold Telekurs, its
affiliates and each of their respective officers, directors, and employees
harmless in respect of all losses, damages, costs, claims and expenses
(including reasonable attorneys' fees) ("Losses") asserted against or incurred
by Telekurs that arise out of any claim, action or proceeding which relates to:
(i) a material breach by Customer of any material obligation, term, condition,
representation, warranty or covenant herein; or (ii) Customer's willful
misconduct or gross negligence; provided, however, in no event shall Customer be
liable for Losses which relate to or arise out of Telekurs' gross negligence or
willful misconduct.
Section 6.6. Telekurs shall defend, indemnify and hold Customer, its
affiliates and each of their respective officers, directors, and employees
harmless in respect of all Losses asserted against or incurred by Customer that
arise out of any claim, action or proceeding which relates to: (i) a material
breach by Telekurs of any material obligation, term, condition, representation,
warranty or covenant herein; (ii) Telekurs' willful misconduct or gross
negligence or (iii) any claim or action brought by any third-party alleging that
the Calculation Services, violates or in any manner contravenes or breaches any
patent, copyright, trademark, license or other property or proprietary right of
any third-party; provided, however, in no event shall Telekurs be liable for
Losses which relate to or arise out of Customer's gross negligence or willful
misconduct.
SECTION 7. TERM.
The term of this Agreement shall begin on the Effective Date and,
subject to earlier termination pursuant to Section 8, continue for a period of
three years from such date (the "Initial Term"). The term of this Agreement
shall automatically renew for successive one-year periods (each, a "Renewal
Term") unless either party elects not to renew by giving not less than 60 days'
prior written notice to the other before the end of the Initial Term or Renewal
Term, as applicable.
SECTION 8. TERMINATION.
Section 8.1. In the event of a breach of this Agreement by a party, the
non-breaching party, may terminate this Agreement by giving fourteen (14) days
prior written notice to the breaching party and, if the breaching party has not
corrected such breach within such fourteen day period, the Agreement may be
terminated, at the option of the non-breaching party, at the end of such
fourteen day period.
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Section 8.2. In addition, either party may terminate this Agreement if the
other party becomes insolvent, files a petition in bankruptcy or such a petition
is filed by any third party and is not favorably resolved within sixty (60)
days, or if the other party has made an assignment for the benefit of creditors,
or a receiver has been appointed for the other party.
Section 8.3. Telekurs may elect, without prejudice to any other rights or
remedies, to terminate this Agreement, with or without cause, upon ninety (90)
days prior written notice to the Customer.
Section 8.4. Notwithstanding any other provision of this Agreement,
Customer may elect to terminate this Agreement as to any one Fund, with thirty
(30) days' prior written notice to Telekurs, should Customer elect to terminate
the public offering of any Fund, in which case, the monthly fee for such Fund as
provided in Schedule C hereto shall be prorated based upon the number of elapsed
days in the calendar month of the applicable Initial Term or then current
Renewal Term.
SECTION 9. CONFIDENTIALITY.
In the course of this Agreement, each of the parties may obtain or be
given access to certain confidential or proprietary data, records, materials,
information and trade secrets relating to the other party's business operations,
strategic plans and other confidential matters ("Confidential Information").
Such Confidential Information, including the terms of this Agreement, is of a
highly sensitive nature, representing special, valuable and unique commercial
assets. Each party and its employees and agents will hold in strict confidence
and trust all such Confidential Information of the other party. Each party will
not disclose any of the Confidential Information or make it available to any
person or entity or use it for its benefit or the benefit of any other person or
entity, except as provided in this Agreement, or unless such Confidential
Information was known by the party receiving it without any obligation of
confidentiality prior to disclosure of such Confidential Information by the
other party, or unless specific written authorization is received from the party
whose Confidential Information is involved. Each party agrees not to make copies
of any such Confidential Information except as required hereunder. Each party
will not disclose the Confidential Information to any of its employees or
agents, except those with a need to know and then, only to the extent required.
No party shall have any obligations under this paragraph with respect to any
information that: (a) is or becomes publicly known without breach of this or any
other agreement; (b) is already known at the time of disclosure, free of
restriction; (c) is rightfully received from a third party without restriction
or breach of this Agreement; (d) is independently developed by such party
without use of any Confidential Information of the other; or (e) is required to
be disclosed to any governmental agency or is required by any subpoena or
summons, order or judicial process; provided that the parties shall notify each
other immediately of any such subpoena, summons, order or judicial process and
will use reasonable efforts to avail themselves of all legally available
confidentiality procedures to limit the scope, nature and extent of required
disclosure and impose confidentiality obligations as permitted by law or
regulation upon those to whom any Confidential Information is disclosed.
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SECTION 10. THIRD PARTY FEES.
As of the Effective Date of this Agreement, and to the best of Telekurs'
knowledge, no additional fees will be levied upon Telekurs or Customer for use
of the third-party (e.g., exchange) data that are used as inputs to the IPV
calculations contemplated hereunder.
In the event that this data usage does become subject to additional
approvals and/or fees in the future, Customer and Telekurs shall evaluate each
such situation and reach mutual agreement on how the additional costs shall be
borne. Client and Telekurs expressly agree in this situation that the mutual
agreement must be reasonable and make good business sense for both parties.
SECTION 11. THIRD PARTY SERVICE LEVELS.
In the event that the future Customer IPVs require real-time pricing
inputs from an exchange or other third-party source that Telekurs does not
provide in real-time, Customer and Telekurs shall discuss the implications of
acquiring to upgrading such data source to real-time. The goal of each such
discussion will be to evaluate each situation and reach mutual agreement on how
to proceed. Customer and Telekurs expressly agree in this situation that the
mutual agreement must be reasonable and make good business sense for both
parties.
SECTION 12. NOTICE.
All notices and other communications given or made pursuant hereto shall
be in writing and shall be delivered personally or sent by registered or
certified mail (postage prepaid, return receipt requested), overnight courier or
facsimile. Any such notice shall be deemed given when so delivered personally,
or, if mailed, five days after the date of deposit in the United States mails,
or, if sent by overnight courier, on the next business day following deposit
with such courier or, if sent via facsimile transmission, on the day of
transmission provided written confirmation of receipt is obtained promptly after
transmission, to the parties at the following addresses:
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Telekurs: Telekurs (USA) Inc.
Attention: President
River Bend Center
Xxx Xxxxx Xxxxx
Xxxxxxxx 0
Xxxxxxxx, XX 00000
Telephone: 000.000.0000
Facsimile: 203.967.2961
Customer: First Trust Advisors L.P.
Attn: General Counsel
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 13. NO RELATIONSHIP.
This Agreement does not create a partnership, joint venture or agency
relationship between the parties. Neither party shall have any power to obligate
or bind the other party in any manner, whatsoever.
SECTION 14. WAIVER.
No waiver by either party of a breach or a default under this Agreement
shall be deemed a waiver by such party of a subsequent breach or default of a
like or similar nature, and resort by either party to any remedy shall not be
construed as a waiver by such party of its right to resort to any other
remedies.
SECTION 15. SEVERABILITY.
If any one or more of the provisions contained in this Agreement, shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
then to the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms and commercial effect to such invalid or
unenforceable provision as may be possible and be valid and enforceable.
SECTION 16. COMPLETE AGREEMENT; MODIFICATIONS OR WAIVERS; FORM; COUNTERPARTS.
This Agreement, together with any schedules and exhibits, is the
complete and exclusive statement of the agreements between the parties with
respect to the subject matter hereof and supersedes any oral or written
communications or representations or agreements relating thereto. No changes,
modifications or waivers regarding this Agreement shall be binding unless in
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writing and signed by the parties hereto. This Agreement, including any
modifications, waivers or notifications relating thereto, may be executed and
delivered by facsimile or electronic mail. Any such facsimile or electronic mail
transmission shall constitute the final agreement of the parties and conclusive
proof of such agreement. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by any one or more parties
hereto, and each such executed counterpart (including any facsimile thereof)
shall be, and shall be deemed to be, an original, but all of which shall
constitute, and shall be deemed to constitute, in the aggregate but one and the
same instrument.
SECTION 17. SURVIVAL.
Sections 2, 3, 6 and 9 shall survive the termination of this Agreement.
SECTION 18. MISCELLANEOUS.
Section 18.1. The captions used in this Agreement are inserted only for
convenience of reference. Such captions shall not be deemed to govern, limit,
modify or in any manner affect the scope, meaning or intent of the provisions of
this Agreement, nor shall such captions otherwise be given any legal effect.
Section 18.2. Words importing the singular number only shall include the
plural and vice versa, and words importing persons shall include firms and
corporations and vice versa.
Section 18.3. This Agreement shall bind and inure to the benefit of each
party's successors and permitted assigns. Neither party may assign any of its
rights or obligations under this Agreement (by operation of law or otherwise)
without the prior written consent of the other party, except that Telekurs may,
upon written notice to Customer, assign this Agreement to an affiliate without
obtaining consent.
Section 18.4. This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the United States and the State
of New York, without giving effect to conflicts of law principles thereof.
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IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first set forth above.
TELEKURS (USA) INC.
By: /s/ Xxxxx X. Xxxxxx
___________________________________________
Name: Xxxxx X. Xxxxxx
______________________________________
Title: President
______________________________________
Date: 08/28/07
______________________________________
By: /s/ Xxxxxxx X. Xxxxx
___________________________________________
Name: Xxxxxxx X. Xxxxx
______________________________________
Title: CFO
______________________________________
Date: 08/28/07
______________________________________
FIRST TRUST ADVISORS L.P.
By: /s/ Xxxxx X. Xxxxx
___________________________________________
Name: Xxxxx X. Xxxxx
_____________________________________
Title: President
_____________________________________
Date: 8/28/07
_____________________________________
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SCHEDULE A
LIST OF FUNDS AND EXCHANGES
FUND NAME (SYMBOL) SECURITIES EXCHANGES DATE OF SERVICE HOURS
First Trust FTSE American Stock Exchange August 30, 2007 9:00AM - 4:15PM
EPRA/NAREIT Global Real Eastern
Estate Index Fund
First Trust DJ STOXX(R) American Stock Exchange August 30, 2007 9:00AM - 4:15PM
Select Dividend 30 Index Eastern
Fund
SCHEDULE B
IPV CALCULATION SERVICE DESCRIPTION:
Telekurs will provide Customer with a complete service to calculate and publish
IPVs for Customer's Funds. Elements of this service include,
o IPV Calculation
o IPVs are calculated in a neutral manner not influenced by events in
the financial markets.
o IPVs are calculated independently from the origin of the
underlying index, which permits Telekurs to calculate the IPV of
any fund regardless of its underlying origin.
o Customer will provide the basket composition and weighting of its
fund(s) on a daily basis.
o The IPV is calculated every 15 seconds from 9:00 A.M. through
4:15 P.M. New York time, and the result is published to MDFstream,
Telekurs' global streaming market data feed.
o Telekurs will provide the market data required as inputs to the
calculation.
o Telekurs sources market data from over 200 global exchanges and
hundreds of third party contributors. Telekurs believes that
real-time pricing coverage is appropriate to Customer's needs
with regard to the IPV inputs contemplated as of the effective
date of this Agreement. For securities that are denominated in
foreign currencies, Telekurs will apply current exchange rates
derived from appropriate sources to convert values to U.S.
dollars.
o The actual IPV calculation will be performed by Telekurs'
sister company, Rolotec AG.
o Supported fund types (as of July 2007):
o Equity-based basket funds
o Fixed income basket funds
o Factor-based funds (e.g., those where the fund price is
determined by multiplying an index times a factor).
o Infrastructure
o The infrastructure to perform the IPV calculation is the
responsibility of Telekurs and/or Rolotec AG.
o Telekurs maintains separate, redundant data centers to ensure
high availability of MDFstream.
o Exchange Connectivity. Telekurs maintains the connectivity and
functionality necessary to deliver the IPV calculations to one
of the following exchanges for dissemination via normal
professional distribution channels:
o American Stock Exchange
o Euronext
o Swiss Stock Exchange/SWX
o Virt-X
o Xetra
o If Telekurs is providing the IPVs to the American Stock
Exchange("Amex"), Telekurs will provide the IPVs in
accordance with the current specifications of the Amex Index
Feed. The Amex Index Feed is a service provided by the Amex
to approved index calculation providers who want to
publish customized index data to the Amex. Telekurs must
calculate and disseminate the data to Amex according to
the Amex Index Feed standard interface specifications
for all external index sources of Amex. The format of the
Amex Index Feed is a simplified version of the Financial
Information Exchange (FIX) protocol. The data must be
disseminated to Amex via TCP/IP. The connection is expected
to be up during market hours. All connections will be
initiated by Telekurs.
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SCHEDULE C
FEES
One-time set up fee for times in Schedule A $ 30,000
ETF Pricing, funds 1-10 (each) $ 2,000 Monthly
ETF Pricing, funds 11-20 (each) $ 1,500 Monthly
ETF Pricing, funds 21+ (each) $ 1,250 Monthly
Customer will be billed for the one-time set up fee upon execution of
the Agreement. Customer will be billed for the above monthly fees on a monthly
basis in arrears. If the Agreement is executed during the middle of a month,
then the Customer will be billed on a prorated basis for the remainder of the
applicable month.
All fees will be due and payable within thirty (30) business days of the
invoice date.
