FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
AGREEMENT made as of September 22, 2005, by and between First Trust
Exchange-Traded Fund (the "Fund"), and The Bank of New York, a New York banking
organization ("BNY").
WITNESSETH:
WHEREAS, the Fund is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain BNY to provide for the portfolios
identified on Exhibit A hereto (each, a "Series") the services described herein,
and BNY is willing to provide such services, all as more fully set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties hereby agree as follows:
1. Appointment. The Fund hereby appoints BNY as its agent for the term
of this Agreement to perform the services described herein. BNY hereby accepts
such appointment and agrees to perform the duties hereinafter set forth.
2. Representations and Warranties. The Fund hereby represents and
warrants to BNY, which representations and warranties shall be deemed to be
continuing, that:
(a) It is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform
its obligations hereunder;
(b) This Agreement has been duly authorized, executed and
delivered by the Fund in accordance with all requisite action and
constitutes a valid and legally binding obligation of the Fund,
enforceable in accordance with its terms;
(c) It is conducting its business in compliance with all
applicable laws and regulations, both state and federal, and has
obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted; there is no statute,
regulation, rule, order or judgment binding on it and no provision of
its Declaration of Trust or by-laws, nor of any mortgage, indenture,
credit agreement or other contract binding on it or affecting its
property which would prohibit its execution or performance of this
Agreement; and
(d) To the extent the performance of any services described
in Schedule II attached hereto by BNY in accordance with the then
effective Prospectus (as hereinafter defined) for the Fund would
violate any applicable laws or regulations, the Fund shall immediately
so notify BNY in writing and thereafter shall either furnish BNY with
the appropriate values of securities, net asset value or other
computation, as the case may be, or, subject to the prior approval of
BNY, instruct BNY in writing to value securities and/or compute net
asset value or other computations in a manner the Fund specifies in
writing, and either the furnishing of such values or the giving of such
instructions shall constitute a representation by the Fund that the
same is consistent with all applicable laws and regulations and with
its Prospectus.
3. Delivery of Documents. (a) The Fund will promptly deliver to BNY
true and correct copies of each of the following documents as currently in
effect and will promptly deliver to it all future amendments and supplements
thereto, if any:
(i) The Fund's Declaration of Trust or other organizational
document and all amendments thereto (the "Fund Agreement");
(ii) The Fund's bylaws (the "Bylaws");
(iii) Resolutions of the Fund's Board of Trustees authorizing
the execution, delivery and performance of this Agreement by the Fund;
(iv) The Fund's registration statement most recently filed
with the Securities and Exchange Commission (the "SEC") relating to the
shares of the Fund (the "Registration Statement");
(v) The Fund's Notification of Registration under the 1940
Act on Form N-8A filed with the SEC; and
(vi) The Fund's Prospectus and Statement of Additional
Information pertaining to the Series (collectively, the "Prospectus").
(b) The copy of the Fund Agreement shall be certified by the Secretary
of State (or other appropriate official) of the state of organization, and if
the Fund Agreement is required by law also to be filed with a county or other
officer or official body, a certificate of such filing shall be filed with a
certified copy submitted to BNY. Each copy of the Bylaws, Registration Statement
and Prospectus, and all amendments thereto, and copies of Board resolutions,
shall be certified by the Secretary or an Assistant Secretary of the Fund.
(c) It shall be the sole responsibility of the Fund to deliver to BNY
its currently effective Prospectus and BNY shall not be deemed to have notice of
any information contained in such Prospectus until it is actually received by
BNY.
4. Duties and Obligations of BNY. (a) Subject to the direction and
control of the Fund's Trustees and the provisions of this Agreement, BNY shall
provide to the Fund (i) the administrative services set forth on Schedule I
attached hereto and (ii) the valuation and computation services listed on
Schedule II attached hereto.
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(b) In performing hereunder, BNY shall provide, at its expense, office
space, facilities, equipment and personnel.
(c) BNY shall not provide any services relating to the management,
investment advisory or sub-advisory functions of the Fund, distribution of
shares of the Fund, maintenance of the Fund's financial records, except to the
extent specifically set forth herein or other services normally performed by the
Funds' respective counsel or independent auditors.
(d) Upon receipt of the Fund's prior written consent (which shall not
be unreasonably withheld), BNY may delegate any of its duties and obligations
hereunder to any delegee or agent whenever and on such terms and conditions as
it deems necessary or appropriate. Notwithstanding the foregoing, no Fund
consent shall be required for any such delegation to any other subsidiary of The
Bank of New York Company, Inc. BNY shall not be liable to the Fund for any loss
or damage arising out of, or in connection with, the actions or omissions to act
of any delegee or agent unaffiliated with BNY and utilized hereunder so long as
BNY acts in good faith and without negligence or willful misconduct in the
selection of such delegee or agent.
(e) The Fund shall cause its officers, advisors, sponsor, distributor,
legal counsel, independent accountants, current administrator (if any) and
transfer agent to cooperate with BNY and to provide BNY, upon request, with such
information or documents relating to the Fund as is within the possession or
knowledge of such persons, in order to enable BNY to perform its duties
hereunder. In connection with its duties hereunder, BNY shall be entitled to
rely, and shall be held harmless by the Fund when acting in reliance, upon the
instructions, advice or any documents provided to BNY from (i) a person
reasonably believed by BNY to have been identified by the Fund as authorized to
give advice on behalf of the Fund or its advisors (each an "Authorized Person"),
(ii) Fund counsel, (iii) the Fund's independent accountants, (iv) the Fund's
adviser and (v) the Fund's distributor. BNY shall not be liable for any loss,
damage or expense resulting from or arising out of the failure of the Fund to
cause any information, documents or advice from legal counsel or independent
accountants to be provided to BNY as provided herein. All fees or costs charged
by such persons shall be borne by the Fund.
(f) Nothing in this Agreement shall limit or restrict BNY, any
affiliate of BNY or any officer or employee thereof from acting for or with any
third parties, and providing services similar or identical to some or all of the
services provided hereunder.
(g) The Fund shall furnish BNY with any and all instructions,
explanations, information, specifications and documentation deemed necessary by
BNY in the performance of its duties hereunder, including, without limitation,
the amounts or written formula for calculating the amounts and times of accrual
of Fund liabilities and expenses. BNY shall not be required to include as Fund
liabilities and expenses, nor as a reduction of net asset value, any accrual for
any federal, state, or foreign income taxes unless the Fund shall have specified
to BNY the precise amount of the same to be included in liabilities and expenses
or used to reduce net asset value. The Fund shall also furnish BNY with bid,
offer, or market values of the Fund's portfolio securities ("Securities") if BNY
notifies the Fund that same are not available to BNY from a security pricing or
similar service utilized, or subscribed to, by BNY which BNY in its judgment
deems reliable at the time such information is required for calculations
hereunder. At any time and from time to time, the Fund also may furnish BNY with
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bid, offer, or market values of Securities and instruct BNY to use such
information in its calculations hereunder. BNY shall at no time be required or
obligated to commence or maintain any utilization of, or subscriptions to, any
securities pricing or similar service. In no event shall BNY be required to
determine, or have any obligations with respect to, whether a market price
represents any fair or true value, nor to adjust any price to reflect any events
or announcements, including, without limitation, those with respect to the
issuer thereof, it being agreed that all such determinations and considerations
shall be solely for the Fund.
(h) BNY may apply to an officer of the Fund for written instructions
with respect to any matter arising in connection with BNY's performance
hereunder for the Fund, and BNY shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with such instructions.
Such application for instructions may, at the option of BNY, set forth in
writing any action proposed to be taken or omitted to be taken by BNY with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken, and BNY shall not be liable for any
action taken or omitted to be taken in accordance with a proposal included in
any such application on or after the date specified therein unless, prior to
taking or omitting to take any such action, BNY has received written
instructions in response to such application specifying the action to be taken
or omitted.
(i) If BNY shall be in doubt as to any question of law pertaining to
any action it should or should not take, BNY may request advice from outside
counsel of its own choosing (who may be counsel for the Fund, the Fund's
investment adviser or BNY, at the option of BNY). The Fund shall pay the
reasonable cost of any counsel retained by BNY with prior notice to the Fund.
(j) Notwithstanding any other provision contained in this Agreement or
Schedule I or II attached hereto, BNY shall have no duty or obligation with
respect to, including, without limitation, any duty or obligation to determine,
or advise or notify the Fund of: (i) the taxable nature of any distribution or
amount received or deemed received by, or payable to the Fund, (ii) the taxable
nature or effect on the Fund or its shareholders of any corporate actions, class
actions, tax reclaims, tax refunds or similar events, (iii) the taxable nature
or taxable amount of any distribution or dividend paid, payable or deemed paid,
by the Fund to its shareholders, or (iv) the effect under any federal, state, or
foreign income tax laws of the Fund making or not making any distribution or
dividend payment, or any election with respect thereto.
(k) BNY shall have no duties or responsibilities whatsoever except such
duties and responsibilities as are specifically set forth in this Agreement and
Schedules I and II attached hereto, and no covenant or obligation shall be
implied against BNY in connection with this Agreement.
(l) BNY, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by any Authorized Person on behalf of the Fund and
shall have no duty or obligation to review the accuracy, validity or propriety
of such instructions, explanations, information, specifications or
documentation, including, without limitation, evaluations of securities; the
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amounts or formula for calculating the amounts and times of accrual of Series'
liabilities and expenses; the amounts receivable and the amounts payable on the
sale or purchase of Securities; and amounts receivable or amounts payable for
the sale or redemption of Fund shares effected by or on behalf of the Fund. In
the event BNY's computations hereunder rely, in whole or in part, upon
information, including, without limitation, bid, offer or market values of
securities or other assets, or accruals of interest or earnings thereon, from a
pricing or similar service utilized, or subscribed to, by BNY which BNY in its
judgment deems reliable, BNY shall not be responsible for, under any duty to
inquire into, or deemed to make any assurances with respect to, the accuracy or
completeness of such information. Without limiting the generality of the
foregoing, BNY shall not be required to inquire into any valuation of securities
or other assets by the Fund or any third party described in this paragraph (l)
even though BNY in performing services similar to the services provided pursuant
to this Agreement for others may receive different valuations of the same or
different securities of the same issuers.
(m) BNY, in performing the services required of it under the terms of
this Agreement, shall not be responsible for determining whether any interest
accruable to the Fund is or will be actually paid, but will accrue such interest
until otherwise instructed by the Fund.
(n) BNY shall not be responsible for delays or errors which occur by
reason of circumstances beyond its control in the performance of its duties
under this Agreement, including, without limitation, labor difficulties within
or without BNY, mechanical breakdowns, flood or catastrophe, acts of God,
failures of transportation, interruptions, loss, or malfunctions of utilities,
communications or computer (hardware or software) services. Nor shall BNY be
responsible for delays or failures to supply the information or services
specified in this Agreement where such delays or failures are caused by the
failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
5. Allocation of Expenses. Except as otherwise provided herein, all
costs and expenses arising or incurred in connection with the performance of
this Agreement shall be paid by the Fund, including but not limited to,
organizational costs and costs of maintaining corporate existence, taxes,
interest, brokerage fees and commissions, insurance premiums, compensation and
expenses of the Fund's Trustees, directors, officers or employees, legal,
accounting and audit expenses, management, advisory, sub-advisory,
administration and shareholder servicing fees, charges of custodians, transfer
and dividend disbursing agents, expenses (including clerical expenses) incident
to the issuance, redemption or repurchase of the Fund shares, fees and expenses
incident to the registration or qualification under federal or state securities
laws of the Fund or its shares, costs (including printing and mailing costs) of
preparing and distributing Prospectuses, reports, notices and proxy material to
the Fund's shareholders, all expenses incidental to holding meetings of the
Fund's Trustees, directors and shareholders, and extraordinary expenses as may
arise, including litigation affecting the Fund and legal obligations relating
thereto for which the Fund may have to indemnify its Trustees, directors and
officers.
6. Standard of Care; Indemnification. (a) Except as otherwise provided
herein, BNY shall not be liable for any costs, expenses, damages, liabilities or
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claims (including attorneys' and accountants' fees) incurred by the Fund, except
those costs, expenses, damages, liabilities or claims arising out of BNY's own
negligence or willful misconduct. In no event shall BNY be liable to the Fund or
any third party for special, indirect or consequential damages, or lost profits
or loss of business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action, but BNY shall be liable to the Fund for direct money damages
caused by BNY's own negligence or willful misconduct. BNY shall not be liable
for any loss, damage or expense, including counsel fees and other costs and
expenses of a defense against any claim or liability, resulting from, arising
out of, or in connection with its performance hereunder, including its actions
or omissions, the incompleteness or inaccuracy of any specifications or other
information furnished by the Fund, or for delays caused by circumstances beyond
BNY's control, unless such loss, damage or expense arises out of the negligence
or willful misconduct of BNY.
(b) The Fund shall indemnify and hold harmless BNY from and against any
and all costs, expenses, damages, liabilities and claims (including claims
asserted by the Fund), and reasonable attorneys' and accountants' fees relating
thereto, which are sustained or incurred or which may be asserted against BNY,
by reason of or as a result of any action taken or omitted to be taken by BNY in
good faith hereunder or in reliance upon (i) any law, act, regulation or
interpretation of the same, (ii) the Fund's Registration Statement or
Prospectus, (iii) any instructions of an Authorized Person, or (iv) any opinion
of legal counsel for the Fund or BNY, or arising out of transactions or other
activities of the Fund which occurred prior to the commencement of this
Agreement; provided, that the Fund shall not indemnify BNY for costs, expenses,
damages, liabilities or claims for which BNY is liable under preceding 6(a).
This indemnity shall be a continuing obligation of the Fund, its successors and
assigns, notwithstanding the termination of this Agreement. Without limiting the
generality of the foregoing, the Fund shall indemnify BNY against and save BNY
harmless from any loss, damage or expense, including counsel fees and other
costs and expenses of a defense against any claim or liability, arising from any
one or more of the following:
(i) Errors in records or instructions, explanations,
information, specifications or documentation of any kind, as the case
may be, supplied to BNY by any third party described above in 4(e) or
4(h) above;
(ii) Action or inaction taken or omitted to be taken by BNY
pursuant to written or oral instructions of the Fund or otherwise
without negligence or willful misconduct;
(iii) Any action taken or omitted to be taken by BNY in good
faith in accordance with the advice or opinion of counsel for the Fund
or its own outside counsel;
(iv) Any improper use by the Fund or its agents, distributor
or investment advisor of any valuations or computations supplied by BNY
pursuant to this Agreement;
(v) The method of valuation of the securities and the method
of computing each Series' net asset value; or
(vi) Any valuations of securities or net asset value provided
by the Fund.
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(c) Actions taken or omitted in reliance on oral or written
instructions, or upon any information, order, indenture, stock certificate,
power of attorney, assignment, affidavit or other instrument reasonably believed
by BNY to be genuine or bearing the signature of a person or persons believed to
be authorized to sign, countersign or execute the same, or upon the opinion of
legal counsel for the Fund or its own outside counsel, shall be conclusively
presumed to have been taken or omitted in good faith.
7. Record Retention and Confidentiality. BNY shall keep and maintain
on behalf of the Fund all books and records which the Fund and BNY are, or may
be, required to keep and maintain in connection with the services to be provided
hereunder pursuant to any applicable statutes, rules and regulations, including,
without limitation, Rules 31a-1 and 31a-2 under the 1940 Act. BNY further agrees
that all such books and records shall be the property of the Trust and to make
such books and records available for inspection by the Fund, by the investment
adviser to the Fund, or by the SEC at reasonable times.
8. Each party shall keep confidential any information relating to the
other party's business ("Confidential Information"). Confidential Information
shall include (a) any data or information that is competitively sensitive
material, and not generally known to the public, including, but not limited to,
information about product plans, marketing strategies, finances, operations,
customer relationships, customer profiles, customer lists, sales estimates,
business plans, and internal performance results relating to the past, present
or future business activities of the Fund or BNY and their respective
subsidiaries and affiliated companies; (b) any scientific or technical
information, design, process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its confidentiality affords
the Fund or BNY a competitive advantage over its competitors; (c) all
confidential or proprietary concepts, documentation, reports, data,
specifications, computer software, source code, object code, flow charts,
databases, inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential. Notwithstanding the
foregoing, information shall not be Confidential Information and shall not be
subject to such confidentiality obligations if: (a) it is necessary for BNY to
release such information in connection with the provision of services under this
Agreement; (b) it is already known to the receiving party at the time it is
obtained; (c) it is or becomes publicly known or available through no wrongful
act of the receiving party; (d) it is rightfully received from a third party
who, to the best of the receiving party's knowledge, is not under a duty of
confidentiality; (e) it is released by the protected party to a third party
without restriction; (f) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or regulatory
agency request or law (provided the receiving party will provide the other party
written notice of the same, to the extent such notice is permitted); (g) it is
relevant to the defense of any claim or cause of action asserted against the
receiving party; (h) it has been or is independently developed or obtained by
the receiving party; or (i) it is necessary for BNY to release such information
to BNY's internal or external accountants or legal counsel who are subject to a
duty of confidentiality. BNY acknowledges and agrees that in connection with its
services under this Agreement it receives non-public confidential portfolio
holdings information ("Portfolio Information") with respect to the Fund. BNY
agrees that, subject to the foregoing provisions of and the exceptions set forth
in this Section 8 (other than the exception set forth above in this Section 8 as
sub-item (a), which exception set forth in sub-item (a) shall not be applicable
to the Fund's Portfolio Information), BNY will keep confidential the Fund's
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Portfolio Information and will not disclose the Fund's Portfolio Information
other than pursuant to a written instruction from the Fund; provided that
without the need for such a written instruction and notwithstanding any other
provision of this Section 8 to the contrary, the Fund's Portfolio Information
may be disclosed to third party pricing services which are engaged by BNY in
connection with the provision of services under this Agreement and which shall
be subject to a duty of confidentiality with respect to such Portfolio
Information.
9. Regulation S-P. BNY agrees to make reasonable efforts to adhere to
the Fund's policy regarding the use of Fund shareholder and potential
shareholder information as required by Regulation S-P. BNY shall be free to
share information regarding Fund shareholders and potential Fund shareholders,
on an as needed basis in order to fulfill its role as administrator, with other
authorized agents of the Fund including service providers and brokers. BNY shall
also be free to provide such information to its internal and external auditors,
counsel and accountants, its regulators and examiners, and to any other person
when advised by its counsel that it could be liable for failure to provide such
information.
10. Compensation. For the services provided hereunder, the Fund agrees
to pay BNY such compensation as is mutually agreed from time to time and such
out-of-pocket expenses (e.g., telecommunication charges, postage and delivery
charges, record retention costs, reproduction charges and transportation and
lodging costs) as are incurred by BNY in performing its duties hereunder. Except
as hereinafter set forth, compensation shall be calculated and accrued daily and
paid monthly. The Fund authorizes BNY to debit the Fund's custody account for
all amounts due and payable hereunder. BNY shall deliver to the Fund invoices
for services rendered after debiting the Fund's custody account with an
indication that payment has been made. Upon termination of this Agreement before
the end of any month, the compensation for such part of a month shall be
prorated according to the proportion which such period bears to the full monthly
period and shall be payable upon the effective date of termination of this
Agreement. For the purpose of determining compensation payable to BNY, the
Fund's net asset value shall be computed at the times and in the manner
specified in the Fund's Prospectus.
10. Term of Agreement. (a) This Agreement shall continue until
terminated by either BNY giving to the Fund, or the Fund giving to BNY, a notice
in writing specifying the date of such termination, which date shall be not less
than 90 days after the date of the giving of such notice. Upon termination
hereof, the Fund shall pay to BNY such compensation as may be due as of the date
of such termination, and shall reimburse BNY for any disbursements and expenses
made or incurred by BNY and payable or reimbursable hereunder.
(b) Notwithstanding the foregoing, BNY may terminate this Agreement
upon 30 days prior written notice to the Fund if the Fund shall terminate its
custody agreement with The Bank of New York, or fail to perform its obligations
hereunder in a material respect.
11. Authorized Persons. Attached hereto as Exhibit B is a list of
persons duly authorized by the Trustees of the Fund to execute this Agreement
and give any written or oral instructions, or written or oral specifications, by
or on behalf of the Fund. From time to time the Fund may deliver a new Exhibit B
to add or delete any person and BNY shall be entitled to rely on the last
Exhibit B actually received by BNY.
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12. Amendment. This Agreement may not be amended or modified in any
manner except by a written agreement executed by BNY and the Fund, and
authorized or approved by the Fund's Trustees.
13. Assignment. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by the Fund without the
written consent of BNY, or by BNY without the written consent of the Fund
accompanied by the authorization or approval of the Fund's Trustees.
14. Governing Law; Consent to Jurisdiction. This Agreement shall be
construed in accordance with the laws of the State of New York, without regard
to conflict of laws principles thereof. The Fund hereby consents to the
jurisdiction of a state or federal court situated in New York City, New York in
connection with any dispute arising hereunder, and waives to the fullest extent
permitted by law its right to a trial by jury. To the extent that in any
jurisdiction the Fund may now or hereafter be entitled to claim, for itself or
its assets, immunity from suit, execution, attachment (before or after judgment)
or other legal process, the Fund irrevocably agrees not to claim, and it hereby
waives, such immunity.
15. Severability. In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or obligations
shall not in any way be affected or impaired thereby, and if any provision is
inapplicable to any person or circumstances, it shall nevertheless remain
applicable to all other persons and circumstances.
16. No Waiver. Each and every right granted to BNY hereunder or under
any other document delivered hereunder or in connection herewith, or allowed it
by law or equity, shall be cumulative and may be exercised from time to time. No
failure on the part of BNY to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial exercise by BNY
of any right preclude any other or future exercise thereof or the exercise of
any other right.
17. Limitations of Liability of the Trustees and Shareholders. It is
expressly acknowledged and agreed that the obligations of the Fund hereunder
shall not be binding upon any of the shareholders, Trustees, officers, employees
or agents of the Fund, personally, but shall bind only the trust property of the
Fund, as provided in its Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Fund and signed by an
officer of the Fund, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of the Fund as provided in
its Declaration of Trust.
18. Notices. Each notice, request, demand, approval or other
communication which may be or is required to be given under this Agreement shall
be in writing in English and shall be deemed to have been properly given when
delivered personally at the address set forth below for the intended party
during normal business hours at such address, when sent by facsimile
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transmission to the respective facsimile transmission numbers of the parties set
forth below, or when sent by recognized overnight courier service or by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Fund: First Trust Exchange-Traded Fund
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: 000-000-0000
Confirm: 000-000-0000
If to BNY: The Bank of New York
000 Xxxxxxx Xxxxxx, 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
Confirm: 000-000-0000
Notices shall be given to such other addressee or address, or both, or by way of
such other facsimile transmission number, as a particular party may from time to
time designate by written notice to the other parties hereto given in accordance
with this Section. Each notice, request, demand, approval or other communication
which is sent in accordance with this Section shall be deemed given and received
for all purposes of this Agreement as of three business days after the date of
deposit thereof for mailing in a duly constituted United States post office or
branch thereof, one business day after deposit with a recognized overnight
courier service or upon confirmation of receipt of any facsimile transmission.
Notice given to a party hereto by any other method shall only be deemed to be
given and received when actually received in writing by such party.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts together shall constitute only one instrument.
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their seals to
be hereunto affixed, all as of the day and year first above written.
FIRST TRUST EXCHANGE-TRADED FUND
By ______________________________________
Title:________________________________
THE BANK OF NEW YORK
By ______________________________________
Title:________________________________
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EXHIBIT A
FIRST TRUST DOW XXXXX SELECT MICROCAP INDEX(SM) FUND
EXHIBIT B
I, W. Xxxxx Xxxxxxx, General Counsel of First Trust Advisors L.P. and
Secretary of First Trust Exchange-Traded Fund, a Massachusetts business trust
(the "Fund"), do hereby certify that:
The following individuals serve in the following positions with the
First Trust Advisors L.P., and each has been duly authorized by the Board of
Trustees of the Fund to give written or oral instructions or written or oral
specifications by or on behalf of the Fund to BNY and the signatures set forth
opposite their respective names are their true and correct signatures.
NAME POSITION SIGNATURE
MANAGING DIRECTOR AND CHIEF
XXXX XXXXXXX FINANCIAL OFFICER ______________________
XXXXXX XXXXXXXXXXX ASSISTANT VICE PRESIDENT ______________________
XXX XXXXX VICE PRESIDENT ______________________
XXXXX XXXXXX ASSOCIATE ______________________
XXXXX XXXXXXX GENERAL COUNSEL ______________________
XXX XXXXXXXX SENIOR VICE PRESIDENT ______________________
XXXXXX XXXXX ASSISTANT GENERAL COUNSEL ______________________
XXX XXXXXXXXXX SENIOR VICE PRESIDENT ______________________
XXXXX XXXXXX SENIOR VICE PRESIDENT ______________________
XXXX XXXXXX ASSOCIATE ______________________
XXXX XXXXXX ASSOCIATE ______________________
SCHEDULE I
ADMINISTRATIVE SERVICES
1. Oversee the maintenance by the Fund's custodian of certain books
and records of the Fund as required under Rule 31a-1(b) of the 1940 Act.
2. Establish appropriate expense accruals, maintain expense files and
coordinate the payment of invoices.
3. Prepare for review and approval by the Treasurer for the Fund, its
counsel and its independent accountants financial information for the Fund's
semi-annual and annual reports, proxy statements and other communications
required or otherwise to be sent to Fund shareholders or Securities and Exchange
Commission ("SEC") and arrange for the printing and dissemination of such
reports and communications to record and beneficial shareholders through The
Depository Trust Company.
4. Prepare federal, state and local income tax returns for each Fund
and Series and file such returns upon the approval of the Fund's respective
independent accountants; monitor and report on Sub-Chapter M qualifications;
prepare and file all Form 1099s with respect to each Fund's directors or
trustees; monitor compliance with Section 4982 of the Internal Revenue Code;
calculate and maintain records pertaining to Original Issue Discount and premium
amortization as required; perform ongoing wash sales review (i.e., purchases and
sales of Fund investments within 30 days of each other). Prepare and maintain
tax lot schedules for each security purchased by the Fund.
5. Prepare and, subject to approval of each Fund's Treasurer,
disseminate to such Fund's Board quarterly unaudited financial statements and
schedules of such Fund's investments and make presentations to the Board, as
appropriate.
6. Prepare for review and approval by the Treasurer and Chief
Executive Officer of the Fund, its counsel and its independent accountants the
Fund's periodic financial reports required to be filed with the SEC on Form
N-SAR, Form N-Q, Form N-CSR and financial information required by Form N-1A and
such other reports, forms or filings as may be mutually agreed upon.
7. Prepare recommendations as to each Fund's income and capital gains
available for distribution; calculate such distributions for each Fund in
accordance with applicable regulations and the distribution for each Fund in
accordance with applicable regulations and the distribution policies set forth
in the Fund's registration statement, and assist Fund management in making final
determination of distribution amounts.
8. Oversee and review calculation of fees paid to the Fund's
investment adviser, custodian and Transfer Agent.
9. Respond to, or refer to the Fund's officers or the Distributor or
the Transfer Agent, shareholder inquiries relating to the Fund.
10. Provide testing on a weekly basis, to portfolios to assist the
Fund's investment adviser in complying with Internal Revenue Code mandatory
qualification requirements, the requirements of the 1940 Act and Fund Prospectus
and Statement of Additional Information limitations as may be mutually agreed
upon.
11. Review and provide assistance on shareholder communications.
12. Prepare for review and approval by the Treasurer of the Fund, its
counsel and its independent accountants and file annual and semi-annual
shareholder reports with the appropriate regulatory agencies; review text of
"President's letters" to shareholders and "Management's Discussion of Fund
Performance" (which shall also be subject to review by the Fund's legal
counsel).
13. Organize, attend and prepare minutes of shareholder meetings.
14. Counsel and assist the Fund in the handling of routine regulatory
examinations and work closely with the Fund's legal counsel in response to any
non-routine regulatory matters.
15. Prepare for review and approval by the Treasurer for the Fund, its
counsel and its independent accountants and file with the SEC amendments to the
Fund's registration statement, including updating the Prospectus and Statement
of Additional Information, where applicable.
16. Prepare for review and approval by the Treasurer for the Fund, its
counsel and its independent accountants and file with the SEC proxy statements
and proxy cards; provide consultation on proxy solicitation matters.
17. Prepare agenda and board materials for Board meetings, make
presentations where appropriate, prepare minutes and follow-up on matters raised
at Board meetings and maintain minute books.
18. Prepare and file with the SEC Rule 24f-2 notices.
19. Prepare statistical reports for outside information services (e.g.,
IBC/Xxxxxxxx, ICI, Lipper Analytical and Morningstar).
20. Blue Sky Services
o Subject to approval of each Fund's Board and its legal counsel,
perform initial registration for Funds or Series in such states as
each Fund shall identify to the Administrator.
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o Subject to approval of each Fund's Board and its legal counsel,
perform renewal registration for Funds or Series in such states as
each Fund shall identify to the Administrator.
o Receive nightly downloads of sales data from transfer agents.
o Update state/territory sales information for each Fund or Series.
o Create and maintain state/territory sales information worksheets
for each Fund or Series.
o Monitor changes in Blue Sky laws and procedures for all registered
states/territories.
o Subject to approval of each Fund's legal counsel, update filing
requirements for all law and procedural changes.
o Communicate directly with regulatory authorities in
states/territories as needed.
o Periodically attend Investment Company Institute (ICI) State
Liaison Committee meetings.
21. Prepare and execute periodic certifications and sub-certifications,
in a form agreed to by the Fund and BNY, with respect to Form N-Qs, Form N-CSRs,
compliance policies and procedures under Rule 38a-1 of the Investment Company
Act of 1940, as amended ("Rule 38a-1"), and such other matters that may be
reasonably requested by the Fund or the Fund's Chief Compliance Officer from
time to time.
22. Periodically provide a written assessment of BNY's Rule 38a-1
compliance program to the Fund in conformity with current industry standards
that is reasonably acceptable to the Fund.
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SCHEDULE II
VALUATION AND COMPUTATION SERVICES
I. BNY shall maintain the following records on a daily basis for each
Series.
1. Report of priced portfolio securities
2. Statement of net asset value per share
II. BNY shall prepare on behalf of the Fund all books and records of
the Fund as required by Rule 31a-1 under the 1940 Act, and as such rule or any
successor rule, may be amended from time to time, that are applicable to the
fulfillment of BNY's duties hereunder, as well as any other documents necessary
or advisable for compliance with applicable regulation as may be mutually agreed
to between the Fund and BNY. Without limiting the generality of the foregoing,
BNY will prepare and maintain the following records upon receipt of information
in proper form from the Fund or its authorized agents for each Series:
1. General Ledger
2. General Journal
3. Cash Receipts Journal
4. Cash Disbursements Journal
5. Subscriptions Journal
6. Redemptions Journal
7. Accounts Receivable Reports
8. Accounts Payable Reports
9. Open Subscriptions/Redemption Reports
10. Transaction (Securities) Journal
11. Broker Net Trades Reports
III. BNY shall prepare a Holdings Ledger on a quarterly basis, and a
Buy-Sell Ledger (Broker's Ledger) on a semiannual basis for each Series.
Schedule D shall be produced on an annual basis for each Series.
The above reports may be printed according to any other required
frequency to meet the requirements of the Internal Revenue Service, the
Securities and Exchange Commission and the Fund's Auditors.
IV. For internal control purposes, BNY uses the Account Journals
produced by The Bank of New York Custody System to record daily settlements of
the following for each Series:
1. Securities bought
2. Securities sold
3. Interest received
4. Dividends received
5. Capital stock sold
6. Capital stock redeemed
7. Other income and expenses
All portfolio purchases for the Fund are recorded to reflect expected
maturity value and total cost including any prepaid interest.
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