FIRST DEFINED PORTFOLIO MANAGEMENT FUND LLC, N-1A/A, 1999-09-30

FIRST DEFINED PORTFOLIO MANAGEMENT FUND LLC
N-1A/A, 1999-09-30

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As filed with the Securities and Exchange Commission on September 30, 1999

1933 Act Registration No. 333-72447
1940 Act Registration No. 811-09235

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]

Pre-Effective Amendment No. 2 [X]
Post-Effective Amendment No. _____ [ ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 2 [X]

FIRST DEFINED PORTFOLIO FUND, LLC
(Exact Name of Registrant as Specified in Charter)

1001 Warrenville Road, Suite 300, Lisle, Illinois 60532
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (630) 241-4141

with a copy to:

W. Scott Jardine, Esq. Eric F. Fess
Nike Securities L.P. Chapman and Cutler
1001 Warrenville Road, Suite 300 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
(Name and Address of Agent for Service)

Approximate date of proposed public offering: October 4, 1999

It is proposed that this filing will become effective (check appropriate
box)

[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ]This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Securities Being Registered: Membership interests

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.

CONTENTS OF PRE-EFFECTIVE AMENDMENT NO. 2
TO THE REGISTRATION STATEMENT

This Registration Statement comprises the following papers and contents:

The Facing Sheet
Part A-Prospectus
Part B-Statement of Additional Information
Part C-Other Information
Signatures
Index to Exhibits
Exhibits

FIRST DEFINED PORTFOLIO FUND, LLC

October 1, 1999

Prospectus

This prospectus is intended for use in connection with variable annuity
policies offered by American Skandia Life Assurance Corporation
("American Skandia"). This prospectus provides important information to
help you evaluate whether one of the funds listed below may be right for
you.

The Dow(SM) Target 5 Portfolio
The Dow(SM) DART 10 Portfolio
Global Target 15 Portfolio
S&P Target 10 Portfolio
NASDAQ Target 15 Portfolio
First Trust 10 Uncommon Values Portfolio
First Trust Energy Portfolio
First Trust Financial Services Portfolio
First Trust Internet Portfolio
First Trust Pharmaceutical Portfolio
First Trust Technology Portfolio

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation
to the contrary is a criminal offense.

Page 1

TABLE OF CONTENTS

PAGE

THE DOW(SM) TARGET 5 PORTFOLIO 3
Fund Overview 3
THE DOW(SM) DART 10 PORTFOLIO 4
Fund Overview 4
GLOBAL TARGET 15 PORTFOLIO 5
Fund Overview 5
S&P TARGET 10 PORTFOLIO 6
Fund Overview 6
NASDAQ TARGET 15 PORTFOLIO 7
Fund Overview 7
FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO 9
Fund Overview 9
FIRST TRUST ENERGY PORTFOLIO 10
Fund Overview 10
FIRST TRUST FINANCIAL SERVICES PORTFOLIO 11
Fund Overview 11
FIRST TRUST INTERNET PORTFOLIO 12
Fund Overview 12
FIRST TRUST PHARMACEUTICAL PORTFOLIO 13
Fund Overview 13
FIRST TRUST TECHNOLOGY PORTFOLIO 14
Fund Overview 14
FUND ORGANIZATION 15
FUND MANAGEMENT 15
MANAGEMENT FEES AND EXPENSES 16
FUND INVESTMENTS 16
HOW SECURITIES ARE SELECTED 16
DESCRIPTION OF INDICES 18
RISK FACTORS 18
INVESTMENT IN FUND INTERESTS 20
INTEREST REDEMPTION 20
DISTRIBUTIONS AND TAXES 21
12B-1 PLAN 21
NET ASSET VALUE 21
FUND SERVICE PROVIDERS 22
SHAREHOLDER INQUIRIES 22

Page 2

THE DOW(SM) TARGET 5 PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average total return.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing in common stocks
issued by companies that are expected to provide income and to have the
potential for capital appreciation. To select the stocks for the fund,
the investment adviser follows a disciplined investment strategy that
invests primarily in the common stocks of the five companies with the
lowest per share stock prices of the ten companies in the Dow Jones
Industrial AverageSM ("DJIA") that have the highest dividend yields as
of the close of business on or about the applicable stock selection
date. The initial portfolio will primarily consists of the stocks
selected by the strategy on or about September 30, 1999. Beginning
December 31, 1999, the portfolio will be adjusted annually on or about
December 31 in accordance with the investment strategy. See "Description
of Indices" for a description of the DJIA.

Each year, on or about the annual stock selection date (December 31),
the fund expects to invest in the securities determined by the strategy
in relatively equal amounts. At that time, the percentage relationship
among the numbers of shares of each issuer held by the fund is
established. Through the next one-year period that percentage
relationship will be maintained as closely as practicable when the fund
makes subsequent purchases and sales of the securities.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. As with any mutual fund investment,
loss of money is a risk of investing. In addition, an investment in the
fund is not a deposit of a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation ("FDIC") or any other government
agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of investing in accordance with an investment
strategy. As a result of this policy, securities held by the fund will
generally not be bought or sold in response to market fluctuations. The
fund's relative lack of diversity and limited management may subject
investors to greater market risk than other mutual funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 3

THE DOW(SM) DART 10 PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average total return.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing in common stocks
issued by companies that are expected to provide income and to have the
potential for capital appreciation. To select the stocks for the fund,
the investment adviser follows a disciplined investment strategy that
invests primarily in the common stocks of the ten companies in the DJIA
that have the highest combined dividend yields and buyback ratios as of
the close of business on or about the applicable stock selection date.
Buyback ratio is determined by subtracting one from the ratio of the
company's common shares outstanding 12 months prior to the applicable
stock selection date divided by the common shares outstanding on or
about the applicable stock selection date. The initial portfolio will
primarily consist of the stocks selected by the strategy on or about
September 30, 1999. Beginning December 31, 1999, the portfolio will be
adjusted annually on or about December 31 in accordance with the
investment strategy. See "Description of Indices" for a description of
the DJIA.

The fund invests in stocks with relatively high dividend yields and
relatively high buyback ratios. Investing in stocks with high dividend
yields and buyback ratios may be effective in achieving the fund's
investment objective. This is because regular dividends are common for
established companies and have typically accounted for a large portion
of the total return on stocks. Historically, companies rewarded
shareholders in the form of dividend payments. By selecting the DJIA
stocks with the highest dividend yields, the fund seeks to uncover
stocks that may be out of favor or undervalued. More recently, many
companies have turned to stock reduction programs as a tax efficient way
to bolster their stock prices and reward shareholders. Companies which
have reduced their shares through a share buyback program may provide a
strong cash flow position and, in turn, high quality earnings.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

Fund Performance

The fund is newly created and does not have any performance history.

Page 4

GLOBAL TARGET 15 PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average total return.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing in common stocks
issued by companies that are expected to provide income and to have the
potential for capital appreciation. To select the stocks for the fund,
the investment adviser follows a disciplined investment strategy that
invests primarily in the common stocks of the companies which are
components of the DJIA, the Financial Times Industrial Ordinary Share
Index ("FT Index") and the Hang Seng Index. The fund consists of common
stocks of the five companies with the lowest per share stock price of
the ten companies in each of the DJIA, FT Index and Hang Seng Index,
respectively, that have the highest dividend yield in the respective
index as of the close of business on or about the applicable stock
selection date. The initial portfolio will primarily consist of the
stocks selected by the strategy on or about September 30, 1999.
Beginning December 31, 1999, the portfolio will be adjusted annually on
or about December 31 in accordance with the investment strategy. See
"Description of Indices" for a description of the DJIA, FT Index and
Hang Seng Index.

The fund may also invest in futures, options, war-rants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's investment in foreign
stock presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Fund Performance

The fund is newly created and does not have any performance history.

Page 5

S&P TARGET 10 PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average total return.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing in common stocks
issued by companies that have the potential for capital appreciation. To
select the stocks for the fund, the investment adviser follows a
disciplined investment strategy that invests primarily in the common
stocks of the ten companies selected from a subset of the stocks
included in the Standard & Poor's 500 Composite Stock Price Index ("S&P
500 Index") as of the close of business on or about the applicable stock
selection date. See "Description of Indices" for a description of the
S&P 500 Index.

The fund primarily consists of a portfolio of 10 common stocks selected
each year through the following three-step process from a subset of the
stocks listed on the S&P 500 Index as of close of business on or about
the applicable stock selection date. The first step begins by selecting
the 250 largest companies based on market capitalization in the S&P 500
Index. From the 250 companies identified in the first step, the second
step selects the 125 companies with the lowest price to sales ratios.
Finally, of the remaining companies, the 10 companies which had the
greatest 1-year stock price appreciation are selected for the fund. The
initial portfolio will primarily consist of the stocks selected by the
strategy on or about September 30, 1999. Beginning December 31, 1999,
the portfolio will be adjusted annually on or about December 31 in
accordance with the investment strategy.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

Fund Performance

The fund is newly created and does not have any performance history.

"Standard & Poor's", "S&P" "S&P 500", "Standard & Poor's 500" and "500" are
trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use
by First Trust on behalf of the Fund. The Fund is not sponsored, endorsed,
managed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no
representation regarding the advisability of investing in the Fund. Please see
the Statement of Additional Information which sets forth certain additional
disclaimers and limitations on behalf of S&P.

Page 6

NASDAQ TARGET 15 PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average total return.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing in common stocks
issued by companies that are expected to have the potential for capital
appreciation. To select the stocks for the fund, the investment adviser
follows a disciplined investment strategy that invests primarily in the
common stocks of fifteen companies selected from a subset of the stocks
included in the Nasdaq-100 Index as of the close of business on or about
the applicable stock selection date. See "Description of Indices" for a
description of the Nasdaq-100 Index.

The fund primarily consists of a portfolio of fifteen common stocks
selected each year through the following multi-step process from a
subset of the stocks listed on the Nasdaq-100 Index as of the close of
business on or about the applicable stock selection. The first step
begins by removing all known buyout candidates from the securities in
the index. The second step ranks each security by price appreciation
over the prior twelve-month period. The third step ranks the same
securities by price appreciation over the prior six-month period. The
combined effect of the second and third step is to select stocks which
have shown consistent growth over the past year. The fourth step
numerically ranks the stocks by return on assets ratio. The fifth step
numerically ranks each security by their ratio of cash flow per share to
price. This is a common indication of value. After ranking each of the
securities in each of the second through fifth criteria, the resulting
four rankings are added up for each security. Those fifteen securities
with the lowest sums are selected for the portfolio. The initial
portfolio will primarily consist of the stocks selected by the strategy
on or about September 30, 1999. Beginning December 31, 1999, the
portfolio will be adjusted annually on or about January 1 in accordance
with the investment strategy.

Each year, on or about the stock selection date (December 31), the fund
expects to invest in the securities determined by the strategy. These
securities will be weighted by market capitalization subject to the
restriction that no stock will comprise less than 1% or more than 25% of
the portfolio as of the stock selection date. At that time, the
percentage relationship among the numbers of shares of each issuer held
by the fund is established. Through the next one-year period that
percentage relationship will be maintained as closely as practicable
when the fund makes subsequent purchases and sales of the securities.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Fund Performance

The fund is newly created and does not have any performance history.

"The Nasdaq 100(R)", "Nasdaq-100 Index(R)", "Nasdaq Stock Market(R)" and
"Nasdaq(R)" are trade or service marks of The Nasdaq Stock Market, Inc.
(which with its affiliates are the "Corporations") and have been licensed
for use by First Trust. The Fund has not been passed on by the Corporations
as to its legality or suitability. The Fund is not issued, endorsed,
sponsored, managed, sold or promoted by the Corporations. THE CORPORATIONS
MAKE NO WARRANTIES AND BEAR NOT LIABILITY WITH RESPECT TO THE FUND.

Page 7

FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in the
ten common stocks selected by the Investment Policy Committee of Lehman
Brothers Inc. ("Lehman Brothers") with the assistance of the Research
Department of Lehman Brothers which, in the opinion of Lehman Brothers,
have the greatest potential for capital appreciation during the next
year. The stocks included in the fund are adjusted annually on or about
July 1, 1999 in accordance with the selections of Lehman Brothers.

Each year, on or about the annual stock selection date (July 1), the
fund expects to invest in the securities determined by Lehman Brothers
in relatively equal amounts. At that time, the percentage relationship
among the numbers of shares of each issuer held by the fund is
established. Through the next one-year period that percentage
relationship will be maintained as closely as practicable when the fund
makes subsequent purchases and sales of the securities.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Fund Performance

The fund is newly created and does not have any performance history.

The Fund is not sponsored or created by Lehman Brothers, Inc. ("Lehman
Brothers"). Lehman Brothers' only relationship to First Trust is the
licensing of certain trademarks and trade names of Lehman Brothers and of
the "10 Uncommon Values" which is determined, composed and calculated by
Lehman Brothers without regard to First Trust or the Fund.

Page 8

FIRST TRUST ENERGY PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in common
stocks issued by companies involved in the energy industry. The fund may
hold securities of issuers in many energy sectors including, among
others, integrated oil, oil field services and equipment, oil and gas
production, and natural gas. The companies selected for the fund are
researched and evaluated using database screening techniques,
fundamental analysis and the judgment of the investment adviser's
research analysts. The investment adviser seeks companies that it
believes have above-average growth prospects.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of concentrating in securities of energy companies.
The fund's relative lack of diversity may subject investors to greater
market risk than other mutual funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 9

FIRST TRUST FINANCIAL SERVICES PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in common
stocks issued by companies involved in the financial services industry,
including, among others, money center banks, major regional banks,
financial and investment service providers and insurance companies. The
companies selected for the fund are researched and evaluated using
database screening techniques, fundamental analysis and the judgment of
the investment adviser's research analysts. The investment adviser
seeks companies that it believes have above-average growth prospects.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of concentrating in securities of financial services
companies. The fund's relative lack of diversity may subject investors
to greater market risk than other mutual funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 10

FIRST TRUST INTERNET PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in common
stocks issued by companies involved in the internet industry. The
companies selected for the fund are researched and evaluated using
database screening techniques, fundamental analysis and the judgment of
the investment adviser's research analysts. The investment adviser seeks
companies that it believes have above-average growth prospects.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of concentrating in securities of issues in the
internet industry. The fund's relative lack of diversity may subject
investors to greater market risk than other mutual funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 11

FIRST TRUST PHARMACEUTICAL PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in common
stocks issued by pharmaceutical companies. The companies selected for
the fund are researched and evaluated using database screening
techniques, fundamental analysis, and the judgment of the investment
adviser's research analysts. The investment adviser seeks companies
that it believes have above-average growth prospects.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of concentrating in securities of companies in the
pharmaceutical and health care industries. The fund's relative lack of
diversity may subject investors to greater market risk than other mutual
funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 12

FIRST TRUST TECHNOLOGY PORTFOLIO

Fund Overview

Investment Objective

The fund seeks to provide above-average capital appreciation.

How the Fund Pursues its Objective

The fund seeks to achieve its objective by investing primarily in common
stocks issued by companies involved in the technology industry
including, among others, companies that offer computers, computer
networking, software, semiconductor equipment and semiconductors. The
companies selected for the fund are researched and evaluated using
database screening techniques, fundamental analysis, and the judgment of
the investment adviser's research analysts. The investment adviser seeks
companies that it considers to have above-average growth prospects.

The fund may also invest in futures, options, warrants, forward
contracts and repurchase agreements.

What are the Risks of Investing in the Fund?

The principal risk of investing in the fund is market risk. Market risk
is the risk that a particular stock in the fund, the fund itself or
stocks in general may fall in value. The fund's potential investment in
foreign stocks presents additional risk including currency risk. Foreign
companies may be affected by adverse political, diplomatic and economic
developments, changes in foreign currency exchange rates, taxes, less
publicly available information and other factors. As with any mutual
fund investment, loss of money is a risk of investing. In addition, an
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the FDIC or any other government agency.

Because the fund is non-diversified, the fund is exposed to additional
market risk. A non-diversified fund may invest a relatively high
percentage of its assets in a limited number of issuers. Non-diversified
funds are more susceptible to any single political, regulatory or
economic occurrence and to the financial condition of individual issuers
in which it invests. The fund is also exposed to additional market risk
due to its policy of concentrating in securities of issues in the
technology industry. The fund's relative lack of diversity may subject
investors to greater market risk than other mutual funds.

Fund Performance

The fund is newly created and does not have any performance history.

Page 13

Fund Organization

Each fund is a series of the First Defined Portfolio Fund, LLC (the
"Registrant"), a non-diversified open-end management investment company
registered under the Investment Company Act of 1940. Each fund
constitutes a separate mutual fund with its own investment objective and
policies. The Registrant is organized as a Delaware limited liability
company. Its Board of Trustees is responsible for its overall management
and direction. The Board elects the Registrant's officers and approves
all significant agreements including those with the investment adviser,
custodian and fund administrative and accounting agent. Board members
are elected by owners of the Registrant's membership interests (the
"interests").

Under Delaware law, a limited liability company does not issue shares of
stock. Instead, ownership rights are contained in "membership
interests". Each interest of a fund represents an undivided interest in
the securities held in the fund's portfolio. The funds are not offered
directly to the public. Interests of the funds are sold only to American
Skandia Life Assurance Corporation Variable Account B ("Account B") to
fund the benefits of variable annuity policies (the "Policies") issued
by American Skandia. Account B is the sole member of the Registrant.
Account B's variable annuity owners who have Policy values allocated to
any of the funds have indirect rights in the Registrant's interests. The
funds may be divided into two general categories: Strategy Funds and
Sector Funds.

Strategy Funds

The Strategy Funds are: The DowSM Target 5 Portfolio, The DowSM DART 10
Portfolio, Global Target 15 Portfolio, S&P Target 10 Portfolio, NASDAQ
Target 15 Portfolio and First Trust 10 Uncommon Values Portfolio. The
Strategy Funds seek their investment objectives by investing their
assets primarily in accordance with a particular investment strategy.
The Strategy Funds portfolios are generally adjusted annually to reflect
the strategies most recent selections. (See "Fund Overview" for each
fund for a description of the investment strategies).

Sector Funds

The Sector Funds are: First Trust Energy Portfolio, First Trust
Financial Services Portfolio, First Trust Internet Portfolio, First
Trust Pharmaceutical Portfolio and First Trust Technology Portfolio. The
Sector Funds invest primarily in the common stocks of companies that
represent each funds' specific sector or industry.

Fund Management

The overall management of the business and affairs of the funds is the
responsibility of the Board of Trustees of the funds.

First Trust Advisors L.P. ("First Trust"), 1001 Warrenville Road, Lisle,
Illinois, 60532, is the investment adviser to the funds. In this
capacity, First Trust is responsible for the selection and ongoing
monitoring of the securities in the funds' portfolios, managing the
funds' business affairs and providing certain clerical, bookkeeping and
other administrative services.

First Trust is a limited partnership with one limited partner, Grace
Partners of Dupage L.P., and one general partner, Nike Securities
Corporation. Grace Partners of Dupage L.P. is a limited partnership with
one general partner, Nike Securities Corporation, and a number of
limited partners. Nike Securities Corporation is an Illinois corporation
controlled by Robert Donald Van Kampen. First Trust discharges its
responsibilities subject to the policies of the Board of Trustees of the
funds.

First Trust serves as subadvisor for 27 mutual funds and is also the
portfolio supervisor of unit investment trusts sponsored by Nike
Securities L.P. ("Nike Securities"), some of which are substantially
similar to the funds. Nike Securities, 1001 Warrenville Road, Lisle,
Illinois 60532, specializes in the underwriting, trading and
distribution of unit investment trusts and other securities. Nike
Securities is the sponsor and principal underwriter of the funds' shares
and has sponsored or underwritten approximately $24 billion of
investment company shares.

Page 14

There is no one individual primarily responsible for portfolio
management decisions for the funds. Investments are made under the
direction of a committee. For additional information concerning First
Trust, including a description of the services provided, see the
Statement of Additional Information.

Management Fees and Expenses

For providing management services, First Trust is paid an annual fund
management fee by each fund of 0.60% of average daily net assets.

Each fund pays for its own operating expenses such as custodial,
transfer agent, administrative, accounting and legal fees; brokerage
commissions; distribution and service fees; licensing fees (if
applicable); extraordinary expenses; and its portion of the Registrant's
operating expenses. First Trust has agreed to waive fees and reimburse
expenses through September 30, 2000 to prevent a fund's Total Annual
Fund Operating Expenses (excluding brokerage expenses and extraordinary
expenses) from exceeding 1.47% of the average daily net asset value of
such fund.

Fund Investments

Equity Securities

Each fund invests primarily in equity securities. Eligible equity
securities include common stocks; warrants to purchase common stocks;
and securities convertible into common stocks, such as convertible bonds
and debentures. In addition, each of the Sector Funds, the First Trust
10 Uncommon Values Portfolio, the Global Target 15 Portfolio and the
NASDAQ Target 15 Portfolio may invest in equity securities of foreign
issuers, including depositary receipts that represent foreign common
stocks deposited with a custodian.

Short-Term Investments

Each fund may invest in cash equivalents or other short-term investments
including U.S. government securities, commercial paper, repurchase
agreements, money-market funds or similar fixed-income securities with
remaining maturities of one year or less. For more information on short-
term investments, see the Statement of Additional Information.

Futures and Options

Each fund may invest in various investment strategies designed to hedge
against changes in the values of securities the fund owns or expects to
purchase or to hedge against interest rate or currency exchange rate
changes. The securities used to implement these strategies include
financial futures contracts, options, forward contracts, options on
financial futures and stock index options.

Delayed Delivery Securities

Each fund may buy or sell securities on a when-issued or delayed-
delivery basis, paying for or taking delivery of the securities at a
later date, normally within 15 to 45 days of the trade. Such
transactions involve an element of risk because the value of the
securities to be purchased may decline before the settlement date.

How Securities Are Selected

Strategy Funds

To select securities for the Strategy Funds, First Trust primarily
follows a disciplined investment strategy that invests in the common
stocks determined by the strategy. Beginning December 31, 1999, the
portfolio of each Strategy Fund is adjusted annually on or about the
funds' annual stock selection date of December 31 (other than the First
Trust 10 Uncommon Values Portfolio which is adjusted on or about each
July 1), in accordance with the applicable investment strategy. On the
annual stock selection date for a fund, a percentage relationship among
the number of securities in the fund will be established. When
additional assets are deposited into the fund, additional securities
will be purchased in such numbers that reflect as nearly as practicable
the percentage relationship of the number of securities established on

Page 15

the annual stock selection date. First Trust will likewise attempt to
replicate the percentage relationship of securities when selling
securities for a fund. The percentage relationship among the number of
securities in a fund should therefore remain relatively stable. However,
given the fact that the market price of such securities will vary
throughout the year, the value of the securities of each of the
companies as compared to the total assets of a fund will fluctuate
during the year, above and below the proportion established on the
annual stock selection date. At the annual stock selection date for a
fund, new securities will be selected and a new percentage relationship
will be established among the number of securities for the fund.

It is generally not possible for First Trust to purchase round lots
(usually 100 shares) of stocks in amounts that will precisely duplicate
the prescribed mix of securities. Also, it usually is impossible for a
fund to be 100% invested in the prescribed mix of securities at any
time. To the extent that a fund is not fully invested, the interests of
variable annuity Policy owners may be diluted and total return may not
directly track the investment results of the prescribed mix of
securities. To minimize this effect, First Trust will generally try, as
much as practicable, to maintain a minimum cash position at all times.
Normally, the only cash items held by a fund are amounts expected to be
deducted as expenses, amounts too small to purchase additional round
lots of the securities and amounts held during the settlement of
portfolio transactions.

Sector Funds

The companies selected for the Sector Funds are researched and evaluated
by First Trust by using database screening techniques, fundamental
analysis, and the judgement of their research analysts. First Trust
seeks companies that it believes have above-average growth prospectus
within the respective industry or sector.

Investment Limitations

The funds have adopted certain investment limitations (based on total
assets) that cannot be changed without interest holder approval and are
designed to limit your investment risk. Such limitations are described
in the Statement of Additional Information.

Hedging and Other Defensive and Temporary Investment Strategies

Although the Strategy Funds have no present intentions to vary from
their investment strategies under any circumstances, all of the funds
may invest up to 100% of their assets in cash equivalents and short-term
investments as a temporary defensive measure in response to adverse
market conditions, or to keep cash on hand fully invested. During these
periods, a fund may not be able to achieve its investment objective.

First Trust may also use various investment strategies designated to
hedge against changes in the value of securities a fund owns or expects
to purchase or to hedge against interest rate changes and to hedge
against currency fluctuations during the settlement of portfolio
transactions. These hedging strategies include using financial futures
contracts, options, options on financial futures, foreign currency
forward contracts or stock index options. The ability of a fund to
benefit from options and futures is largely dependent on First Trust's
ability to use such strategies successfully. A fund could lose money on
futures transactions or an option can expire worthless.

Each fund's investment objective may not be changed without interest
holder approval. The above investment policies may be changed by the
Board of Trustees without interest holder approval unless otherwise
noted in this prospectus or the Statement of Additional Information.

Portfolio Turnover

A fund buys and sells portfolio securities in the normal course of its
investment activities. The proportion of the fund's investment portfolio
that is sold and replaced with new securities during a year is known as
the fund's portfolio turnover rate. The Strategy Funds anticipate that
their annual portfolio turnover rate will generally be between 20% and
100%. The Sector Funds expect their annual portfolio turnover rate to be
between 20% and 100%. A turnover rate of 100% would occur, for example,
if a fund sold and replaced securities valued at 100% of its net assets
within one year. Active trading would result in the payment by the fund
of increased brokerage costs and could result in the payment by interest
holders of increased taxes on realized investment gains.

Page 16

Description of Indices

The portfolios of certain of the Strategy Funds consist of the common
stocks of companies listed on various indices. A description of certain
of the indices is provided below.

The Dow Jones Industrial AverageSM

The stocks included in the DJIA are chosen by the editors of The Wall
Street Journal as representative of the broad market and of American
industry. The companies are major factors in their industries and their
stocks are widely held by individuals and institutional investors.

The Financial Times Industrial Ordinary Share Index

The FT Index is comprised of 30 common stocks chosen by the editors of
The Financial Times as representative of the British industry and
commerce. This index is an unweighted average of the share prices of
selected companies. These companies are highly capitalized and major
factors in their industries. In addition, their stocks are widely held
by individuals and institutional investors.

The Hang Seng Index

The Hang Seng Index presently consists of 33 stocks currently listed on
the Stock Exchange of Hong Kong Ltd. (the "Hong Kong Stock Exchange"),
and it includes companies intended to represent four major market
sectors: commerce and industry, finance, properties and utilities. The
Hang Seng Index is a recognized indicator of stock market performance in
Hong Kong. It is computed on an arithmetic basis, weighted by market
capitalization, and is therefore strongly influenced by stocks with
large market capitalizations.

The Nasdaq-100 Index

The Nasdaq-100 Index represents the largest non-financial domestic and
international issues listed on the Nasdaq Stock Market****Times:xae****.
The index is calculated based on a modified capitalization weighted
methodology. The Nasdaq Stock Market lists nearly 5,400 companies and
trades more shares per day than any other major U.S. market.

The Standard & Poor's 500 Index

Widely regarded as the standard for measuring large-cap U.S. stock
market performance, the S&P 500 Index includes a representative sample
of leading U.S. companies in leading industries. The S&P 500 Index
consists of 500 stocks chosen for market size, liquidity and industry
group representation. It is a market-value weighted index with each
stocks' weight in the Index proportionate to its market value.

Except as described in the Prospectus or Statement of Additional
Information, the publishers of the indices have not granted the funds or
First Trust a license to use their respective index. The funds are not
designed so that prices will parallel or correlate with the movements in
any particular index or a combination of indices and it is expected that
their prices will not parallel or correlate with such movements. The
publishers of the indices have not participated in any way in the
creation of the funds or in the selection of stocks in the funds.

Risk Factors

Risk is inherent in all investing. Investing in the funds involves risk,
including the risk that you may lose all or part of your investment.
There can be no assurance that a fund will meet its stated objective.
Before you invest, you should consider the following risks.

Market risk: Market risk is the risk that a particular stock, an
industry, a mutual fund or stocks in general may fall in value.

Small-cap company risk: Certain funds may invest in small capitalization
companies. Such companies may be more vulnerable to adverse general
market or economic developments, may be less liquid and may experience

Page 17

greater price volatility than larger capitalization companies.
Accordingly, such companies are generally subject to greater market risk
than larger capitalization companies.

Inflation risk: Inflation risk is the risk that the value of assets or
income from investments will be less in the future as inflation
decreases the value of money. As inflation increases, the value of the
funds' assets can decline as can the value of the funds' distributions.

Foreign investment risk: Certain funds may invest in foreign securities.
Securities issued by foreign companies or governments present risks
beyond those of securities of U.S. issuers. Such companies may be
affected by adverse political, diplomatic, and economic developments,
changes in foreign currency exchange rates, taxes, less publicly
available information and other factors. Prices of foreign securities
also may be more volatile and they may be less liquid than U.S. stocks.

Concentration risk: Each fund is classified as "non-diversified." As a
result, each fund is only limited as to the percentage of its assets
which may be invested in the securities of any one issuer by its own
investment restrictions and by the diversification requirements imposed
by the Internal Revenue Code of 1986, as amended. Since each fund may
invest a relatively high percentage of its assets in a limited number of
issuers, each fund may be more susceptible to any single economic,
political or regulatory occurrence and to the financial conditions of
the issuers in which it invests.

In addition, the Sector Funds are considered to be concentrated in the
securities of their respective industries. This concentration also makes
the funds more susceptible to any single occurrence affecting the
industry or sector and may subject the funds to greater market risk than
more diversified funds. Particular risk factors for each sector are
provided below.

Energy Sector: Companies involved in the energy industry are subject to
changes in value and dividend yield which depend to a large extent on
the price and supply of unpredictable energy fuels and consumer demand.
Also, international politics may cause cost and supply fluctuations, and
increasing sensitivity to environmental concerns will likely pose
serious challenges to the industry over the coming decade. Energy
conservation, taxes and regulatory policies of various governments may
also affect the industry.

Financial Services Sector: Companies involved in the financial services
industry are generally subject to the adverse effects of economic
recession, volatile interest rates, portfolio concentrations in
geographic markets, commercial and residential real estate loans and
competition. In addition, such companies are subject to extensive
regulation and tax law changes. Insurance companies are also subject to
the imposition of premium rate caps, pressure to compete globally,
weather catastrophes and other disasters that require payouts and
mortality rates.

Internet Sector: Companies involved in the Internet are subject to rapid
changes in technology, worldwide competition, rapid obsolescence of
products and services, cyclical market patterns, evolving industry
standards, frequent new product introductions and the considerable risk
of owning small capitalization companies that have recently begun
operations. In addition, the stocks of many Internet companies have
exceptionally high price-to-earnings ratios with little or no earnings
histories. Many Internet companies have experienced extreme price and
volume fluctuations that often have been unrelated to their operating
performance.

Pharmaceuticals Sector: Companies involved in the pharmaceuticals and
health care industries are subject to governmental regulation of their
products and services, increasing competition, termination of patent
protection for drug products and the risk that technological advances
will render their products or services obsolete.

Technology Sector: Companies involved in the technology industry must
contend with rapidly changing technology, worldwide competition, rapid
obsolescence of products and services, cyclical market patterns,
evolving industry standards and frequent new product introductions.
Also, the stocks of many technology companies have exceptionally high
price-to-earning ratios with little or no earnings histories.

Limited management risk: The Strategy Funds are exposed to additional
market risk due to their policy of investing in accordance with an
investment strategy. As a result of this policy, securities held by a
Strategy Fund will generally not be bought or sold in response to market

Page 18

fluctuations. This policy may subject investors to greater market risk
than other mutual funds.

Year 2000 Disclosure

First Trust and the funds' service providers each rely on computer
systems to manage the funds' investments, process transactions and
provide account maintenance. Because of the way computers historically
have stored dates, some of these systems currently may not be able to
correctly process activity occurring in the year 2000. First Trust is
working with the funds' service providers to adapt their systems to
address this "Year 2000" issue. First Trust and the funds expect, but
there can be no absolute assurance, that the necessary work will be
completed on a timely basis. Any of the funds that hold foreign
securities may be exposed to additional risks as a result of the Year
2000 issue. Foreign issuers and markets may not be as prepared as their
U.S. counterparts to address the Year 2000 issue.

Investment in Fund Interests

Interests of the funds are sold only to Account B to fund the benefits
of the Policies issued by American Skandia. Account B purchases
interests of the funds in accordance with variable account allocation
instructions received from owners of the Policies. First Trust then uses
the proceeds to buy securities for the funds. Account B, as an interest
holder, has an ownership in the funds' investments.

The funds do not issue interest certificates. Individual investors may
not purchase or redeem interests in the funds directly; interests may be
purchased or redeemed only through the Policies. There are no minimum
investment requirements. All investments in a fund are credited to the
interest holder's account in the form of full and fractional interests
of the designated fund (rounded to the nearest 1/1000 of a share). For a
discussion of how Policy owners may purchase fund interests, please
refer to the prospectus for Account B. Owners of the Policies may direct
purchase or redemption instructions to American Skandia at 1 Corporate
Drive, Shelton, CT 06484-0883, 1-(800) 752-6342.

The price received for purchase requests will depend on when the order
is received. Orders received before the close of trading on a business
day will receive that day's closing price, otherwise the next business
day's price will be received. A business day is any day the New York
Stock Exchange is open for business and normally ends at 4 p.m. New York
time. See "Net Asset Value" for a discussion of how interests are priced.

Interest Redemption

Each fund offers to buy back (redeem) interests of the fund from Account
B at any time at net asset value. Account B will redeem interests to
make benefit or surrender payments under the terms of the Policies or to
effect transfers among investment options. Redemptions are processed on
any day on which the funds are open for business and are effected at the
net asset value next determined after the redemption order, in proper
form, is received. Orders received before the close of trading on a
business day will receive that day's closing price, otherwise the next
business day's price will be received. For a discussion of how Policy
owners may redeem interests, please refer to the prospectus for Account B.

A fund may suspend the right of redemption only under the following
unusual circumstances:

- - when the New York Stock Exchange is closed (other than weekends and
holidays) or trading is restricted;

- - when trading in the markets utilized is restricted, or when an
emergency exists so that disposal of the Fund's investments or
determination of its net assets is not reasonably practicable; or

- - during any period when the SEC may permit.

Page 19

Distributions and Taxes

Automatic Reinvestment

All dividends received by a fund will be reinvested into additional fund
interests.

Taxes and Tax Reporting

The Registrant is a limited liability company with all of its interests
owned by a single entity (Account B). Accordingly, the Registrant is
part of the operations of American Skandia and is not taxed separately.
The Registrant does not intend to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. Under current
tax law, interest, dividend income and capital gains of the Registrant
are not currently taxable when left to accumulate within a variable
annuity contract. For a discussion of the tax status of the variable
annuity Policy, please refer to the prospectus for Account B.

Internal Revenue Service Diversification Requirements

The funds intend to comply with the diversification requirements
currently imposed by the Internal Revenue Service on separate accounts
of insurance companies as a condition of maintaining the tax deferred
status of the variable annuity Policies issued by Account B. First Trust
reserves the right to depart from the investment strategy of a fund in
order to meet these diversification requirements. See the Statement of
Additional Information for more specific information.

12b-1 Plan

Nike Securities serves as the selling agent and distributor of the
funds' interests. In this capacity, Nike Securities manages the offering
of the funds' interests and is responsible for all sales and promotional
activities. In order to reimburse Nike Securities for its costs in
connection with these activities, each fund has adopted a service plan
under Rule 12b-1 under the Investment Company Act of 1940. Nike
Securities uses the service fee to compensate American Skandia for
providing account services to Policy owners. These services may include
establishing and maintaining Policy owners' accounts, answering
inquiries, and providing other personal services to Policy owners.
Because these fees are paid out of the fund's assets on an on-going
basis, over time these fees will increase the cost of your investment
any may cost you more than paying other types of sales charges. In
addition, the Plan allows First Trust to use a portion of its advisory
fee to compensate Nike Securities for other expenses, including printing
and distributing prospectuses to persons other than interest holders or
Policy owners, and the expenses of compensating its sales force and
preparing, printing and distributing advertising, sales literature and
reports to interest holders and Policy owners used in connection with
the sale of interests.

Net Asset Value

The price of fund interests is based on a fund's net asset value per
interest which is determined as of the close of trading (normally 4:00
p.m. eastern time) on each day the New York Stock Exchange is open for
business. Net asset value is calculated for each fund by taking the
market price of the fund's total assets, including interest or dividends
accrued but not yet collected, less all liabilities, and dividing by the
total number of interests outstanding. The result, rounded to the
nearest cent, is the net asset value per interest. All valuations are
subject to review by the funds' Board of Trustees or its delegate.

In determining net asset value, expenses are accrued and applied daily
and securities and other assets for which market quotations are
available are valued at market value. Common stocks and other equity
securities are valued at the last sales price that day. Common stocks
and other equity securities not listed on a national securities exchange
or Nasdaq are valued at the most recent bid prices. The prices of fixed-
income securities are provided by a pricing service and based on the
mean between the bid and asked price. When price quotes are not readily
available the pricing service establishes fair market value based on
prices of comparable securities.

Page 20

For funds that hold securities that trade primarily on foreign
exchanges, the net asset value of a fund's interests may change on days
when interest holders will not be able to purchase or redeem the fund's
interests.

Fund Service Providers

The custodian of the assets of the funds is The Chase Manhattan Bank, 4
New York Plaza, New York, NY 10004-2413. Chase also provides certain
accounting services to the funds. The funds' transfer, shareholder
services, fund accounting and dividend paying agent, First Data Investor
Services Group, Inc., 4400 Computer Drive, Westborough, Massachusetts
01581, performs bookkeeping, data processing, accounting and
administrative services for the operation of the funds and the
maintenance of shareholder accounts.

Each fund pays an administrative fee of 0.325% of average daily net
assets to cover expenses incurred by American Skandia in connection with
the administration of the funds, Account B and the Policies. See the
Statement of Additional Information for an additional discussion of fund
expenses.

Shareholder Inquiries

All inquiries regarding the funds should be directed to the fund at 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, 1-(800) 621-1675.

Page 21

FIRST DEFINED PORTFOLIO FUND, LLC

Several additional sources of information are available to you. The
Statement of Additional Information (SAI), incorporated by reference
into this prospectus, contains detailed information on the funds'
policies and operation. The SAI and the prospectus are intended for use
in connection with variable annuity policies offered by American Skandia
Life Assurance Corporation. Call the fund at 1-(800) 621-1675 to request
a free copy of the SAI or for other fund information.

You may also obtain this and other fund information directly from the
Securities and Exchange Commission (SEC). The SEC may charge a copying
fee for this information. Visit the SEC on-line at http://www.sec.gov or
in person at the SEC's Public Reference Room in Washington, D.C. Call
the SEC at 1-(800) SEC-0330 for room hours and operation. You may also
request fund information by writing to the SEC's Public Reference
Section, Washington, D.C. 20549.

First Defined Portfolio Fund, LLC
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
(800) 621-1675
www.nikesec.com

File No. 811-09235

Page 22

PART B

STATEMENT OF ADDITIONAL INFORMATION

FIRST DEFINED PORTFOLIO FUND, LLC
October 1, 1999

This Statement of Additional Information is not a prospectus. It
contains information in addition to and more detailed than set forth in
the Prospectus and should be read in conjunction with the First Defined
Portfolio Fund, LLC Prospectus, dated October 1, 1999. The Prospectus
may be obtained by calling (800) 621-1675, or writing 1001 Warrenville
Road, Suite 300, Lisle, Illinois 60532.

TABLE OF CONTENTS

PAGE
GENERAL INFORMATION AND HISTORY 1
INVESTMENT POLICIES 2
DESCRIPTION OF STRATEGY FUNDS 13
DESCRIPTION OF INDICES 15
INVESTMENT RISKS 18
ADDITIONAL STRATEGY FUND RISKS 21
ADDITIONAL SECTOR FUND RISKS 21
ADDITIONAL FOREIGN ISSUER RISKS 27
FUND MANAGEMENT 31
PERFORMANCE 33
PERFORMANCE DATA OF INVESTMENT STRATEGIES 34
INVESTMENT ADVISORY AND OTHER SERVICES 36
PURCHASES, REDEMPTIONS AND PRICING OF INTERESTS 39
12B-1 PLAN 40
ADDITIONAL INFORMATION 40
TAX STATUS 41

General Information and History

First Defined Portfolio Fund, LLC (the "Registrant") is a non-
diversified, open-end management series investment company organized as
a Delaware limited liability company on January 8, 1999. Currently, the
Registrant has eleven series authorized and outstanding (each a "Fund").
Each series of the Registrant represents membership interests (the
"interests") in a separate portfolio of securities and other assets,
with its own objectives and policies. The series of the Fund comprise
two categories-Strategy Funds and Sector Funds. The Strategy Funds are:
The DowSM Target 5 Portfolio (the "Target 5 Portfolio"), The DowSM DART
10 Portfolio (the "DART 10 Portfolio"), Global Target 15 Portfolio, S&P
Target 10 Portfolio, NASDAQ Target 15 Portfolio and First Trust 10
Uncommon Values Portfolio. The Sector Funds are: First Trust Energy
Portfolio, First Trust Financial Services Portfolio, First Trust
Internet Portfolio, First Trust Pharmaceutical Portfolio, and First
Trust Technology Portfolio. Interests of the Funds are sold only to
American Skandia Life Assurance Corporation Variable Account B ("Account
B") to fund the benefits of variable annuity policies (the "Policies")
issued by American Skandia Life Assurance Corporation ("American
Skandia").

Page 1

Investment Policies

Generally

The Prospectus describes the investment objectives and strategies of
each of the Funds. Each Fund is also subject to the following
fundamental policies which may not be changed without approval of the
holders of a majority of the outstanding voting interests of the Fund:

(1)A Fund may not issue senior securities, except as permitted under the
Investment Company Act of 1940.

(2)A Fund may not borrow money, except that a Fund may (i) borrow money
from banks for temporary or emergency purposes (but not for leverage or
the purchase of investments) and (ii) engage in other transactions
permissible under the Investment Company Act of 1940 that may involve a
borrowing (such as, obtaining short-term credits as are necessary for
the clearance of transactions, engaging in delayed-delivery
transactions, or purchasing certain futures, forward contracts and
options), provided that the combination of (i) and (ii) shall not exceed
33-1/3% of the value of the Fund's total assets (including the amount
borrowed), less the Fund's liabilities (other than borrowings).

(3)A Fund will not underwrite the securities of other issuers except to
the extent the Fund may be considered an underwriter under the
Securities Act of 1933 in connection with the purchase and sale of
portfolio securities.

(4)A Fund will not purchase or sell real estate or interests therein,
unless acquired as a result of ownership of securities or other
instruments (but this shall not prohibit a Fund from purchasing or
selling securities or other instruments backed by real estate or of
issuers engaged in real estate activities).

(5)A Fund may not make loans to other persons, except through (i) the
purchase of debt securities permissible under the Fund's investment
policies, (ii) repurchase agreements, or (iii) the lending of portfolio
securities, provided that no such loan of portfolio securities may be
made by a Fund if, as a result, the aggregate of such loans would exceed
33-1/3% of the value of the Fund's total assets.

(6)A Fund may not purchase or sell physical commodities unless acquired
as a result of ownership of securities or other instruments (but this
shall not prevent a Fund from purchasing or selling options, futures
contracts, forward contracts or other derivative instruments, or from
investing in securities or other instruments backed by physical
commodities).

(7)A Fund may not pledge, mortgage or hypothecate any of its assets
except as may be necessary in connection with permissible borrowings or
investments and then such pledging, mortgaging, or hypothecating may not
exceed 33-1/3% of the Fund's total assets at the time of the borrowing
or investment.

(8)A Strategy Fund may invest more than 25% of its assets in the
securities of issuers in any single industry if the applicable
investment strategy for the Fund selects securities in a manner that
results in such a concentration. A Sector Fund may invest more than 25%
of its assets in the securities of issuers in the industry represented
by the Fund. Notwithstanding the foregoing, there shall be no
limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. (See "Risk Factors"
in the Prospectus and "Additional Sector Fund Risks" herein for a
discussion of the risks associated with the concentration of a Fund's
holdings in a given industry.)

Except for restriction (2), if a percentage restriction is adhered to at
the time of investment, a later increase in percentage resulting from a
change in market value of the investment or the total assets will not
constitute a violation of that restriction.

The foregoing fundamental policies and the investment objective of a
Fund may not be changed without the affirmative vote of the majority of
the outstanding voting interests of the Registrant (or of a particular
Fund, if appropriate). The Investment Company Act of 1940 ("1940 Act")
defines a majority vote as the vote of the lesser of (i) 67% of the
voting interests represented at a meeting at which more than 50% of the
outstanding interests are represented or (ii) more than 50% of the
outstanding voting interests. With respect to the submission of a
change in an investment policy to the holders of outstanding voting
interests of a particular Fund, such matter shall be deemed to have been

Page 2

effectively acted upon with respect to such Fund if a majority of the
outstanding voting interests of such Fund vote for the approval of such
matter, notwithstanding that (1) such matter has not been approved by
the holders of a majority of the outstanding voting interests of any
other Fund affected by such matter, and (2) such matter has not been
approved by the vote of a majority of the outstanding voting Registrant
interests.

In addition to the foregoing fundamental policies, the Funds are also
subject to strategies and policies discussed herein which, unless
otherwise noted, are non-fundamental restrictions and policies which may
be changed by the Board of Trustees.

Warrants

Each Fund may invest in warrants. Warrants acquired by a Fund entitle it
to buy common stock from the issuer at a specified price and time. They
do not represent ownership of the securities but only the right to buy
them. Warrants are subject to the same market risks as stocks, but may
be more volatile in price. A Fund's investment in warrants will not
entitle it to receive dividends or exercise voting rights and will
become worthless if the warrants cannot be profitably exercised before
their expiration date.

Securities Lending

Each Fund may also lend portfolio securities to broker-dealers and
financial institutions to realize additional income. A Fund will not
lend its portfolio securities or other assets, if as a result, more than
33 1/3% of the Fund's total assets, including collateral received, would
be lent to broker-dealers or other parties. Such loans will be secured
continuously by collateral at least equal to the value of the securities
lent by "marking-to-market" daily. The Fund will continue to receive the
equivalent of the interest or dividends paid by the issuer of the
securities lent and will retain the right to call, upon notice, the lent
securities. The Fund may also receive interest on the investment of the
collateral or a fee from the borrower as compensation for the loan.
Securities loaned by a Fund remain subject to fluctuations in market
value. A Fund may pay reasonable finders, custodian and administrative
fees in connection with a loan. As with other extensions of credit,
there are risks of delay in recovery or even loss of rights in the
collateral should the borrower of the securities fail financially.
However, loans will be made only to firms deemed by First Trust to be of
good standing.

During the period that a Fund seeks to enforce its rights against the
borrower, the collateral and the securities loaned remain subject to
fluctuations in market value. A Fund may also incur expenses in
enforcing its rights. If a Fund has sold a loaned security, it may not
be able to settle the sale of the security and may incur potential
liability to the buyer of the security on loan for its costs to cover
the purchase.

Delayed-Delivery Transactions

A Fund may from time to time purchase securities on a "when-issued" or
other delayed-delivery basis. The price of securities purchased in such
transactions is fixed at the time the commitment to purchase is made,
but delivery and payment for the securities take place at a later date.
Normally, the settlement date occurs within 45 days of the purchase.
During the period between the purchase and settlement, no payment is
made by a Fund to the issuer and no interest is accrued on debt
securities or dividend income is earned on equity securities. Delayed-
delivery commitments involve a risk of loss if the value of the security
to be purchased declines prior to the settlement date, which risk is in
addition to the risk of decline in value of a Fund's other assets.
While securities purchased in delayed-delivery transactions may be sold
prior to the settlement date, the Funds intend to purchase such
securities with the purpose of actually acquiring them. At the time a
Fund makes the commitment to purchase a security in a delayed-delivery
transaction, it will record the transaction and reflect the value of the
security in determining its net asset value. The Funds do not believe
that net asset value will be adversely affected by purchases of
securities in delayed-delivery transactions.

Each Fund will maintain in a segregated account cash, U.S. government
securities, and high grade liquid debt securities equal in value to
commitments for delayed-delivery securities. Such segregated securities
will mature or, if necessary, be sold on or before the settlement date.
When the time comes to pay for delayed-delivery securities, a Fund will
meet its obligations from then-available cash flow, sale of the
securities held in the segregated account described above, sale of other
securities, or, although it would not normally expect to do so, from the
sale of the delayed-delivery securities themselves (which may have a
market value greater or less than the Fund's payment obligation).

Page 3

Illiquid Securities

Each Fund may invest in illiquid securities (i.e., securities that are
not readily marketable). For purposes of this restriction, illiquid
securities include, but are not limited to, restricted securities
(securities the disposition of which is restricted under the federal
securities laws), securities that may only be resold pursuant to Rule
144A under the Securities Act of 1933, as amended (the "Securities
Act"), but that are deemed to be illiquid; and repurchase agreements
with maturities in excess of seven days. However, a Fund will not
acquire illiquid securities if, as a result, such securities would
comprise more than 15% of the value of the Fund's net assets. The Board
of Trustees or its delegates has the ultimate authority to determine, to
the extent permissible under the federal securities laws, which
securities are liquid or illiquid for purposes of this 15% limitation.
The Board of Trustees has delegated to First Trust the day-to-day
determination of the illiquidity of any equity or fixed-income security,
although it has retained oversight and ultimate responsibility for such
determinations. Although no definitive liquidity criteria are used, the
Board of Trustees has directed First Trust to look to such factors as
(i) the nature of the market for a security (including the institutional
private resale market; the frequency of trades and quotes for the
security; the number of dealers willing to purchase or sell the
security; and the amount of time normally needed to dispose of the
security, the method of soliciting offers and the mechanics of
transfer), (ii) the terms of certain securities or other instruments
allowing for the disposition to a third party or the issuer thereof
(e.g., certain repurchase obligations and demand instruments), and (iii)
other permissible relevant factors.

Restricted securities may be sold only in privately negotiated
transactions or in a public offering with respect to which a
registration statement is in effect under the Securities Act. Where
registration is required, a Fund may be obligated to pay all or part of
the registration expenses and a considerable period may elapse between
the time of the decision to sell and the time a Fund may be permitted to
sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, a Fund might
obtain a less favorable price than that which prevailed when it decided
to sell. Illiquid securities will be priced at fair value as determined
in good faith by the Board of Trustees or its delegate. If, through the
appreciation of illiquid securities or the depreciation of liquid
securities, a Fund should be in a position where more than 15% of the
value of its net assets are invested in illiquid securities, including
restricted securities which are not readily marketable, the affected
Fund will take such steps as is deemed advisable, if any, to protect
liquidity.

Security-related Issuers

The S&P Target 10 Portfolio may seek exemptive relief from the
Securities and Exchange Commission to allow the Fund to invest more than
5% of its assets in the securities of any issuer that derives more than
15 percent of its gross revenue from "securities related activities" (as
defined in Rule 12d3-1 under the Investment Company Act of 1940). Until
such relief is received, despite any investment strategy, the Fund will
not be able to invest more than 5% of its assets in such issuers.

Money Market Funds

Each Fund may invest in shares of money market funds to the extent
permitted by the Investment Company Act of 1940.

Temporary Investments

Each Fund may, without limit as to percentage of assets, purchase U.S.
government securities or short-term debt securities to keep cash on hand
fully invested or for temporary defensive purposes. Short-term debt
securities are securities from issuers having a long-term debt rating of
at least A or higher by Standard & Poor's Ratings Group ("S&P"), Moody's
Investors Service, Inc. ("Moody's") or Fitch IBCA, Inc. ("Fitch"), or A-
or higher by Duff & Phelps, Inc. ("D&P") and having a maturity of one
year or less.

Short-term debt income securities are defined to include, without
limitation, the following:

(1)U.S. government securities, including bills, notes and bonds
differing as to maturity and rates of interest, which are either issued
or guaranteed by the U.S. Treasury or by U.S. government agencies or
instrumentalities. U.S. government agency securities include securities
issued by (a) the Federal Housing Administration, Farmers Home

Page 4

Administration, Export-Import Bank of United States, Small Business
Administration, and the Government National Mortgage Association, whose
securities are supported by the full faith and credit of the United
States; (b) the Federal Home Loan Banks, Federal Intermediate Credit
Banks, and the Tennessee Valley Authority, whose securities are
supported by the right to the agency to borrow from the U.S. Treasury;
(c) the Federal National Mortgage Association, whose securities are
supported by the discretionary authority of the U.S. government to
purchase certain obligations of the agency or instrumentality; and (d)
the Student Loan Marketing Association, whose securities are supported
only by its credit. While the U.S. government provides financial support
to such U.S. government-sponsored agencies or instrumentalities, no
assurance can be given that it always will do so since it is not so
obligated by law. The U.S. government, its agencies, and
instrumentalities do not guarantee the market value of their securities,
and consequently, the value of such securities may fluctuate.

(2)Certificates of deposit issued against funds deposited in a bank or
savings and loan association. Such certificates are for a definite
period of time, earn a specified rate of return, and are normally
negotiable. If such certificates of deposit are non-negotiable, they
will be considered illiquid securities and be subject to a Fund's 15%
restriction on investments in illiquid securities. Pursuant to the
certificate of deposit, the issuer agrees to pay the amount deposited
plus interest to the bearer of the certificate on the date specified
thereon. Under current FDIC regulations, the maximum insurance payable
as to any one certificate of deposit is $100,000; therefore;
certificates of deposit purchased by a Fund may not be fully insured.

(3)Bankers' acceptances which are short-term credit instruments used to
finance commercial transactions. Generally, an acceptance is a time
draft drawn on a bank by an exporter or an importer to obtain a stated
amount of funds to pay for specific merchandise. The draft is then
"accepted" by a bank that, in effect, unconditionally guarantees to pay
the face value of the instrument on its maturity date. The acceptance
may then be held by the accepting bank as an asset or it may be sold in
the secondary market at the going rate of interest for a specific
maturity.

(4)Repurchase agreements which involve purchases of debt securities. In
such an action, at the time the Fund purchases the security, it
simultaneously agrees to resell and redeliver the security to the
seller, who also simultaneously agrees to buy back the security at a
fixed price and time. This assures a predetermined yield for a Fund
during its holding period since the resale price is always greater than
the purchase price and reflects an agreed-upon market rate. The period
of these repurchase agreements will usually be short, from overnight to
one week, and at no time will a Fund invest in repurchase agreements for
more than one year. Such actions afford an opportunity for a Fund to
invest temporarily available cash. A Fund may enter into repurchase
agreements only with respect to obligations of the U.S. government, its
agencies or instrumentalities; certificates of deposits; or bankers
acceptances in which the Funds may invest. In addition, the Funds may
only enter into repurchase agreements where the market value of the
purchased securities/collateral equals at least 100% of principal
including accrued interest and is marked-to-market daily. The risk to a
Fund is limited to the ability of the seller to pay the agreed-upon sum
on the repurchase date; in the event of default, the repurchase
agreement provides that the affected Fund is entitled to sell the
underlying collateral. If the value of the collateral declines after the
agreement is entered into, however, and if the seller defaults under a
repurchase agreement when the value of the underlying collateral is less
than the repurchase price, a Fund could incur a loss of both principal
and interest. The Funds, however, intend to enter into repurchase
agreements only with financial institutions and dealers believed by
First Trust to present minimal credit risks in accordance with criteria
established by the Fund's Board of Trustees. First Trust will review and
monitor the creditworthiness of such institutions. First Trust monitors
the value of the collateral at the time the action is entered into and
at all times during the term of the repurchase agreement. First Trust
does so in an effort to determine that the value of the collateral
always equals or exceeds the agreed-upon repurchase price to be paid to
a Fund. If the seller were to be subject to a federal bankruptcy
proceeding, the ability of a Fund to liquidate the collateral could be
delayed or impaired because of certain provisions of the bankruptcy laws.

(5)Bank time deposits, which are monies kept on deposit with banks or
savings and loan associations for a stated period of time at a fixed
rate of interest. There may be penalties for the early withdrawal of
such time deposits, in which case the yields of these investments will
be reduced.

(6)Commercial paper, which are short-term unsecured promissory notes,
including variable rate master demand notes issued by corporations to
finance their current operations. Master demand notes are direct lending
arrangements between a Fund and a corporation. There is no secondary
market for the notes. However, they are redeemable by the Fund at any
time. The portfolio manager will consider the financial condition of the
corporation (e.g., earning power, cash flow, and other liquidity ratios)
and will continuously monitor the corporation's ability to meet all of

Page 5

its financial obligations, because a Fund's liquidity might be impaired
if the corporation were unable to pay principal and interest on demand.
A Fund may only invest in commercial paper rated A-1 or better by S&P,
Prime-1 or higher by Moody's, Duff 2 or higher by D&P or Fitch 2 or
higher by Fitch.

Hedging Strategies

General Description of Hedging Strategies

A Fund may engage in hedging activities. First Trust may cause a Fund to
utilize a variety of financial instruments, including options, forward
contracts, futures contracts (sometimes referred to as "futures"), and
options on future contracts to attempt to hedge the Fund's holdings.

Hedging or derivative instruments on securities generally are used to
hedge against price movements in one or more particular securities
positions that a Fund owns or intends to acquire. Such instruments may
also be used to "lock-in" realized but unrecognized gains in the value
of portfolio securities. Hedging instruments on stock indices, in
contrast, generally are used to hedge against price movements in broad
equity market sectors in which a Fund has invested or expects to invest.
Hedging strategies, if successful, can reduce the risk of loss by wholly
and partially offsetting the negative effect of unfavorable price
movements in the investments being hedged. However, hedging strategies
can also reduce the opportunity for gain by offsetting the positive
effect of favorable price movements in the hedged investments. The use
of hedging instruments is subject to applicable regulations of the
Securities and Exchange Commission (the "SEC"), the several options and
futures exchanges upon which they are traded, the Commodity Futures
Trading Commission (the "CFTC") and various state regulatory
authorities. In addition, a Fund's ability to use hedging instruments
will be limited by tax considerations.

General Limitations on Futures and Options Transactions

The Registrant has filed a notice of eligibility for exclusion from the
definition of the term "commodity pool operator" with the CFTC and the
National Futures Association, which regulate trading in the futures
markets. Pursuant to Section 4.5 of the regulations under the Commodity
Exchange Act (the "CEA"), the notice of eligibility for a Fund includes
the representation that the Fund will use futures contracts and related
options solely for bona fide hedging purposes within the meaning of CFTC
regulations. A Fund will not enter into futures and options transactions
if the sum of the initial margin deposits and premiums paid for
unexpired options exceeds 5% of a Fund's total assets. In addition, a
Fund will not enter into futures contracts and options transactions if
more than 30% of its net assets would be committed to such instruments.

The foregoing limitations are not fundamental policies of a Fund and may
be changed without shareholder approval as regulatory agencies permit.
Various exchanges and regulatory authorities have undertaken reviews of
options and futures trading in light of market volatility. Among the
possible actions that have been presented are proposals to adopt new or
more stringent daily price fluctuation limits for futures and options
transactions and proposals to increase the margin requirements for
various types of futures transactions.

Asset Coverage for Futures and Options Positions

Each Fund will comply with the regulatory requirements of the SEC and
the CFTC with respect to coverage of options and futures positions by
registered investment companies and, if the guidelines so require, will
set aside cash, U.S. government securities, high grade liquid debt
securities and/or other liquid assets permitted by the SEC and CFTC in a
segregated custodial account in the amount prescribed. Securities held
in a segregated account cannot be sold while the futures or options
position is outstanding, unless replaced with other permissible assets,
and will be marked-to-market daily.

Stock Index Options

A Fund may purchase stock index options, sell stock index options in
order to close out existing positions, and/or write covered options on
stock indexes for hedging purposes. Stock index options are put options
and call options on various stock indexes. In most respects, they are
identical to listed options on common stocks. The primary difference
between stock options and index options occurs when index options are
exercised. In the case of stock options, the underlying security, common
stock, is delivered. However, upon the exercise of an index option,
settlement does not occur by delivery of the securities comprising the
index. The option holder who exercises the index option receives an
amount of cash if the closing level of the stock index upon which the
option is based is greater than, in the case of a call, or less than, in
the case of a put, the exercise price of the option. This amount of cash

Page 6

is equal to the difference between the closing price of the stock index
and the exercise price of the option expressed in dollars times a
specified multiple.

A stock index fluctuates with changes in the market values of the stock
included in the index. For example, some stock index options are based
on a broad market index, such as the Standard & Poor's 500 or the Value
Line Composite Index or a narrower market index, such as the Standard &
Poor's 100. Indexes may also be based on an industry or market segment,
such as the AMEX Oil and Gas Index or the Computer and Business
Equipment Index. Options on stock indexes are currently traded on the
following exchanges: the Chicago Board of Options Exchange, the New York
Stock Exchange, the American Stock Exchange, the Pacific Stock Exchange,
and the Philadelphia Stock Exchange.

A Fund's use of stock index options is subject to certain risks.
Successful use by a Fund of options on stock indexes will be subject to
the ability of First Trust to correctly predict movements in the
directions of the stock market. This requires different skills and
techniques than predicting changes in the prices of individual
securities. In addition, a Fund's ability to effectively hedge all or a
portion of the securities in its portfolio, in anticipation of or during
a market decline through transactions in put options on stock indexes,
depends on the degree to which price movements in the underlying index
correlate with the price movements of the securities held by a Fund.
Inasmuch as a Fund's securities will not duplicate the components of an
index, the correlation will not be perfect. Consequently, each Fund will
bear the risk that the prices of its securities being hedged will not
move in the same amount as the prices of its put options on the stock
indexes. It is also possible that there may be a negative correlation
between the index and a Fund's securities which would result in a loss
on both such securities and the options on stock indexes acquired by the
Fund.

The hours of trading for options may not conform to the hours during
which the underlying securities are traded. To the extent that the
options markets close before the markets for the underlying securities,
significant price and rate movements can take place in the underlying
markets that cannot be reflected in the options markets. The purchase of
options is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary
portfolio securities transactions. The purchase of stock index options
involves the risk that the premium and transaction costs paid by a Fund
in purchasing an option will be lost as a result of unanticipated
movements in prices of the securities comprising the stock index on
which the option is based.

Certain Considerations Regarding Options

There is no assurance that a liquid secondary market on an options
exchange will exist for any particular option, or at any particular
time, and for some options no secondary market on an exchange or
elsewhere may exist. If a Fund is unable to close out a call option on
securities that it has written before the option is exercised, the Fund
may be required to purchase the optioned securities in order to satisfy
its obligation under the option to deliver such securities. If a Fund is
unable to effect a closing sale transaction with respect to options on
securities that it has purchased, it would have to exercise the option
in order to realize any profit and would incur transaction costs upon
the purchase and sale of the underlying securities.

The writing and purchasing of options is a highly specialized activity
which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. Imperfect
correlation between the options and securities markets may detract from
the effectiveness of attempted hedging. Options transactions may result
in significantly higher transaction costs and portfolio turnover for the
Fund.

Futures Contracts

Each Fund may enter into futures contracts (hereinafter referred to as
"Futures" or "Futures Contracts"), including index Futures as a hedge
against movements in the equity markets, in order to hedge against
changes on securities held or intended to be acquired by a Fund or for
other purposes permissible under the CEA. Each Fund's hedging may
include sales of Futures as an offset against the effect of expected
declines in stock prices and purchases of Futures as an offset against
the effect of expected increases in stock prices. The Fund will not
enter into Futures Contracts which are prohibited under the CEA and
will, to the extent required by regulatory authorities, enter only into
Futures Contracts that are traded on national futures exchanges and are
standardized as to maturity date and underlying financial instrument.
The principal interest rate Futures exchanges in the United States are
the Board of Trade of the City of Chicago and the Chicago Mercantile
Exchange. Futures exchanges and trading are regulated under the CEA by
the CFTC.

Page 7

An interest rate futures contract provides for the future sale by one
party and purchase by another party of a specified amount of a specific
financial instrument (e.g., a debt security) or currency for a specified
price at a designated date, time and place. An index Futures Contract is
an agreement pursuant to which the parties agree to take or make
delivery of an amount of cash equal to the difference between the value
of the index at the close of the last trading day of the contract and
the price at which the index Futures Contract was originally written.
Transaction costs are incurred when a Futures Contract is bought or sold
and margin deposits must be maintained. A Futures Contract may be
satisfied by delivery or purchase, as the case may be, of the instrument
or by payment of the change in the cash value of the index. More
commonly, Futures Contracts are closed out prior to delivery by entering
into an offsetting transaction in a matching Futures Contract. Although
the value of an index might be a function of the value of certain
specified securities, no physical delivery of those securities is made.
If the offsetting purchase price is less than the original sale price, a
gain will be realized. Conversely, if the offsetting sale price is more
than the original purchase price, a gain will be realized; if it is
less, a loss will be realized. The transaction costs must also be
included in these calculations. There can be no assurance, however, that
a Fund will be able to enter into an offsetting transaction with respect
to a particular Futures Contract at a particular time. If a Fund is not
able to enter into an offsetting transaction, the Fund will continue to
be required to maintain the margin deposits on the Futures Contract.

Margin is the amount of funds that must be deposited by each Fund with
its custodian in a segregated account in the name of the futures
commission merchant in order to initiate Futures trading and to maintain
the Fund's open positions in Futures Contracts. A margin deposit is
intended to ensure the Fund's performance of the Futures Contract. The
margin required for a particular Futures Contract is set by the exchange
on which the Futures Contract is traded and may be significantly
modified from time to time by the exchange during the term of the
Futures Contract. Futures Contracts are customarily purchased and sold
on margins that may range upward from less than 5% of the value of the
Futures Contract being traded.

If the price of an open Futures Contract changes (by increase in the
case of a sale or by decrease in the case of a purchase) so that the
loss on the Futures Contract reaches a point at which the margin on
deposit does not satisfy margin requirements, the broker will require an
increase in the margin. However, if the value of a position increases
because of favorable price changes in the Future Contract so that the
margin deposit exceeds the required margin, the broker will pay the
excess to the respective Fund. In computing daily net asset value, each
Fund will mark to market the current value of its open Futures
Contracts. Each Fund expects to earn interest income on their margin
deposits.

Because of the low margin deposits required, Futures trading involves an
extremely high degree of leverage. As a result, a relatively small price
movement in a Futures Contract may result in immediate and substantial
loss, as well as gain, to the investor. For example, if at the time of
purchase, 10% of the value of the Futures Contract is deposited as
margin, a subsequent 10% decrease in the value of the Futures Contract
would result in a total loss of the margin deposit, before any deduction
for the transaction costs, if the account were then closed out. A 15%
decrease would result in a loss equal to 150% of the original margin
deposit, if the Future Contracts were closed out. Thus, a purchase or
sale of a Futures Contract may result in losses in excess of the amount
initially invested in the Futures Contract. However, a Fund would
presumably have sustained comparable losses if, instead of the Futures
Contract, it had invested in the underlying financial instrument and
sold it after the decline.

Most United States Futures exchanges limit the amount of fluctuation
permitted in Futures Contract prices during a single trading day. The
day limit establishes the maximum amount that the price of a Futures
Contract may vary either up or down from the previous day's settlement
price at the end of a trading session. Once the daily limit has been
reached in a particular type of Futures Contract, no trades may be made
on that day at a price beyond that limit. The daily limit governs only
price movement during a particular trading day and therefore does not
limit potential losses, because the limit may prevent the liquidation of
unfavorable positions. Futures Contract prices have occasionally moved
to the daily limit for several consecutive trading days with little or
no trading, thereby preventing prompt liquidation of Futures positions
and subjecting some Futures traders to substantial losses.

There can be no assurance that a liquid market will exist at a time when
a Fund seeks to close out a Futures position. The Fund would continue to
be required to meet margin requirements until the position is closed,
possibly resulting in a decline in the Fund's net asset value. In
addition, many of the contracts discussed above are relatively new
instruments without a significant trading history. As a result, there
can be no assurance that an active secondary market will develop or
continue to exist.

Page 8

A public market exists in Futures Contracts covering a number of
indexes, including, but not limited to, the Standard & Poor's 500 Index,
the Standard & Poor's 100 Index, the Nasdaq 100 Index, the Value Line
Composite Index and the New York Stock Exchange Composite Index.

Options on Futures

Each Fund may also purchase or write put and call options on Futures
Contracts and enter into closing transactions with respect to such
options to terminate an existing position. A futures option gives the
holder the right, in return of the premium paid, to assume a long
position (call) or short position (put) in a Futures Contract at a
specified exercise price prior to the expiration of the option. Upon
exercise of a call option, the holder acquires a long position in the
Futures Contract and the writer is assigned the opposite short position.
In the case of a put option, the opposite is true. Prior to exercise or
expiration, a futures option may be closed out by an offsetting purchase
or sale of a futures option of the same series.

A Fund may use options on Futures Contracts in connection with hedging
strategies. Generally, these strategies would be applied under the same
market and market sector conditions in which the Fund use put and call
options on securities or indexes. The purchase of put options on Futures
Contracts is analogous to the purchase of puts on securities or indexes
so as to hedge a Funds' securities holdings against the risk of
declining market prices. The writing of a call option or the purchasing
of a put option on a Futures Contract constitutes a partial hedge
against declining prices of a securities which are deliverable upon
exercise of the Futures Contract. If the futures price at expiration of
a written call option is below the exercise price, a Fund will retain
the full amount of the option premium which provides a partial hedge
against any decline that may have occurred in the Fund's holdings of
securities. If the futures price when the option is exercised is above
the exercise price, however, the Fund will incur a loss, which may be
offset, in whole or in part, by the increase in the value of the
securities held by the Fund that were being hedged. Writing a put option
or purchasing a call option on a Futures Contract serves as a partial
hedge against an increase in the value of the securities the Fund
intends to acquires.

As with investments in Futures Contracts, each Fund is required to
deposit and maintain margin with respect to put and call options on
Futures Contracts written by it. Such margin deposits will vary
depending on the nature of the underlying Futures Contract (and the
related initial margin requirements), the current market value of the
option, and other futures positions held by the Fund. Each Fund will set
aside in a segregated account at the Fund's custodian liquid assets,
such as cash, U.S. government securities or other high grade liquid debt
obligations equal in value to the amount due on the underlying
obligation. Such segregated assets will be marked-to-market daily, and
additional assets will be placed in the segregated account whenever the
total value of the segregated account falls below the amount due on the
underlying obligation.

The risks associated with the use of options on Futures Contracts
include the risk that a Fund may close out its position as a writer of
an option only if a liquid secondary market exists for such options,
which cannot be assured. A Fund's successful use of options on Futures
Contracts depends on First Trust's ability to correctly predict the
movement in prices of Futures Contracts and the underlying instruments,
which may prove to be incorrect. In addition, there may be imperfect
correlation between the instruments being hedged and the Futures
Contract subject to the option. For additional information, see "Futures
Contracts." Certain characteristics of the futures market might increase
the risk that movements in the prices of futures contracts or options on
futures contracts might not correlate perfectly with movements in the
prices of the investments being hedged. For example, all participants in
the futures and options on futures contracts markets are subject to
daily variation margin calls and might be compelled to liquidate futures
or options on futures contracts positions whose prices are moving
unfavorably to avoid being subject to further calls. These liquidations
could increase the price volatility of the instruments and distort the
normal price relationship between the futures or options and the
investments being hedged. Also, because of initial margin deposit
requirements in markets, there might be increased participation by
speculators in the futures markets. This participation also might cause
temporary price distortions. In addition, activities of large traders in
both the futures and securities markets involving arbitrage, "program
trading," and other investment strategies might result in temporary
price distortions.

Risks and Special Considerations Concerning Derivatives

In addition to the foregoing, the use of derivative instruments involves
certain general risks and considerations as described below.

Page 9

(1)Market Risk. Market risk is the risk that the value of the underlying
assets may go up or down. Adverse movements in the value of an
underlying asset can expose a Fund to losses. Market risk is the primary
risk associated with derivative transactions. Derivative instruments may
include elements of leverage and, accordingly, fluctuations in the value
of the derivative instrument in relation to the underlying asset may be
magnified. The successful use of derivative instruments depends upon a
variety of factors, particularly the portfolio manager's ability to
predict movements of the securities, currencies, and commodities
markets, which may require different skills than predicting changes in
the prices of individual securities. There can be no assurance that any
particular strategy adopted will succeed. A decision to engage in a
derivative transaction will reflect the portfolio manager's judgment
that the derivative transaction will provide value to a Fund and its
shareholders and is consistent with a Fund's objectives, investment
limitations, and operating policies. In making such a judgment, the
portfolio manager will analyze the benefits and risks of the derivative
transactions and weigh them in the context of a Fund's overall
investments and investment objective.

(2)Credit Risk. Credit risk is the risk that a loss be sustained as a
result of the failure of a counterparty to comply with the terms of a
derivative instrument. The counterparty risk for exchange-traded
derivatives is generally less than for privately-negotiated or OTC
derivatives, since generally a clearing agency, which is the issuer or
counterparty to each exchange-traded instrument, provides a guarantee of
performance. For privately-negotiated instruments, there is no similar
clearing agency guarantee. In all transactions, a Fund will bear the
risk that the counterparty will default, and this could result in a loss
of the expected benefit of the derivative transactions and possibly
other losses to the Fund. The Fund will enter into transactions in
derivative instruments only within counterparties that First Trust
reasonably believes are capable of performing under the contract.

(3)Correlation Risk. Correlation risk is the risk that there might be an
imperfect correlation, or even no correlation, between price movements
of a derivative instrument and price movements of investments being
hedged. When a derivative transaction is used to completely hedge
another position, changes in the market value of the combined position
(the derivative instrument plus the position being hedged) result from
an imperfect correlation between the price movements of the two
instruments. With a perfect hedge, the value of the combined position
remains unchanged with any change in the price of the underlying asset.
With an imperfect hedge, the value of the derivative instrument and its
hedge are not perfectly correlated. For example, if the value of a
derivative instrument used in a short hedge (such as writing a call
option, buying a put option or selling a futures contract) increased by
less than the decline in value of the hedged investments, the hedge
would not be perfectly correlated. This might occur due to factors
unrelated to the value of the investments being hedged, such as
speculative or other pressures on the markets in which these instruments
are traded. The effectiveness of hedges using instruments on indices
will depend, in part, on the degree of correlation between price
movements in the index and the price movements in the investments being
hedged.

(4)Liquidity Risk. Liquidity risk is the risk that a derivative
instrument cannot be sold, closed out, or replaced quickly at or very
close to its fundamental value. Generally, exchange contracts are very
liquid because the exchange clearinghouse is the counterparty of every
contract. OTC transactions are less liquid than exchange-traded
derivatives since they often can only be closed out with the other party
to the transaction. A Fund might be required by applicable regulatory
requirements to maintain assets as "cover," maintain segregated
accounts, and/or make margin payments when it takes positions in
derivative instruments involving obligations to third parties (i.e.,
instruments other than purchase options). If a Fund is unable to close
out its positions in such instruments, it might be required to continue
to maintain such assets or accounts or make such payments until the
position expires, matures, or is closed out. These requirements might
impair a Fund's ability to sell a security or make an investment at a
time when it would otherwise be favorable to do so, or require that the
Fund sell a portfolio security at a disadvantageous time. A Fund's
ability to sell or close out a position in an instrument prior to
expiration or maturity depends upon the existence of a liquid secondary
market or, in the absence of such a market, the ability and willingness
of the counterparty to enter into a transaction closing out the
position. Due to liquidity risk, there is no assurance that any
derivatives position can be sold or closed out at a time and price that
is favorable to a Fund.

(5)Legal Risk. Legal risk is the risk of loss caused by the
unenforceability of a party's obligations under the derivative. While a
party seeking price certainty agrees to surrender the potential upside
in exchange for downside protection, the party taking the risk is
looking for a positive payoff. Despite this voluntary assumption of
risk, a counterparty that has lost money in a derivative transaction may
try to avoid payment by exploiting various legal uncertainties about
certain derivative products.

Page 10

(6)Systemic or "Interconnection" Risk. Systemic or interconnection risk
is the risk that a disruption in the financial markets will cause
difficulties for all market participants. In other words, a disruption
in one market will spill over into other markets, perhaps creating a
chain reaction. Much of the OTC derivatives market takes place among the
OTC dealers themselves, thus creating a large interconnected web of
financial obligations. This interconnectedness raises the possibility
that a default by one large dealer could create losses for other dealers
and destabilize the entire market for OTC derivative instruments.

Foreign Investments

Indirect Foreign Investment-Depositary Receipts. Global Target 15
Portfolio, NASDAQ Target 15 Portfolio, First Trust 10 Uncommon Values
Portfolio and the Sector Funds may invest in foreign securities by
purchasing depositary receipts, including American Depositary Receipts
("ADRs"), European Depositary Receipts ("EDRs"), or Global Depositary
Receipts ("GDRs"), or other securities representing indirect ownership
interests in the securities of foreign issuers. Generally, ADRs, in
registered form, are denominated in U.S. dollars and are designed for
use in the U.S. securities markets, while EDRs and GDRs, in bearer form,
may be denominated in other currencies and are designed for use in
European and other markets. For purposes of such Fund's investment
policies, ADRs, EDRs, and GDRs are deemed to have the same
classification as the underlying securities they represent, except that
ADRs, EDRs, and GDRs shall be treated as indirect foreign investments.
Thus, an ADR, EDR, or GDR representing ownership of common stock will be
treated as common stock. ADRs, EDRs, and GDRs do no eliminate all of
the risks associated with directly investing in the securities of
foreign issuers.

Other types of depositary receipts include American Depositary Shares
("ADSs"), Global Depositary Certificates ("GDCs"), and International
Depositary Receipts ("IDRs"). ADSs are shares issued under a deposit
agreement representing the underlying ordinary shares that trade in the
issuer's home market. An ADR, described above, is a certificate that
represents a number of ADSs. GDCs and IDRs are typically issued by a
foreign bank or trust company, although they may sometimes also be
issued by a U.S. bank or trust company. GDCs and IDRs are depositary
receipts that evidence ownership of underlying securities issued by
either a foreign or a U.S. corporation.

Direct Foreign Investments. The Global Target 15 Portfolio, NASDAQ
Target 15 Portfolio, First Trust 10 Uncommon Values Portfolio and the
Sector Funds may invest directly in the securities of foreign issuers.
In consideration of whether to invest in the securities of a foreign
company, First Trust considers such factors as the characteristics of
the particular company, differences between economic trends, and the
performance of securities markets within the U.S. and those within other
countries. First Trust also considers factors relating to the general
economic, governmental, and social conditions of the country or
countries where the company is located.

Securities transactions conducted outside the U.S. may not be regulated
as rigorously as in the U.S., may not involve a clearing mechanism and
related guarantees, and are subject to the risk of governmental actions
affecting trading in, or the prices of, foreign securities, currencies
and other instruments. The value of such positions also could be
adversely affected by (i) other complex foreign political, legal and
economic factors, (ii) lesser availability than in the U.S. of data on
which to make trading decisions, (iii) delays in a Fund's ability to act
upon economic events occurring in foreign markets during non-business
hours in the U.S., (iv) the imposition of different exercise and
settlement terms and procedures and the margin requirements than in the
U.S., and (v) lower trading volume and liquidity.

Foreign Currency Transactions. The Global Target 15 Portfolio, NASDAQ
Target 15 Portfolio, First Trust 10 Uncommon Values Portfolio and the
Sector Funds may engage in foreign currency forward contracts, options,
and futures transactions. Such Funds may enter into foreign currency
transactions for hedging and other permissible risk management purposes
only. Foreign currency futures and options contracts are traded in the
U.S. on regulated exchanges such as the Chicago Mercantile Exchange, the
Mid-America Commodities Exchange, and the Philadelphia Stock Exchange.
If the Funds invest in a currency futures or options contract, they must
make a margin deposit to secure performance of such contract. With
respect to investments in currency futures contracts, the Funds may also
be required to make a variation margin deposit because the value of
futures contracts fluctuates from purchase to maturity. In addition, the
Funds may segregate assets to cover its futures contracts obligations.

Risks and Special Considerations Concerning Foreign Currencies

(1)Currency Risks. The exchange rates between the U.S. dollar and
foreign currencies depend upon such factors as supply and demand in the
currency exchange markets, international balances of payments,
governmental intervention, speculation, and other economic and political
conditions. Although each Fund values its assets daily in U.S. dollars,

Page 11

a Fund may not convert its holdings of foreign currencies to U.S.
dollars daily. A Fund may incur conversion costs when it converts its
holdings to another currency. Foreign exchange dealers may realize a
profit on the difference between the price at which a Fund buys and
sells currencies. Funds may engage in foreign currency exchange
transactions in connection with its portfolio investments. A Fund will
conduct its foreign currency exchange transactions either on a spot
(i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market or through forward contracts to purchase or sell foreign
contracts.

(2)Forward Foreign Currency Exchange Contracts. The Global Target 15
Portfolio, NASDAQ Target 15 Portfolio, First Trust 10 Uncommon Values
Portfolio and the Sector Funds may enter into forward foreign currency
exchange contracts. Forward foreign currency exchange contracts may
limit potential gains that could result from a positive change in such
currency relationships. First Trust believes that it is important to
have the flexibility to enter into forward foreign currency exchange
contracts whenever it determines that it is in a Fund's best interest to
do so. The Funds will not speculate in foreign currency exchange.

The Funds will not enter into forward currency exchange contracts or
maintain a net exposure in such contracts that it would be obligated to
deliver an amount of foreign currency in excess of the value of their
portfolio securities or other assets denominated in that currency or, in
the case of a "cross-hedge," denominated in a currency or currencies
that First Trust believes will tend to be closely correlated with that
currency with regard to price movements. Generally, the Funds will not
enter into a forward foreign currency exchange contract with a term
longer than one year.

(3)Foreign Currency Options. A foreign currency option provides the
option buyer with the right to buy or sell a stated amount of foreign
currency at the exercise price on a specified date or during the option
period. The owner of a call option has the right, but not the
obligation, to buy the currency. Conversely, the owner of a put options
has the right, but not the obligation, to sell the currency. When the
option is exercised, the seller (i.e., writer) of the option is
obligated to fulfill the terms of the sold option. However, either the
seller or the buyer may, in the secondary market, close its position
during the option period at any time prior to expiration.

A call option on foreign currency generally rises in value if the
underlying currency appreciates in value, and a put option on a foreign
currency generally rises in value if the underlying currency depreciates
in value. Although purchasing a foreign currency option can protect the
Fund against an adverse movement in the value of a foreign currency, the
option will not limit the movement in the value of such currency. For
example, if a Fund held securities denominated in a foreign currency
that was appreciating and had purchased a foreign currency put to hedge
against a decline in the value of the currency, the Fund would not have
to exercise its put option. Likewise, if a Fund entered into a contract
to purchase a security denominated in foreign currency and, in
conjunction with that purchase, purchased a foreign currency call option
to hedge against a rise in value of the currency, and if the value of
the currency instead depreciated between the date of purchase and the
settlement date, the Fund would not have to exercise its call. Instead,
the Fund could acquire in the spot market the amount of foreign currency
needed for settlement.

(4)Special Risks Associated with Foreign Currency Options. Buyers and
sellers of foreign currency options are subject to the same risks that
apply to options generally. In addition, there are certain risks
associated with foreign currency options. The markets in foreign
currency options are relatively new, and the Fund's ability to establish
and close out positions on such options is subject to the maintenance of
a liquid secondary market. Although a Fund will not purchase or write
such options unless and until, in the opinion of the First Trust, the
market for them has developed sufficiently to ensure that the risks in
connection with such options are not greater than the risks in
connection with the underlying currency, there can be no assurance that
a liquid secondary market will exist for a particular option at any
specific time.

In addition, options on foreign currencies are affected by all of those
factors that influence foreign exchange rates and investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price
of the option position may vary with changes in the value of either or
both currencies and may have no relationship to the investment merits of
a foreign security. Because foreign currency transactions occurring in
the interbank market involve substantially larger amounts than those
that may be involved in the use of foreign currency options, investors
may be disadvantaged by having to deal in an odd lot market (generally
consisting of transactions of less than $1 million) for the underlying
foreign currencies at prices that are less favorable than for round lots.

Page 12

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirements that quotations available
through dealers or other market sources be firm or revised on a timely
basis. Available quotation information is generally representative of
very large transactions in the interbank market and thus may not reflect
relatively smaller transactions (i.e., less than $1 million) where rates
may be less favorable. The interbank market in foreign currencies is a
global, around-the-clock market. To the extent that the U.S. options
markets are closed while the markets for the underlying currencies
remain open, significant price and rate movements may take place in the
underlying markets that cannot be reflected in the options markets until
they reopen.

(5)Foreign Currency Futures Transactions. By using foreign currency
futures contracts and options on such contracts, a Fund may be able to
achieve many of the same objectives as it would through the use of
forward foreign currency exchange contracts. The Funds may be able to
achieve these objectives possibly more effectively and at a lower cost
by using futures transactions instead of forward foreign currency
exchange contracts.

(6)Special Risks Associated with Foreign Currency Futures Contracts and
Related Options. Buyers and sellers of foreign currency futures
contracts are subject to the same risks that apply to the use of futures
generally. In addition, there are risks associated with foreign
currency futures contracts and their use as a hedging device similar to
those associated with options on currencies, as described above.

Options on foreign currency futures contracts may involve certain
additional risks. Trading options on foreign currency futures contracts
is relatively new. The ability to establish and close out positions on
such options is subject to the maintenance of a liquid secondary market.
To reduce this risk, a Fund will not purchase or write options on
foreign currency futures contracts unless and until, in the opinion of
First Trust, the market for such options has developed sufficiently that
the risks in connection with such options are not greater than the risks
in connection with transactions in the underlying foreign currency
futures contracts. Compared to the purchase or sale of foreign currency
futures contracts, the purchase of call or put options on futures
contracts involves less potential risk to a Fund because the maximum
amount at risk is the premium paid for the option (plus transaction
costs). However, there may be circumstances when the purchase of a call
or put option on a futures contract would result in a loss, such as when
there is no movement in the price of the underlying currency or futures
contract.

Insurance Law Restrictions

In connection with the Registrant's agreement to sell shares to Account
B, American Skandia and First Trust may enter into agreements, required
by certain state insurance departments, under which First Trust may
agree to use its best efforts to assure and to permit American Skandia
to monitor each Fund for compliance with the investment restrictions and
limitations prescribed by state insurance laws and regulations
applicable to the investment of separate account assets in shares of
mutual funds. If a Fund failed to comply with such restrictions or
limitations, American Skandia would take appropriate action which might
include ceasing to make investments in the Fund or withdrawing from the
state imposing the limitation. Such restrictions and limitations are not
expected to have a significant impact on the Registrant's operations.

Description of Strategy Funds

As described in the Funds' Prospectus, the portfolio of the DowSM Target
5 Portfolio consists primarily of common stocks of the five companies
with the lowest per share stock price of the ten companies in the Dow
Jones Industrial AverageSM ("DJIA") that have the highest dividend
yields as of the date specified in the prospectus (the "Stock Selection
Date"). The portfolio of the DowSM DART 10 Portfolio consists primarily
of the common stocks of the ten companies in the DJIA that have the
highest combined dividend yields and buyback ratios on or about the
Stock Selection Date. The portfolio of the Global Target 15 Portfolio
consists primarily of common stocks of the five companies with the
lowest per share stock price of the ten companies in each of the DJIA,
the Financial Times Industrial Ordinary Share Index ("FT Index") and the
Hang Seng Index, respectively, that have the highest dividend yield in
the respective index on or about the Stock Selection Date. The portfolio
of the S&P Target 10 Portfolio consists primarily of the common stocks
of the ten companies selected from a pre-screened subset of the stocks
included in the Standard & Poor's 500 Composite Stock Price Index ("S&P
500 Index") on or about the Stock Selection Date. The portfolio of the
First Trust 10 Uncommon Values Portfolio is primarily the ten common
stocks selected annually by the Investment Policy Committee of Lehman
Brothers, Inc. with the assistance of the Research Department of Lehman
Brothers which, in the opinion of Lehman Brothers, have the greatest
potential for capital appreciation during the next year. Finally, the

Page 13

NASDAQ Target 15 Portfolio consists primarily of the common stocks of
fifteen companies selected from a pre-screened subset of the stocks
included in the Nasdaq-100 Index on or about the Stock Selection Date.
Each year, as discussed in the Prospectus, the portfolio of each Fund is
adjusted in accordance with its investment strategy. See "Fund Overview"
in the Prospectus for the relevant Fund for a more detailed description
of its investment strategy.

The dividend yield for each equity security contained in the Dow Target
5 Portfolio, Dow DART 10 Portfolio, S&P Target 10 Portfolio, NASDAQ
Target 15 Portfolio and the securities based on the DJIA in the Global
Target 15 Portfolio is calculated by annualizing the last quarterly or
semi-annual ordinary dividend declared and dividing the result by the
market value of such equity security on or about the Stock Selection
Date. The yield for each equity security listed on the FT Index or the
Hang Seng Index in the Global Target 15 Portfolio is calculated by
adding together the most recent interim and final dividend declared and
dividing the result by the market value of such equity security on or
about the Stock Selection Date.

In addition, the publishers of the S&P 500 Index, FT Index and the Hang
Seng Index are not affiliated with First Trust and have not participated
in the creation of the Fund or the selection of the equity securities
included therein. There is, of course, no guarantee that the objective
of any Fund will be achieved.

Any changes in the components of any of the respective indices or in the
composition of the stocks listed on the New York Stock Exchange,
American Stock Exchange or Nasdaq Stock Market made after the respective
Stock Selection Date will not cause a change in the identity of the
common stocks included in the applicable Fund, including any additional
equity securities deposited thereafter until the next Stock Selection
Date when the portfolio of the each Fund will be adjusted in accordance
with its investment strategy.

Investors should note that each Fund's investment criteria is applied
and will in the future be applied to the equity securities selected for
inclusion in the Fund as of the applicable Stock Selection Date.
Additional equity securities which were originally selected through this
process may be purchased throughout the year, as investors may continue
to invest in the Fund, even though the yields on these equity securities
may have changed subsequent to the previous Stock Selection Date. These
equity securities may no longer be included in the index, or may not
meet a Fund's selection criteria at that time, and therefore, such
equity securities would no longer be chosen for inclusion in the Fund if
the selection process were to be performed again at that time.
Accordingly, the equity securities selected and the percentage
relationship among the number of shares will not change for purchases or
sales by a Fund until the next annual Stock Selection Date.

Licensing Arrangements with Lehman Brothers, Inc.

As noted in the Prospectus, the objective of the First Trust 10 Uncommon
Value Portfolio is to provide the potential for above-average capital
appreciation by investing the Fund's portfolio in the ten common stocks
selected by the Investment Policy Committee of Lehman Brothers Inc. with
the assistance of the Research Department of Lehman Brothers Inc. which,
in the opinion of Lehman Brothers Inc., have the greatest potential for
capital appreciation during the next year. The selection was based upon
a determination by Lehman Brothers Inc. that the selected stocks are
deemed to have an above-average appreciation potential against the S&P
500 Index over the 12 months following the selection of the portfolio.
The stocks included in this Fund are adjusted annually in accordance
with the new selections of Lehman Brothers for subsequent years. Lehman
Brothers Inc. is one of the leading global investment banks serving
institutional, corporate, government and high net worth individual
clients and customers. Lehman Brothers' business includes capital
raising for clients through securities underwriting and direct
placements;' corporate finance and strategic advisory services; merchant
banking; securities sales and trading; research; and the trading of
foreign exchange, derivative products and certain commodities. The Fund
is not sponsored, advised, or created by Lehman Brothers Inc. Lehman
Brothers Inc.'s only relationship to First Trust is the licensing of
certain trademarks and tradenames of Lehman Brothers Inc. and of the "10
Uncommon Values" and the sale to First Trust of research which is
determined, composed and calculated by Lehman Brothers Inc. without
regard to First Trust or the Fund. In addition, Lehman Brothers Inc. may
also receive fees for brokerage services provided to this Fund as well
as unit investment trusts sponsored by Nike Securities L.P. Lehman
Brothers Inc., in its general securities business acts, as agent or
principal in connection with the purchase and sale of equity securities,
including the equity securities held in the Fund and may act as a market
maker in certain of the equity securities.

Page 14

Description of Indices

Certain Funds invest in stocks included in the DJIA, the FT Index, the
Hang Seng Index, the Nasdaq Index, and the S&P 500 Index. The following
is a description of these indices.

The Dow Jones Industrial Average(SM)

The DJIA was first published in The Wall Street Journal in 1896.
Initially consisting of just 12 stocks, the DJIA expanded to 20 stocks
in 1916 and to its present size of 30 stocks on October 1, 1928. The
stocks are chosen by the editors of The Wall Street Journal as
representative of the broad market and of American industry. The
companies are major factors in their industries and their stocks are
widely held by individuals and institutional investors. Changes in the
components of the DJIA are made entirely by the editors of The Wall
Street Journal without consultation with the companies, the stock
exchange or any official agency. For the sake of continuity, changes are
made rarely. Most substitutions have been the result of mergers, but
from time to time, changes may be made to achieve a better
representation. The components of the DJIA may be changed at any time
for any reason. Any changes in the components of the DJIA made after the
Stock Selection Date will not cause a change in the identity of the
equity securities involved in the applicable Fund, including any equity
securities deposited in a Fund, except when the Fund is periodically
adjusted. The following is a list of the companies which currently
comprise the DJIA.

AT&T Corporation Hewlett-Packard Co.
Allied Signal International Business Machines Corporation
Aluminum Company of America International Paper Company
American Express Company Johnson & Johnson
Boeing Company McDonald's Corporation
Caterpillar Inc. Merck & Company, Inc.
Chevron Corporation Minnesota Mining & Manufacturing Company
Citigroup J.P. Morgan & Company, Inc.
Coca-Cola Company Philip Morris Companies, Inc.
Walt Disney Company Proctor & Gamble Company
E.I. du Pont de Nemours & Company Sears, Roebuck & Company
Eastman Kodak Company Union Carbide Corporation
Exxon Corporation United Technologies Corporation
General Electric Company Wal-Mart Stores, Inc.
General Motors Corporation
Goodyear Tire & Rubber Company

"Dow Jones Industrial AverageSM", "DJIASM", "Dow IndustrialsSM", "Dow
30SM," "The DowSM" and "The Dow 10SM" are service marks of Dow Jones &
Company, Inc. ("Dow Jones") and have been licensed for use for certain
purposes by First Trust. None of the Funds, including, and in
particular, The DowSM Target 5 Portfolio, and The DowSM DART 10
Portfolio, are endorsed, sold, or promoted by Dow Jones, and Dow Jones
makes no representation regarding the advisability of investing in such
products.

The Funds are not sponsored, endorsed, sold or promoted by Dow Jones.
Dow Jones makes no representation or warranty, express or implied, to a
Fund's interest holders or any member of the public regarding the
advisability of purchasing a Fund. Dow Jones' only relationship to the
Funds, American Skandia, or First Trust is the licensing of certain
copyrights, trademarks, servicemarks and service names of Dow Jones. Dow
Jones has no obligation to take the needs of American Skandia, First
Trust or variable annuity owners into consideration in determining,
composing or calculating the DJIA. Dow Jones is not responsible for and
has not participated in the determination of the terms and conditions of
the Funds, including the pricing of the Funds' interests or the amount
payable under variable annuity contracts. Dow Jones has no obligation or
liability in connection with the administration or marketing of the Fund
or any variable annuity contracts.

DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE
DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN AND DOW
JONES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSION, OR INTERRUPTIONS
THEREIN. DOW JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY A FUND, AMERICAN SKANDIA, FIRST TRUST OR VARIABLE
ANNUITY OWNERS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DOW

Page 15

JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES
NO EXPRESS OR IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE DOW JONES INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW
JONES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE,
SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

The Financial Times Industrial Ordinary Share Index

The FT Index began as the Financial News Industrial Ordinary Share Index
in London in 1935 and became the Financial Times Industrial Ordinary
Share Index in 1947. The Financial Times Ordinary Index is calculated by
FTSE International Ltd. ("FTSE"). All copyright in the Index constituent
list vests in FTSE. The FT Index is comprised of 30 common stocks chosen
by the editors of The Financial Times as representative of the British
industry and commerce. This index is an unweighted average of the share
prices of selected companies, which are highly capitalized, major
factors in their industries and their stocks are widely held by
individuals and institutional investors. Changes in the components of
the FT Index are made entirely by the editors of The Financial Times
without consultation with the companies, the stock exchange or any
official agency. For the sake of continuity, changes are made rarely.
However, on December 16, 1997, Diageo PLC and Scottish Power PLC
replaced Guinness PLC and Grand Metropolitan PLC. Most substitutions
have been the result of mergers or because of poor share performance,
but from time to time, changes may be made to achieve a better
representation. The components of the FT Index may be changed at any
time for any reason. The following stocks are currently represented in
the FT Index:

ASDA Group Glaxo Wellcome Plc
Allied Domecq Plc Granada Group Plc
BG Plc Guest Keen & Nettlefolds (GKN) Plc
BOC Group Imperial Chemical Industries Plc
BTR Plc Lloyds TSB Group Plc
Blue Circle Industries Plc Lucas Varity Plc
Boots Company Plc Marks & Spencer Plc
British Airways Plc National Westminster Bank
British Petroleum Plc Peninsular & Oriental Steam Navigation
British Telecommunications PLC Company
Cadbury Schweppes Plc Reuters Holdings
Courtaulds Plc Royal & Sun Alliance Insurance Group
Diageo Plc Scottish Power Plc
EMI Group Plc SmithKline Beecham
General Electric Company Plc Tate & Lyle Plc
Vodafone Plc

The Hang Seng Index

The Hang Seng Index was first published in 1969 and presently consists
of 33 of the stocks currently listed on the Stock Exchange of Hong Kong
Ltd. (the "Hong Kong Stock Exchange"), and it includes companies
intended to represent four major market sectors: commerce and industry,
finance, properties and utilities. The Hang Seng Index is a recognized
indicator of stock market performance in Hong Kong. It is computed on an
arithmetic basis, weighted by market capitalization, and is therefore
strongly influenced by stocks with large market capitalizations. The
Hang Seng Index is currently comprised of the companies on the following
list:

Page 16

Amoy Properties Ltd. Hong Kong and China Gas
Bank of East Asia Hong Kong Electric Holdings Ltd.
Cathay Pacific Airways Hong Kong & Shanghai Hotels, Limited
Cheung Kong Hong Kong Telecommunications Ltd.
Cheung Kong Infrastructure Hopewell Holdings
Holdings Ltd. Hutchison Whampoa
China Light & Power Hysan Development Company Ltd.
China Resources Enterprise Ltd. New World Development Co. Ltd.
China Telecom Ltd. Shanghai Industrial Holdings Ltd.
Citic Pacific Shangri-La Asia Ltd.
First Pacific Company Ltd. Sino Land Co. Ltd.
Great Eagle Holdings Ltd. Sun Hung Kai Properties Ltd.
Guangdong Investment Swire Pacific (A)
HSBC Holdings Plc Television Broadcasts
Hang Lung Development Company Wharf Holdings Ltd.
Hang Seng Bank Wheelock & Co.
Henderson Investment Ltd.
Henderson Land Development Co. Ltd.

Except as previously described, neither the publishers of the S&P 500
Index, DJIA, FT Index nor the Hang Seng Index have granted the Funds,
American Skandia, or First Trust a license to use their respective
Index. The Funds are not designed so that prices will parallel or
correlate with the movements in any particular index or a combination
thereof and it is expected that their prices will not parallel or
correlate with such movements. The publishers of the S&P 500 Index,
DJIA, FT Index and the Hang Seng Index have not participated in any way
in the creation of the Funds or in the selection of stocks in the Funds
and have not approved any information related thereto.

The Nasdaq - 100 Index

The Nasdaq - 100 Index represents the largest and most active non-
financial domestic and international issues listed on the Nasdaq Stock
Market****Times:xae****. The index is calculated based on a modified
capitalization weighted methodology. The Nasdaq Stock Market lists
nearly 5,400 companies and trades more shares per day than any other
major U.S. market.

The NASDAQ Target 15 Portfolio is not sponsored, endorsed, sold or
promoted by The Nasdaq Stock Market, Inc. (including its affiliates)
(Nasdaq, with its affiliates are referred to as the "Corporations"). The
Corporations have not passed on the legality or suitability of, or the
accuracy or adequacy of descriptions and disclosures relating to, the
Nasdaq Target 15 Portfolio. The Corporations make no representation or
warranty, express or implied to the owners of the Nasdaq Target 15
Portfolio or any member of the public regarding the advisability of
investing in securities generally or in the Fund particularly, or the
ability of the Nasdaq 100 Index****Times:xae**** to track general stock
market performance. The Corporations' only relationship to First Trust
(the "Licensee") is in the licensing of the Nasdaq 100****Times:xae****,
Nasdaq 100 Index****Times:xae**** and Nasdaq****Times:xae**** trademarks
or service marks, and certain trade names of the corporations and the
use of the Nasdaq 100 Index****Times:xae**** which is determined,
composed and calculated by Nasdaq without regard to Licensee or the
Fund. Nasdaq has no obligation to take the needs of the Licensee or the
owners of the Nasdaq Target 15 Portfolio into consideration in
determining, composing or calculating the Nasdaq 100
Index****Times:xae****. The Corporations are not responsible for and
have not participated in the determination of the timing of, prices at,
or quantities of the Fund to be issued or in the determination or
calculation of the equation by which the Fund is to be converted into
cash. The corporations have not liability in connection with the
administration, marketing or trading of the Fund.

THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ 100 INDEX(R) OR ANY DATA INCLUDED THEREIN.
THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS
TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S) OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF THE NASDAQ 100 INDEX(R) OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ 100 INDEX(R) OR ANY DATA
INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT
SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR
SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES, EVEN
IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Page 17

The Standard & Poor's 500 Index

The S&P Target 10 Portfolio is not sponsored, endorsed, sold or promoted
by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
("S&P"). S&P makes no representation or warranty, express or implied, to
the owners of the S&P Target 10 Portfolio or any member of the public
regarding the advisability or investing in securities generally or in
the S&P Target 10 Portfolio particularly or the ability of the S&P 100
Index to track general stock market performance. S&P's only relationship
to First Trust is the licensing of certain trademarks and trade names of
S&P and of the S&P 500 Index which is determined, composed and
calculated by S&P without regard to First Trust or the S&P Target 10
Portfolio. S&P has no obligation to take the needs of First Trust or the
owners of the S&P Target 10 Portfolio into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for
and has not participated in the determination for the prices and amount
of the S&P Target 10 Portfolio or the timing of the issuance or sale of
the Fund or in the determination or calculation of the equation by which
the Fund is to be converted into cash. S&P has no obligation or
liability in connection with the administration, marketing or trading of
the Fund.

S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY
FOR ANY ERRORS, OMISSION OR INTERRUPTIONS THEREIN. S&P MAKES NO
WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE,
OWNERS OF THE PRODUCT OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT
TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY
SPECIAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

Investment Risks

Generally

An investment in a Fund should be made with an understanding of the
risks which an investment in common stocks entails, including the risk
that the financial condition of the issuers of the equity securities or
the general condition of the common stock market may worsen and the
value of the equity securities and therefore the value of a Fund may
decline. A Fund may not be an appropriate investment for those who are
unable or unwilling to assume the risks involved generally with an
equity investment. The past market and earnings performance of any of
the equity securities included in a Fund is not predictive of their
future performance. Common stocks are especially susceptible to general
stock market movements and to volatile increases and decreases of value
as market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations
regarding government, economic, monetary and fiscal policies, inflation
and interest rates, economic expansion or contraction, and global or
regional political economic or banking crises. First Trust cannot
predict the direction or scope of any of these factors. Shareholders of
common stocks have rights to receive payments from the issuers of those
common stocks that are generally subordinate to those of creditors of,
or holders of debt obligations or preferred stocks of, such issuers.
Shareholders of common stocks of the type held by a Fund have a right to
receive dividends only when and if, and in the amounts, declared by the
issuer's board of directors and have a right to participate in amounts
available for distribution by the issuer only after all other claims on
the issuer have been paid or provided for. Common stocks do not
represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital
as do debt securities. The issuance of additional debt securities or
preferred stock will create prior claims for payment of principal,
interest and dividends which could adversely affect the ability and
inclination of the issuer to declare or pay dividends on its common
stock or the rights of holders of common stock with respect to assets of
the issuer upon liquidation or bankruptcy. The value of common stocks is

Page 18

subject to market fluctuations for as long as the common stocks remain
outstanding, and thus the value of the equity securities in a Fund will
fluctuate over the life of the Fund and may be more or less than the
price at which they were purchased by such Fund. The equity securities
held in a Fund may appreciate or depreciate in value (or pay dividends)
depending on the full range of economic and market influences affecting
these securities, including the impact of the Fund's purchase and sale
of the equity securities and other factors.

Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends and
any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.

First Trust shall not be liable in any way for any default, failure or
defect in any equity security held in a Fund's portfolio.

Year 2000

There is concern that some computer systems used today are unable to
process and calculate date-related information because they are not
programmed to distinguish between the year 2000 and the year 1900. This
is commonly known as the "Year 2000 Problem."

Each Fund relies entirely on outside service providers for the
processing of its business. To the extent that a service provider
utilizes computers to process a Fund's business, the smooth operation of
a Fund depends on the ability of those computers to continue to function
properly.

The Registrant has contacted each of its service providers to ascertain
the service provider's state of readiness for the year 2000. Each of the
service providers has indicated to the Registrant that, at this time, it
is either Year 2000 compliant or that it has identified its systems
which are not currently Year 2000 compliant and that it intends to make
such systems compliant before December 31, 1999. The Registrant intends
to continue to monitor the Year 2000 status of its service providers.

Based on the information currently available, the Registrant does not
anticipate any material impact on the delivery of services to and by the
Registrant. However, since the Registrant must rely on the information
provided to it by its service providers, there can be no assurance that
the steps taken by the service providers in preparation for the Year
2000 will be sufficient to avoid any adverse impact on the Registrant.

The Year 2000 Problem is expected to impact corporations, which may
involve issuers of the equity securities contained in a Fund, to varying
degrees based upon various factors, including, but not limited to, their
industry sector and degree of technological sophistication. First Trust
is not able to predict what impact, if any, the Year 2000 Problem will
have on issuers of the equity securities contained in a Fund.

Legislation

At any time after the date of the Prospectus, legislation may be enacted
that could negatively affect the equity securities in a Fund or the
issuers of the equity securities. Changing approaches to regulation,
particularly with respect to the environment or with respect to the
petroleum industry, may have a negative impact on certain companies
represented in a Fund. There can be no assurance that future
legislation, regulation or deregulation will not have a material adverse
effect on a Fund or will not impair the ability of the issuers of the
equity securities held in a Fund to achieve their business goals.

Liquidity

Whether or not the equity securities in a Fund are listed on a
securities exchange, the principal trading market for the equity
securities may be in the over-the-counter market. As a result, the
existence of a liquid trading market for the equity securities may
depend on whether dealers will make a market in the equity securities.
There can be no assurance that a market will be made for any of the
equity securities, that any market for the equity securities will be
maintained or that there will be sufficient liquidity of the equity
securities in any markets made. The price at which the equity securities

Page 19

held in a Fund may be sold to meet transfers, partial withdrawals or
surrenders and the value of a Fund will be adversely affected if trading
markets for the equity securities are limited or absent.

Lack of Diversification

Each Fund is classified as "non-diversified" and therefore a Fund is
only limited as to the percentage of its assets which may be invested in
securities of any one issuer by its own investment restrictions and by
diversification requirements imposed by the Internal Revenue Code of
1986, as amended. A Fund may therefore invest a relatively high
percentage of its assets in a limited number of issuers. This can expose
each Fund to potentially greater market fluctuations than might be
experienced by a diversified fund. Each Fund may be more susceptible to
any single economic, political or regulatory occurrence and to the
financial conditions of the issuer in which it invests. For example, an
investment in the Dow Target 5 Portfolio may subject an investor to
additional risk due to the relative lack of diversity in its portfolio
since the portfolio contains only five stocks. Therefore, the Dow Target
5 Portfolio may be subject to greater market risk than other Funds which
may contain a more diversified portfolio of securities. A Fund is not
designed to be a complete investment program for an investor. Variable
annuity Policy owners, in light of their own financial situations and
goals, should consider other additional funding options in order to
diversify the allocations of their Policy assets.

Small Capitalization Companies

Certain or all of the equity securities in the First Trust 10 Uncommon
Values Portfolio and certain securities in the Sector Funds, may be
small cap company stocks. While, historically, small cap company stocks
have outperformed the stocks of large companies, the former have
customarily involved more investment risk as well. Small cap companies
may have limited product lines, markets or financial resources; may lack
management depth or experience; and may be more vulnerable to adverse
general market or economic developments than large companies. Some of
these companies may distribute, sell or produce products which have
recently been brought to market and may be dependent on key personnel.

The prices of small company securities are often more volatile than
prices associated with large company issues, and can display abrupt or
erratic movements at times, due to limited trading volumes and less
publicly available information. Also, because small cap companies
normally have fewer shares outstanding and these shares trade less
frequently than large companies, it may be more difficult for a Fund
which contain these equity securities to buy and sell significant
amounts of such shares without an unfavorable impact on prevailing
market prices. The securities of small companies are often traded over-
the-counter and may not be traded in the volumes typical of a national
securities exchange.

Litigation

Certain of the issuers of equity securities in certain Funds may be
involved in the manufacture, distribution and sale of tobacco products.
Pending litigation proceedings against such issuers in the United States
and abroad cover a wide range of matters including product liability and
consumer protection. Damages claimed in such litigation alleging
personal injury (both individual and class actions), and in health cost
recovery cases brought by governments, labor unions and similar entities
seeking reimbursement for health care expenditures, aggregate many
billions of dollars.

In November 1998, certain companies in the U.S. tobacco industry,
including Philip Morris, entered into a negotiated settlement with
several states which would result in the resolution of significant
litigation and regulatory issues affecting the tobacco industry
generally. The proposed settlement, while extremely costly to the
tobacco industry, would significantly reduce uncertainties facing the
industry and increase stability in business and capital markets. Future
litigation and/or legislation could adversely affect the value,
operating revenues and financial position of tobacco companies.

To the best of First Trust's knowledge, other than tobacco litigation,
there is no litigation pending as of the date of this Statement of
Additional Information with respect to any equity security which might
reasonably be expected to have a material adverse effect on a Fund. At
any time after the date of this Statement of Additional Information,
litigation may be instituted on a variety of grounds with respect to the
equity securities held in a Fund portfolio. First Trust is unable to
predict whether any such litigation will be instituted, or if
instituted, whether such litigation might have a material adverse effect
on the Fund.

Page 20

Additional Strategy Fund Risks

The equity securities selected for The Dow(SM) Target 5 Portfolio, The
Dow(SM) DART 10 Portfolio and Global Target 15 Portfolio generally share
attributes that have caused them to have lower prices or higher yields
relative to other stocks in their respective index or Exchange. The
equity securities may, for example, be experiencing financial
difficulty, or be out of favor in the market because of weak
performance, poor earnings forecasts or negative publicity; or they may
be reacting to general market cycles. There can be no assurance that the
market factors that caused the relatively low prices and high dividend
yields of the equity securities will change, that any negative
conditions adversely affecting the stock prices will not deteriorate,
that the dividend rates on the equity securities will be maintained or
that share prices will not decline further during the life of the Funds,
or that the equity securities will continue to be included in the
respective indices or Exchanges. Investing in stocks with the highest
dividend yields amounts to a contrarian strategy because these shares
are often out of favor. Such strategy may be effective in achieving the
respective Strategy Fund's investment objective because regular
dividends are common for established companies and dividends have often
accounted for a substantial portion of the total return on stocks of the
index as a group. However, there is no guarantee that either a Fund's
objective will be achieved or that a Fund will provide for capital
appreciation in excess of such Fund's expenses. Because of the
contrarian nature of such Funds and the attributes of the common stocks
which caused inclusion in the portfolio, such Funds may not be
appropriate for investors seeking either preservation of capital or high
current income. In addition, each of the strategies have underperformed
their respective index or indices in certain years.

Equity securities in a Strategy Fund from time to time may be sold under
certain circumstances described in the Prospectus or herein. Each
Strategy Fund, however, is not actively managed and equity securities in
a Fund will not be sold to take advantage of market fluctuations or
changes in anticipated rates of appreciation or depreciation or if the
equity securities no longer meet the criteria by which they were
selected for a Fund. However, equity securities will be sold on or about
each annual Stock Selection Date in accordance with its stock selection
strategy.

Additional Sector Fund Risks

The following is a discussion of additional risks affecting particular
Sector Funds.

Energy Sector. An investment in the energy sector should be made with an
understanding of the problems and risks such an investment may entail.

The Energy Sector Fund invests in equity securities of companies
involved in the energy industry. The business activities of companies
held in this Fund may include: production, generation, transmission,
marketing, control, or measurement of energy or energy fuels; providing
component parts or services to companies engaged in the above
activities; energy research or experimentation; and environmental
activities related to the solution of energy problems, such as energy
conservation and pollution control. Companies participating in new
activities resulting from technological advances or research discoveries
in the energy field were also considered for this Fund.

The securities of companies in the energy field are subject to changes
in value and dividend yield which depend, to a large extent, on the
price and supply of energy fuels. Swift price and supply fluctuations
may be caused by events relating to international politics, energy
conservation, the success of exploration projects, and tax and other
regulatory policies of various governments. As a result of the
foregoing, the equity securities held in this Fund may be subject to
rapid price volatility. First Trust is unable to predict what impact the
foregoing factors will have during the life of this Fund on the equity
securities held in its portfolio.

According to the U.S. Department of Commerce, the factors which will
most likely shape the energy industry include the price and availability
of oil from the Middle East, changes in United States environmental
policies and the continued decline in U.S. production of crude oil.
Possible effects of these factors may be increased U.S. and world
dependence on oil from the Organization of Petroleum Exporting Countries
("OPEC") and highly uncertain and potentially more volatile oil prices.
Factors which First Trust believes may increase the profitability of oil
and petroleum operations include increasing demand for oil and petroleum
products as a result of the continued increases in annual miles driven
and the improvement in refinery operating margins caused by increases in
average domestic refinery utilization rates. The existence of surplus
crude oil production capacity and the willingness to adjust production
levels are the two principal requirements for stable crude oil markets.
Without excess capacity, supply disruptions in some countries cannot be

Page 21

compensated for by others. Surplus capacity in Saudi Arabia and a few
other countries and the utilization of that capacity prevented, during
the Persian Gulf crisis, and continues to prevent, severe market
disruption. Although unused capacity contributed to market stability in
1990 and 1991, it ordinarily creates pressure to overproduce and
contributes to market uncertainty. The restoration of a large portion of
Kuwait and Iraq's production and export capacity could lead to such a
development in the absence of substantial growth in world oil demand.
Formerly, OPEC members attempted to exercise control over production
levels in each country through a system of mandatory production quotas.
Because of the 1990-1991 crisis in the Middle East, the mandatory system
has since been replaced with a voluntary system. Production under the
new system has had to be curtailed on at least one occasion as a result
of weak prices, even in the absence of supplies from Kuwait and Iraq.
The pressure to deviate from mandatory quotas, if they are reimposed, is
likely to be substantial and could lead to a weakening of prices. In the
longer term, additional capacity and production will be required to
accommodate the expected large increases in world oil demand and to
compensate for expected sharp drops in U.S. crude oil production and
exports from the Soviet Union. Only a few OPEC countries, particularly
Saudi Arabia, have the petroleum reserves that will allow the required
increase in production capacity to be attained. Given the large-scale
financing that is required, the prospect that such expansion will occur
soon enough to meet the increased demand is uncertain.

Declining U.S. crude oil production will likely lead to increased
dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruptions. Increasing sensitivity to
environmental concerns will also pose serious challenges to the industry
over the coming decade. Refiners are likely to be required to make heavy
capital investments and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as
the 1990 amendments to the Clean Air Act. If the cost of these changes
is substantial enough to cut deeply into profits, smaller refiners may
be forced out of the industry entirely. Moreover, lower consumer demand
due to increases in energy efficiency and conservation, gasoline
reformulations that call for less crude oil, warmer winters or a general
slowdown in economic growth in this country and abroad could negatively
affect the price of oil and the profitability of oil companies. No
assurance can be given that the demand for or prices of oil will
increase or that any increases will not be marked by great volatility.
Some oil companies may incur large cleanup and litigation costs relating
to oil spills and other environmental damage. Oil production and
refining operations are subject to extensive federal, state and local
environmental laws and regulations governing air emissions and the
disposal of hazardous materials. Increasingly stringent environmental
laws and regulations are expected to require companies with oil
production and refining operations to devote significant financial and
managerial resources to pollution control. General problems of the oil
and petroleum products industry include the ability of a few influential
producers to significantly affect production, the concomitant volatility
of crude oil prices, increasing public and governmental concern over air
emissions, waste product disposal, fuel quality and the environmental
effects of fossil-fuel use in general. In addition, any future
scientific advances concerning new sources of energy and fuels or
legislative changes relating to the energy industry or the environment
could have a negative impact on the petroleum products industry. While
legislation has been enacted to deregulate certain aspects of the oil
industry, no assurances can be given that new or additional regulations
will not be adopted. Each of the problems referred to could adversely
affect the financial stability of the issuers of any petroleum industry
stocks in this Fund.

Financial Sector. An investment in the financial services sector should
be made with an understanding of the problems and risks inherent in the
bank and financial services sector in general.

Banks, thrifts and their holding companies are especially subject to the
adverse effects of economic recession, volatile interest rates,
portfolio concentrations in geographic markets and in commercial and
residential real estate loans, and competition from new entrants in
their fields of business. Banks and thrifts are highly dependent on net
interest margin. Recently, bank profits have come under pressure as net
interest margins have contracted, but volume gains have been strong in
both commercial and consumer products. There is no certainty that such
conditions will continue. Bank and thrift institutions had received
significant consumer mortgage fee income as a result of activity in
mortgage and refinance markets. As initial home purchasing and
refinancing activity subsided, this income diminished. Economic
conditions in the real estate markets, which have been weak in the past,
can have a substantial effect upon banks and thrifts because they
generally have a portion of their assets invested in loans secured by
real estate. Banks, thrifts and their holding companies are subject to
extensive federal regulation and, when such institutions are state-
chartered, to state regulation as well. Such regulations impose strict
capital requirements and limitations on the nature and extent of
business activities that banks and thrifts may pursue. Furthermore, bank
regulators have a wide range of discretion in connection with their
supervisory and enforcement authority and may substantially restrict the
permissible activities of a particular institution if deemed to pose
significant risks to the soundness of such institution or the safety of
the federal deposit insurance fund. Regulatory actions, such as
increases in the minimum capital requirements applicable to banks and
thrifts and increases in deposit insurance premiums required to be paid

Page 22

by banks and thrifts to the Federal Deposit Insurance Corporation
("FDIC"), can negatively impact earnings and the ability of a company to
pay dividends. Neither federal insurance of deposits nor governmental
regulations, however, insures the solvency or profitability of banks or
their holding companies, or insures against any risk of investment in
the securities issued by such institutions.

The statutory requirements applicable to and regulatory supervision of
banks, thrifts and their holding companies have increased significantly
and have undergone substantial change in recent years. To a great
extent, these changes are embodied in the Financial Institutions Reform,
Recovery and Enforcement Act enacted in August 1989, the Federal Deposit
Insurance Corporation Improvement Act of 1991, the Resolution Trust
Corporation Refinancing, Restructuring, and Improvement Act of 1991 and
the regulations promulgated under these laws. Many of the regulations
promulgated pursuant to these laws have only recently been finalized and
their impact on the business, financial condition and prospects of the
equity securities in the Fund's portfolio cannot be predicted with
certainty. Periodic efforts by recent Administrations to introduce
legislation broadening the ability of banks to compete with new products
have not been successful, but if enacted could lead to more failures
such as a result of increased competition and added risks. Failure to
enact such legislation, on the other hand, may lead to declining
earnings and an inability to compete with unregulated financial
institutions. Efforts to expand the ability of federal thrifts to
branch on an interstate basis have been initially successful through
promulgation of regulations, and legislation to liberalize interstate
banking has recently been signed into law. Under the legislation, banks
will be able to purchase or establish subsidiary banks in any state, one
year after the legislation's enactment. Since mid-1997, banks have been
allowed to turn existing banks into branches. Consolidation is likely to
continue. The Securities and Exchange Commission and the Financial
Accounting Standards Board require the expanded use of market value
accounting by banks and have imposed rules requiring market accounting
for investment securities held in trading accounts or available for
sale. Adoption of additional such rules may result in increased
volatility in the reported health of the industry, and mandated
regulatory intervention to correct such problems. Additional legislative
and regulatory changes may be forthcoming. For example, the bank
regulatory authorities have proposed substantial changes to the
Community Reinvestment Act and fair lending laws, rules and regulations,
and there can be no certainty as to the effect, if any, that such
changes would have on the equity securities in the Fund's portfolio. In
addition, from time to time the deposit insurance system is reviewed by
Congress and federal regulators, and proposed reforms of that system
could, among other things, further restrict the ways in which deposited
moneys can be used by banks or reduce the dollar amount or number of
deposits insured for any depositor. Such reforms could reduce
profitability such as investment opportunities available to bank
institutions become more limited and as consumers look for savings
vehicles other than bank deposits. Banks and thrifts face significant
competition from other financial institutions such as mutual funds,
credit unions, mortgage banking companies and insurance companies, and
increased competition may result from legislative broadening of regional
and national interstate banking powers as has been recently enacted.
Among other benefits, the legislation allows banks and bank holding
companies to acquire across previously prohibited state lines and to
consolidate their various bank subsidiaries into one unit. First Trust
makes no prediction as to what, if any, manner of bank and thrift
regulatory actions might ultimately be adopted or what ultimate effect
such actions might have on the Fund's portfolio.

The Federal Bank Holding Company Act of 1956 generally prohibits a bank
holding company from (1) acquiring, directly or indirectly, more than
25% of the outstanding shares of any class of voting securities of a
bank or bank holding company, (2) acquiring control of a bank or another
bank holding company, (3) acquiring all or substantially all the assets
of a bank, or (4) merging or consolidating with another bank holding
company, without first obtaining Federal Reserve Board ("FRB") approval.
In considering an application with respect to any such transaction, the
FRB is required to consider a variety of factors, including the
potential anti-competitive effects of the transaction, the financial
condition and future prospects of the combining and resulting
institutions, the managerial resources of the resulting institution, the
convenience and needs of the communities the combined organization would
serve, the record of performance of each combining organization under
the Community Reinvestment Act and the Equal Credit Opportunity Act, and
the prospective availability to the FRB of information appropriate to
determine ongoing regulatory compliance with applicable banking laws. In
addition, the federal Change In Bank Control Act and various state laws
impose limitations on the ability of one or more individuals or other
entities to acquire control of banks or bank holding companies.

The FRB has issued a policy statement on the payment of cash dividends
by bank holding companies. In the policy statement, the FRB expressed
its view that a bank holding company experiencing earnings weaknesses
should not pay cash dividends which exceed its net income or which could
only be funded in ways that would weaken its financial health, such as
by borrowing. The FRB also may impose limitations on the payment of
dividends as a condition to its approval of certain applications,

Page 23

including applications for approval of mergers and acquisitions. First
Trust makes no prediction as to the effect, if any, such laws will have
on the equity securities in this Sector or whether such approvals, if
necessary, will be obtained.

Some of the nation's largest banks, working to upgrade their own
computer systems to meet the Year 2000 deadline, are concerned that some
borrowers may fail to upgrade their computers in time, creating problem
loans and increasing overall loan losses. Banks considered most
vulnerable by analysts include those lending primarily to small
businesses, which are not as likely as large businesses to have a plan
for upgrading their computer. Also at risk are banks with significant
exposure overseas, where many foreign businesses are not moving as
quickly to resolve this problem. Analysts warn that it will be difficult
for banks to determine their potential loan losses related to Year 2000
credit risk.

Companies involved in the insurance industry are engaged in
underwriting, reinsuring, selling, distributing or placing of property
and casualty, life or health insurance. Other growth areas within the
insurance industry include brokerage, reciprocals, claims processors and
multiline insurance companies. Insurance company profits are affected by
interest rate levels, general economic conditions, and price and
marketing competition. Property and casualty insurance profits may also
be affected by weather catastrophes and other disasters. Life and health
insurance profits may be affected by mortality and morbidity rates.
Individual companies may be exposed to material risks including reserve
inadequacy and the inability to collect from reinsurance carriers.
Insurance companies are subject to extensive governmental regulation,
including the imposition of maximum rate levels, which may not be
adequate for some lines of business. Proposed or potential tax law
changes may also adversely affect insurance companies' policy sales, tax
obligations, and profitability. In addition to the foregoing, profit
margins of these companies continue to shrink due to the commoditization
of traditional businesses, new competitors, capital expenditures on new
technology and the pressures to compete globally.

In addition to the normal risks of business, companies involved in the
insurance industry are subject to significant risk factors, including
those applicable to regulated insurance companies, such as: (i) the
inherent uncertainty in the process of establishing property-liability
loss reserves, particularly reserves for the cost of environmental,
asbestos and mass tort claims, and the fact that ultimate losses could
materially exceed established loss reserves which could have a material
adverse effect on results of operations and financial condition; (ii)
the fact that insurance companies have experienced, and can be expected
in the future to experience, catastrophe losses which could have a
material adverse impact on their financial condition, results of
operations and cash flow; (iii) the inherent uncertainty in the process
of establishing property-liability loss reserves due to changes in loss
payment patterns caused by new claims settlement practices; (iv) the
need for insurance companies and their subsidiaries to maintain
appropriate levels of statutory capital and surplus, particularly in
light of continuing scrutiny by rating organizations and state insurance
regulatory authorities, and in order to maintain acceptable financial
strength or claims-paying ability rating; (v) the extensive regulation
and supervision to which insurance companies' subsidiaries are subject,
various regulatory initiatives that may affect insurance companies, and
regulatory and other legal actions; (vi) the adverse impact that
increases in interest rates could have on the value of an insurance
company's investment portfolio and on the attractiveness of certain of
its products; (vii) the need to adjust the effective duration of the
assets and liabilities of life insurance operations in order to meet the
anticipated cash flow requirements of its policyholder obligations, and
(vii) the uncertainty involved in estimating the availability of
reinsurance and the collectibility of reinsurance recoverables.

The state insurance regulatory framework has, during recent years, come
under increased federal scrutiny, and certain state legislatures have
considered or enacted laws that alter and, in many cases, increase state
authority to regulate insurance companies and insurance holding company
systems. Further, the National Association of Insurance Commissioners
("NAIC") and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance companies,
interpretations of existing laws and the development of new laws. In
addition, Congress and certain federal agencies have investigated the
condition of the insurance industry in the United States to determine
whether to promulgate additional federal regulations. First Trust is
unable to predict whether any state or federal legislation will be
enacted to change the nature or scope of regulation of the insurance
industry, or what effect, if any, such legislation would have on the
industry.

All insurance companies are subject to state laws and regulations that
require diversification of their investment portfolios and limit the
amount of investments in certain investment categories. Failure to
comply with these laws and regulations could cause non-conforming
investments to be treated as non-admitted assets for purposes of
measuring statutory surplus and, in some instances, would require
divestiture.

Page 24

Environmental pollution clean-up is the subject of both federal and
state regulation. By some estimates, there are thousands of potential
waste sites subject to clean up. The insurance industry is involved in
extensive litigation regarding coverage issues. The Comprehensive
Environmental Response Compensation and Liability Act of 1980
("Superfund") and comparable state statutes ("mini-Superfund") govern
the clean-up and restoration by "Potentially Responsible Parties"
("PRP's"). Superfund and the mini- Superfunds ("Environmental Clean-up
Laws" or "ECLs") establish a mechanism to pay for clean-up of waste
sites if PRPs fail to do so, and to assign liability to PRPs. The extent
of liability to be allocated to a PRP is dependent on a variety of
factors. Further, the number of waste sites subject to clean-up is
unknown. Very few sites have been subject to clean-up to date. The
extent of clean-up necessary and the assignment of liability has not
been established. The insurance industry is disputing many such claims.
Key coverage issues include whether Superfund response costs are
considered damages under the policies, when and how coverage is
triggered, applicability of pollution exclusions, the potential for
joint and several liability and definition of an occurrence. Similar
coverage issues exist for clean up and waste sites not covered under
Superfund. To date, courts have been inconsistent in their rulings on
these issues. An insurer's exposure to liability with regard to its
insureds which have been, or may be, named as PRPs is uncertain.
Superfund reform proposals have been introduced in Congress, but none
have been enacted. There can be no assurance that any Superfund reform
legislation will be enacted or that any such legislation will provide
for a fair, effective and cost-efficient system for settlement of
Superfund related claims.

Proposed federal legislation which would permit banks greater
participation in the insurance business could, if enacted, present an
increased level of competition for the sale of insurance products. In
addition, while current federal income tax law permits the tax-deferred
accumulation of earnings on the premiums paid by an annuity owner and
holders of certain savings-oriented life insurance products, no
assurance can be given that future tax law will continue to allow such
tax deferrals. If such deferrals were not allowed, consumer demand for
the affected products would be substantially reduced. In addition,
proposals to lower the federal income tax rates through a form of flat
tax or otherwise could have, if enacted, a negative impact on the demand
for such products.

Companies engaged in investment banking/brokerage and investment
management include brokerage firms, broker/dealers, investment banks,
finance companies and mutual fund companies. Earnings and share prices
of companies in this industry are quite volatile, and often exceed the
volatility levels of the market as a whole. Recently, ongoing
consolidation in the industry and the strong stock market has benefited
stocks which investors believe will benefit from greater investor and
issuer activity. Major determinants of future earnings of these
companies are the direction of the stock market, investor confidence,
equity transaction volume, the level and direction of long-term and
short-term interest rates, and the outlook for emerging markets.
Negative trends in any of these earnings determinants could have a
serious adverse effect on the financial stability, as well as on the
stock prices, of these companies. Furthermore, there can be no assurance
that the issuers of the equity securities included in this Fund will be
able to respond in a timely manner to compete in the rapidly developing
marketplace. In addition to the foregoing, profit margins of these
companies continue to shrink due to the commoditization of traditional
businesses, new competitors, capital expenditures on new technology and
the pressures to compete globally.

Pharmaceutical Sector. An investment in the pharmaceutical sector should
be made with an understanding of the characteristics of the
pharmaceutical industry and the risks which such investment may entail.

Pharmaceutical companies are companies involved in drug development and
production services. In addition, they are well known for the vast
amounts of money they spend on world-class research and development. In
short, such companies work to improve the quality of life for millions
of people and are vital to the nation's health and well-being. Such
companies have potential risks unique to their sector of the healthcare
field. Such companies are subject to governmental regulation of their
products and services, a factor which could have a significant and
possibly unfavorable effect on the price and availability of such
products or services. Furthermore, such companies face the risk of
increasing competition from generic drug sales, the termination of their
patent protection for drug products and the risk that technological
advances will render their products or services obsolete. The research
and development costs of bringing a drug to market are substantial and
include lengthy government review processes, with no guarantee that the
product will ever come to market. Many of these companies may have
losses and not offer certain products for several years. Such companies
may also have persistent losses during a new product's transition from
development to production, and revenue patterns may be erratic.

Page 25

As the population of the United States ages, the companies involved in
the pharmaceutical field will continue to search for and develop new
drugs through advanced technologies and diagnostics. On a worldwide
basis, such companies are involved in the development and distribution
of drugs and vaccines. These activities may make the pharmaceutical
sector very attractive for investors seeking the potential for growth in
their investment portfolio. However, there are no assurances that the
Fund's objectives will be met.

Legislative proposals concerning healthcare are considered from time to
time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of
prescription drugs), national health insurance, incentives for
competition in the provisions of healthcare services, tax incentives and
penalties related to healthcare insurance premiums and promotion of
prepaid healthcare plans. First Trust is unable to predict the effect of
any of these proposals, if enacted, on the issuers of equity securities
in the Fund.

Technology/Internet Sectors. An investment in the technology and
internet sectors should be made with an understanding of the
characteristics of the technology industry and the risks which such an
investment may entail.

Technology companies generally include companies involved in the
development, design, manufacture and sale of computers, computer-related
equipment, computer networks, communications systems, telecommunications
products, electronic products and other related products, systems and
services. The market for these products, especially those specifically
related to the Internet, is characterized by rapidly changing
technology, rapid product obsolescence, cyclical market patterns,
evolving industry standards and frequent new product introductions. The
success of the issuers of the equity securities included in this Sector
depends in substantial part on the timely and successful introduction of
new products. An unexpected change in one or more of the technologies
affecting an issuer's products or in the market for products based on a
particular technology could have a material adverse affect on an
issuer's operating results. Furthermore, there can be no assurance that
the issuers of the equity securities included in this Sector will be
able to respond in a timely manner to compete in the rapidly developing
marketplace.

Based on trading history of common stock, factors such as announcements
of new products or development of new technologies and general
conditions of the industry have caused and are likely to cause the
market price of high- technology common stocks to fluctuate
substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to
the operating performance of such companies. This market volatility may
adversely affect the market price of the equity securities held in this
Fund.

Some key components of certain products of technology issuers are
currently available only from single sources. There can be no assurance
that in the future suppliers will be able to meet the demand for
components in a timely and cost effective manner. Accordingly, an
issuer's operating results and customer relationships could be adversely
affected by either an increase in price for, or an interruption or
reduction in supply of, any key components. Additionally, many
technology issuers are characterized by a highly concentrated customer
base consisting of a limited number of large customers who may require
product vendors to comply with rigorous industry standards. Any failure
to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies of technology
companies are incorporated into other related products, such companies
are often highly dependent on the performance of the personal computer,
electronics and telecommunications industries. There can be no assurance
that these customers will place additional orders, or that an issuer of
equity securities held by this Fund will obtain orders of similar
magnitude such as past orders from other customers. Similarly, the
success of certain technology companies is tied to a relatively small
concentration of products or technologies. Accordingly, a decline in
demand of such products, technologies or from such customers could have
a material adverse impact on issuers of equity securities held in this
Fund.

Many technology companies rely on a combination of patents, copyrights,
trademarks and trade secret laws to establish and protect their
proprietary rights in their products and technologies. There can be no
assurance that the steps taken by the issuers of the equity securities
held by this Fund to protect their proprietary rights will be adequate
to prevent misappropriation of their technology or that competitors will
not independently develop technologies that are substantially equivalent
or superior to such issuers' technology. In addition, due to the
increasing public use of the Internet, it is possible that other laws
and regulations may be adopted to address issues such as privacy,
pricing, characteristics, and quality of Internet products and services.
For example, recent proposals would prohibit the distribution of
obscene, lascivious or indecent communications on the Internet. The
adoption of any such laws could have a material adverse impact on the
equity securities in the Fund.

Page 26

Additional Foreign Issuer Risks

Since certain of the portfolio securities included in the Global Target
15 Portfolio, NASDAQ Target 15 Portfolio, First Trust 10 Uncommon Values
Portfolio and the Sector Funds may consist of common stocks of foreign
issuers, an investment in such Fund involves certain investment risks
that are different in some respects from an investment in a fund which
invests entirely in common stocks of domestic issuers. These investment
risks include the possible imposition of future political or
governmental restrictions which might adversely affect the payment or
receipt of dividends on the relevant portfolio securities, the
possibility that the financial condition of the issuers of the portfolio
securities may become impaired or that the general condition of the
relevant stock market may deteriorate, the limited liquidity and
relatively small market capitalization of the relevant securities
market, the imposition of expropriation or confiscatory taxation,
economic uncertainties, the lack of the quantity and quality of publicly
available information concerning the foreign issuers as such issuers are
generally not subject to the same reporting and accounting requirements
as domestic issuers, and the effect of foreign currency devaluations,
such as the current global currency crisis, and fluctuations on the
value of the common stocks and dividends of foreign issuers in terms of
U.S. dollars. In addition, fixed brokerage commissions and other
transaction costs on foreign securities exchanges are generally higher
than in the United States and there is generally less government
supervision and regulation of exchanges, brokers and issuers in foreign
countries than there is in the United States.

On the basis of the best information available to First Trust at the
present time, none of the portfolio securities in such Funds are
currently subject to exchange control restrictions under existing law
which would materially interfere with payment to such Funds of dividends
due on, or proceeds from the sale of, the foreign portfolio securities.
The adoption of such restrictions or other legal restrictions could
adversely impact the marketability of the foreign portfolio securities
and may impair the ability of such Funds to satisfy its obligation to
redeem shares or could cause delays or increase the costs associated
with the purchase and sale of the foreign portfolio securities and
correspondingly affect the price of its shares.

The purchase and sale of the foreign portfolio securities will generally
be made in foreign securities markets. Although First Trust does not
believe that the Funds will encounter obstacles in acquiring or
disposing of the foreign portfolio securities, investors should be aware
that in certain situations it may not be possible to purchase or sell a
foreign portfolio security in a timely manner for any number of reasons,
including lack of liquidity in the relevant market, the unavailability
of a seller or purchaser of the foreign portfolio securities, and
restrictions on such purchases or sales by reason of federal securities
laws or otherwise. An investment in such Funds will also be subject to
the risks of currency fluctuations associated with investments in
foreign equity securities trading in non-U.S. currencies.

Certain of the equity securities in Global Target 15 Portfolio, NASDAQ
Target 15 Portfolio, First Trust 10 Uncommon Values Portfolio and the
Sector Funds may be in ADR or GDR form. ADRs, which evidence American
Depositary Receipts and GDRs, which evidence Global Depositary Receipts,
represent common stock deposited with a custodian in a depositary.
American Depositary Shares and Global Depositary Shares (collectively,
the "Depositary Receipts") are issued by a bank or trust company to
evidence ownership of underlying securities issued by a foreign
corporation. These instruments may not necessarily be denominated in the
same currency as the securities into which they may be converted. For
purposes of the discussion herein, the terms ADR and GDR generally
include American Depositary Shares and Global Depositary Shares,
respectively.

Depositary Receipts may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the
request of market makers and acts as agent for the Depositary Receipts
holder, while the company itself is not involved in the transaction. In
a sponsored facility, the issuing company initiates the facility and
agrees to pay certain administrative and shareholder-related expenses.
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary;
unsponsored facilities involve several depositaries with no contractual
relationship to the company. The depositary bank that issues Depositary
Receipts generally charges a fee, based on the price of the Depositary
Receipts, upon issuance and cancellation of the Depositary Receipts.
This fee would be in addition to the brokerage commissions paid upon the
acquisition or surrender of the security. In addition, the depositary
bank incurs expenses in connection with the conversion of dividends or
other cash distributions paid in local currency into U.S. dollars and
such expenses are deducted from the amount of the dividend or
distribution paid to holders, resulting in a lower payout per underlying
share represented by the Depositary Receipts than would be the case if
the underlying share were held directly. Certain tax considerations,
including tax rate differentials and withholding requirements, arising

Page 27

from applications of the tax laws of one nation to nationals of another
and from certain practices in the Depositary Receipts market may also
exist with respect to certain Depositary Receipts. In varying degrees,
any or all of these factors may affect the value of the Depositary
Receipts compared with the value of the underlying shares in the local
market. In addition, the rights of holders of Depositary Receipts may be
different than those of holders of the underlying shares, and the market
for Depositary Receipts may be less liquid than that for the underlying
shares. Depositary Receipts are registered securities pursuant to the
Securities Act of 1933 and may be subject to the reporting requirements
of the Securities Exchange Act of 1934.

For the equity securities that are Depositary Receipts, currency
fluctuations will affect the U.S. dollar equivalent of the local
currency price of the underlying domestic shares and, as a result, are
likely to affect the value of the Depositary Receipts and consequently
the value of the equity securities. The foreign issuers of securities
that are Depositary Receipts may pay dividends in foreign currencies
which must be converted into dollars. Most foreign currencies have
fluctuated widely in value against the United States dollar for many
reasons, including supply and demand of the respective currency, the
soundness of the world economy and the strength of the respective
economy as compared to the economies of the United States and other
countries. Therefore, for any securities of issuers (whether or not they
are in Depositary Receipt form) whose earnings are stated in foreign
currencies, or which pay dividends in foreign currencies or which are
traded in foreign currencies, there is a risk that their United States
dollar value will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies.

The information provided below details certain important factors which
impact the economies of both the United Kingdom and Hong Kong. This
information has been extracted from various governmental and private
publications, but no representation can be made as to its accuracy.
Furthermore, no representation is made that any correlation exists
between the economies of the United Kingdom and Hong Kong and the value
of the equity securities held by the Global Target 15 Portfolio.

United Kingdom. The emphasis of the United Kingdom's economy is in the
private services sector, which includes the wholesale and retail sector,
banking, finance, insurance and tourism. Services as a whole account for
a majority of the United Kingdom's gross national product and make a
significant contribution to the country's balance of payments. The
portfolio of the Global Target 15 Portfolio may contain common stocks of
British companies engaged in such industries as banking, chemicals,
building and construction, transportation, telecommunications and
insurance. Many of these industries may be subject to government
regulation, which may have a materially adverse effect on the
performance of their stock. In the first quarter of 1998, gross domestic
product (GDP) of the United Kingdom grew to a level 3.0% higher than in
the first quarter of 1997; however, the overall rate of GDP growth has
slowed since the third quarter of 1997. The slowdown largely reflects a
deteriorating trade position and higher indirect taxes. The average
quarterly rate of GDP growth in the United Kingdom (as well as in Europe
generally) has been decelerating since 1994. The United Kingdom is a
member of the European Union (the "EU"), which was created through the
formation of the Maastricht Treaty on European Union in late 1993. It is
expected that the Treaty will have the effect of eliminating most
remaining trade barriers between the 15 member nations and make Europe
one of the largest common markets in the world. However, the effective
implementation of the treaty provisions and the rate at which trade
barriers are eliminated is uncertain at this time. Furthermore, the
recent rapid political and social change throughout Europe make the
extent and nature of future economic development in the United Kingdom
and Europe and the impact of such development upon the value of the
portfolio securities issued by United Kingdom companies held in the
Global Target 15 Portfolio impossible to predict.

A majority of the EU members converted their existing sovereign
currencies to a common currency (the "euro") on January 1, 1999. The
United Kingdom did not participate in the conversion on January 1, 1999
and First Trust is unable to predict if or when the United Kingdom will
convert to the euro. Moreover, it is not possible to accurately predict
the effect of the current political and economic situation upon long-
term inflation and balance of trade cycles and how these changes, as
well as the implementation of a common currency throughout a majority of
EU countries, would affect the currency exchange rate between the U.S.
dollar and the British pound sterling. In addition, United Kingdom
companies with significant markets or operations in other European
countries (whether or not such countries are participating) face
strategic challenges as these entities adapt to a single trans-national
currency. The euro conversion may have a material impact on revenues,
expenses or income from operations; increase competition due to the
increased price transparency of EU markets; affect issuers' currency
exchange rate risk and derivatives exposure; disrupt currency contracts;
cause issuers to increase spending on information technology updates
required for the conversion; and result in potential adverse tax
consequences. First Trust is unable to predict what impact, if any, the

Page 28

euro conversion will have on any of the portfolio securities issued by
United Kingdom companies in the Global Target 15 Portfolio.

Hong Kong. Hong Kong, established as a British colony in the 1840's,
reverted to Chinese sovereignty effective July 1, 1997. On such date,
Hong Kong became a Special Administrative Region ("SAR") of China. Hong
Kong's new constitution is the Basic Law (promulgated by China in 1990).
Prior to July 1, 1997, the Hong Kong government followed a laissez-faire
policy toward industry. However, Hong Kong's recent economic data has
not been encouraging. The full impact of the Asian financial crisis, as
well as current international economic instability, is likely to
continue to have a negative impact on the Hong Kong economy in the near
future.

Although China has committed by treaty to preserve for 50 years the
economic and social freedoms enjoyed in Hong Kong prior to the
reversion, the continuation of the economic system in Hong Kong after
the reversion will be dependent on the Chinese government, and there can
be no assurances that the commitment made by China regarding Hong Kong
will be maintained. Prior to the reversion, legislation was enacted in
Hong Kong designed to extend democratic voting procedures for Hong
Kong's legislature. China has expressed disagreement with this
legislation, which it states is in contravention of the principles
evidenced in the Basic Law of the Hong Kong SAR. The National Peoples'
Congress of China has passed a resolution to the effect that the
Legislative Council and certain other councils and boards of the Hong
Kong Government were to be terminated on June 30, 1997. Such bodies have
subsequently been reconstituted in accordance with China's
interpretation of the Basic Law. Any increase in uncertainty as to the
future economic and political status of Hong Kong could have a
materially adverse effect on the value of the Global Target 15
Portfolio. First Trust is unable to predict the level of market
liquidity or volatility which may occur as a result of the reversion to
sovereignty, both of which may negatively impact such Fund and the value
of its shares.

China currently enjoys a most favored nation status ("MFN Status") with
the United States. MFN Status is subject to annual review by the
President of the United States and approval by Congress. As a result of
Hong Kong's reversion to Chinese control, U.S. lawmakers have suggested
that they may review China's MFN status on a more frequent basis.
Revocation of the MFN status would have a severe effect on China's trade
and thus could have a materially adverse effect on the value of the
Global Target 15 Portfolio. The performance of certain companies listed
on the Hong Kong Stock Exchange is linked to the economic climate of
China. The renewal of China's MFN Status in May of 1996 has helped to
reduce the uncertainty for Hong Kong in conducting Sino-U.S. trade, and
the signing of the agreement on copyright protection between the U.S.
and Chinese governments in June of 1996 averted a trade war that would
have affected Hong Kong's re-export trade. In 1997, China and the United
States reached a four-year bilateral agreement on textiles, again
avoiding a Sino-U.S. trade war. More recently, the currency crisis which
has affected a majority of Asian markets since mid-1997 has forced Hong
Kong leaders to address whether or devalue the Hong Kong dollar or
maintain its peg to the U.S. dollar. During the volatile markets of
1998, the Hong Kong Monetary Authority (the "HKMA") acquired the common
stock of certain Hong Kong issuers listed on the Hong Kong Stock
Exchange in a an effort to stabilize the Hong King dollar and thwart
currency speculators. Government intervention may hurt Hong Kong's
reputation as a free market and increases concerns that authorities are
not willing to let Hong Kong's currency system function autonomously.
This may undermine confidence in the Hong Kong dollar's peg to the U.S.
Dollar. Any downturn in economic growth or increase in the rate of
inflation in China or Hong Kong could have a materially adverse effect
on the value of the Global Target 15 Portfolio.

Securities prices on the Hong Kong Stock Exchange, and specifically the
Hang Seng Index, can be highly volatile and are sensitive to
developments in Hong Kong and China, as well as other world markets. For
example, the Hang Seng Index declined by approximately 31% in October,
1997 as a result of speculation that the Hong Kong dollar would become
the next victim of the Asian currency crisis, and in 1989, the Hang Seng
Index dropped 1,216 points (approximately 58%) in early June following
the events at Tiananmen Square. The Hang Seng Index gradually climbed
subsequent to the events at Tiananmen Square but fell by 181 points on
October 13, 1989 (approximately 6.5%) following a substantial fall in
the U.S. stock markets. During 1994, the Hang Seng Index lost
approximately 31% of its value. From January through August of 1998,
during a period marked by international economic instability and a
global currency crisis, the Hang Seng Index declined by nearly 27%. The
Hang Seng Index is subject to change, and delisting of any issuers may
have an adverse impact on the performance of the Global Target 15
Portfolio, although delisting would not necessarily result in the
disposal of the stock of these companies, nor would it prevent such Fund
from purchasing additional equity securities of these companies. In
recent years, a number of companies, comprising approximately 10% of the
total capitalization of the Hang Seng Index, have delisted. In addition,
as a result of Hong Kong's reversion to Chinese sovereignty, an

Page 29

increased number of Chinese companies could become listed on the Hong
Kong Stock Exchange, thereby changing the composition of the stock
market and, potentially, the composition of the Hang Seng Index.

Exchange Rate. The Global Target 15 Portfolio, NASDAQ Target 15
Portfolio, First Trust 10 Uncommon Values Portfolio and the Sector Funds
may be comprised substantially of equity securities that are principally
traded in foreign currencies and as such, involve investment risks that
are substantially different from an investment in a fund which invests
in securities that are principally traded in United States dollars. The
United States dollar value of each Fund's portfolios and of the
distributions from the portfolios will vary with fluctuations in the
United States dollar foreign exchange rates for the relevant currencies.
Most foreign currencies have fluctuated widely in value against the
United States dollar for many reasons, including supply and demand of
the respective currency, the rate of inflation in the respective
economies compared to the United States, the impact of interest rate
differentials between different currencies on the movement of foreign
currency rates, the balance of imports and exports of goods and
services, the soundness of the world economy and the strength of the
respective economy as compared to the economies of the United States and
other countries.

Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of
actual and proposed government policies on the value of currencies,
interest rate differentials between the currencies and the balance of
imports and exports of goods and services and transfers of income and
capital from one country to another. These economic factors are
influenced primarily by a particular country's monetary and fiscal
policies (although the perceived political situation in a particular
country may have an influence as well--particularly with respect to
transfers of capital). Investor psychology may also be an important
determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative
strength or weakness of a particular currency may sometimes exercise
considerable speculative influence on currency exchange rates by
purchasing or selling large amounts of the same currency or currencies.
However, over the long term, the currency of a country with a low rate
of inflation and a favorable balance of trade should increase in value
relative to the currency of a country with a high rate of inflation and
deficits in the balance of trade.

The following table sets forth, for the periods indicated, the range of
fluctuation concerning the equivalent U.S. dollar rates of exchange and
end of month equivalent U.S. dollar rates of exchange for the United
Kingdom pound sterling and the Hong Kong dollar:

Foreign Exchange Rates

Range of Fluctuations in Foreign Currencies

Foreign Exchange Rates
Range of Fluctuations in Foreign Currencies

United Kingdom
Annual Pound Sterling/ Hong Kong/
Period U.S. Dollar U.S. Dollar
______ ______________ ___________
1983 0.616-0.707 6.480-8.700
1984 0.671-0.864 7.774-8.050
1985 0.672-0.951 7.729-7.990
1986 0.643-0.726 7.768-7.819
1987 0.530-0.680 7.751-7.822
1988 0.525-0.601 7.764-7.912
1989 0.548-0.661 7.775-7.817
1990 0.504-0.627 7.740-7.817
1991 0.499-0.624 7.716-7.803
1992 0.498-0.667 7.697-7.781
1993 0.630-0.705 7.722-7.766
1994 0.610-0.684 7.723-7.750
1995 0.610-0.653 7.726-7.763
1996 0.583-0.670 7.732-7.742
1997 0.584-0.633 7.708-7.751
1998 0.584-0.620 7.735-7.749

Source: Bloomberg L.P.

First Trust will estimate current exchange rates for the relevant
currencies based on activity in the various currency exchange markets.
However, since these markets are volatile and are constantly changing,
depending on the activity at any particular time of the large

Page 30

international commercial banks, various central banks, large multi-
national corporations, speculators and other buyers and sellers of
foreign currencies, and since actual foreign currency transactions may
not be instantly reported, the exchange rates estimated by First Trust
may not be indicative of the amount in United States dollars a Fund
would receive had the Fund sold any particular currency in the market.
The foreign exchange transactions of a Fund will be conducted by the
Fund with foreign exchange dealers acting as principals on a spot (i.e.,
cash) buying basis. Although foreign exchange dealers trade on a net
basis, they do realize a profit based upon the difference between the
price at which they are willing to buy a particular currency (bid price)
and the price at which they are willing to sell the currency (offer
price).

Fund Management

The officers of the Registrant manage its day to day operations and are
responsible to the Registrant's Board of Trustees. The management of the
Fund, including general supervision of the duties performed for the Fund
under the Investment Advisory and Management Agreement, is the
responsibility of its Board of Trustees. The Trustees set broad policies
for each Fund and choose the Registrant's officers. The following is a
list of the Trustees and officers of the Registrant and a statement of
their present positions and principal occupations during the past five
years, with the Trustee who is an "interested person" (as such term is
defined in the Investment Company Act of 1940) of the Registrant
indicated by an asterisk. The mailing address of the officers and
Trustees, unless otherwise noted, is 1001 Warrenville Road, Suite 300,
Lisle, Illinois 60532.

<TABLE>
<CAPTION>
Position and Principal
Name, Age and Address Offices with Registrant Occupations During Past 5 Years
___________________________ _______________________ _________________________________________
<S> <C> <C>
(1) Robert J. Bartel (67) Trustee Board Member (1996 to Present), First
730 Windmill Circle American Federal Savings Bank of Virginia;
Bristol, VA 24201 Tri-City Advisory Board (1999 to Present),
First American Bank; Senior Financial Advisor
(1997 to Present), United Management Company, LLC;
Trustee (1997 to Present), United Investment Trust;
Chairman of the Board (1989 to 1996), Charter
Federal Savings Bank.

*James A. Bowen (44) President, Chairman of President, Nike Securities; Managing Director, First
the Board, Chief Trust Advisors.
Executive Officer and
Trustee

(1) Mark R. Bradley (42) Treasurer, Controller, Chief Financial Officer, Senior Vice
Chief Financial Officer President, Nike Securities and First Trust Advisors.
and Chief Accounting
Officer

Susan M. Brix (40) Assistant Vice President Representative, Nike Securities; Assistant Portfolio
Manager, First Trust Advisors.

Robert F. Carey (36) Vice President Senior Vice President, Nike Securities
and First Trust Advisors.

Richard E. Erickson (48) Trustee Physician, Sportsmed/Wheaton Orthopedics
327 Gundersen Drive
Carol Stream, IL 60188

David B. Field (50) Vice President Senior Vice President, Nike Securities;
Senior Vice President, Chief Investment
Officer, First Trust Advisors;
Of Counsel (1998 to Present),
Johnson Westra, Attorneys;
Adjunct Professor of Finance
(1999 to Present), Kellstadt Graduate School of
Business, DePaul University.

Patrick M. Fitzgerald (46) Trustee President, Available Business Group Inc.
4141 S. Peoria Street (Printing products and distribution).
Chicago, IL 60609

W. Scott Jardine (39) Secretary Senior Vice President and General Counsel
(1995 to Present), Nike Securities and First
Trust Advisors; Partner (1985 to 1995)
Chapman and Cutler (Law firm).

Niel B. Nielson (45) Trustee Pastor (1997 to Present), College Church in
330 East Union Wheaton; Partner (1996 to 1997), Ritchie Capital
Wheaton, IL 60187 Markets (Options Trading); Vice President
(1995 to 1996), The Service-Master Company; Senior
Vice President (1984 to 1995), Chicago Research and
Trading-NationsBank.
</TABLE>

(1) Mr. Bartel is Mr. Bradley's father-in-law.

The following table sets forth compensation estimated to be paid by the
Registrant to each of the Trustee who are not designated "interested
persons" during the Registrant's fiscal year ending December 31, 1999.
The Registrant has no retirement or pension plans. The officers and
Trustees who are "interested persons" as designated above serve without
any compensation from the Registrant.

Estimated Aggregate
Compensation From Registrant
Name of Manager and Fund Complex*
_______________ ____________________________
Robert J. Bartel $16,625
Richard E. Erickson $16,625
Patrick M. Fitzgerald $16,625
Niel B. Nielson $16,625
_______
Total $66,500

*Based on the estimated compensation to be paid to the independent
Trustees for the fiscal year ending December 31, 1999 for services to
the Registrant. Currently, the Registrant is the only investment company
in the Fund Complex.

As of September 30, 1999, Account B owned all shares of the Registrant.
To the extent required by applicable law, American Skandia will solicit
voting instructions from owners of variable annuity Policies. All
interests in each Fund will be voted by American Skandia in accordance
with voting instructions received from such variable Policy owners.
American Skandia will vote all of the interests which it is entitled to
vote in the same proportion as the voting instructions given by variable
Policy owners, on the issues presented.

Page 32

As of September 30, 1999, the Trustees and officers of the Funds, owned,
in the aggregate, less than 1% of the interests of any individual Fund.

Performance

A Fund may quote its total return and yield in reports to shareholders,
sales literature, and advertisements. These performance measures are
described below. Performance advertised for a Fund may or may not
reflect the effect of any charges that are imposed under a variable
annuity Policy that is funded by the Registrant. Such charges, described
in the variable annuity prospectus, will have the effect of reducing a
Fund's performance.

Standardized average annual total return and non-standardized total
return measure both the net investment income generated by, and the
effect of any realized and unrealized appreciation or depreciation of,
the underlying investments of a Fund. Yield is a measure of the net
investment income per interest earned over a specific one month or 30-
day period expressed as a percentage of the net asset value.

A Fund's standardized average annual total return quotation is computed
in accordance with a standardized method prescribed by rules of the
Securities and Exchange Commission. The standardized average annual
total return for a Fund for a specific period is found by first taking a
hypothetical $1,000 investment ("initial investment") in the Fund's
interests on the first day of the period, adjusting to deduct the
applicable charges, if any, and computing the "redeemable value" of that
investment at the end of the period. The redeemable value is then
divided by the initial investment, and this quotient is taken to the Nth
root (N representing the number of years in the period) and 1 is
subtracted from the result, which is then expressed as a percentage. The
calculation assumes that all income and capital gains dividends paid by
a Fund have been reinvested at net asset value on the reinvestment dates
during the period.

The standardized average annual total return quotations will be current
to the last day of the calendar quarter preceding the date on which an
advertisement is submitted for publication. The standardized average
annual total return will be based on rolling calendar quarters and will
cover at least periods of one, five and ten years, or a period covering
the time the Fund has been in existence, if it has not been in existence
for one of the prescribed periods.

Non-standardized total return may also be advertised. The non-
standardized total return is not subject to a prescribed formula. Non-
standardized total return may be for periods other than those required
to be presented or may otherwise differ from standardized average annual
total return. Non-standardized total return for a specific period is
calculated by first taking an investment ("initial investment") in the
Fund's interests on the first day of the period and computing the "end
value" of that investment at the end of the period. The total return
percentage is then determined by subtracting the initial investment from
the ending value and dividing the remainder by the initial investment
and expressing the result as a percentage. The calculation assumes that
all income and capital gains dividends paid by a Fund have been
reinvested at net asset value on the reinvestment dates during the
period. Non-standardized total return may also be shown as the increased
dollar value of the hypothetical investment over the period.

Quotations of standardized average annual total return and non-
standardized total return are based upon historical earnings and is not
intended to indicate future performance.

The yield for a Fund is computed in accordance with a standardized
method prescribed by the rules of the SEC. Under that method, yield is
computed by dividing the net investment income per interest earned
during the specified one month or 30-day period by the offering price
per interest on the last day of the period, according to the following
formula:

Yield=2[((a - b/cd) + 1)*6 - 1]

Where:

a=dividends and interest earned during the period;

b=expenses accrued for the period (net of reimbursements);

c=the average daily number of interests outstanding during the period
that were entitled to receive dividends; and

d=the offering price (net asset value) per interest on the last day of
the period.

Page 33

In computing the yield, a Fund follows certain standardized accounting
practices specified by SEC rules. These practices are not necessarily
consistent with those that a Fund uses to prepare annual and interim
financial statements in accordance with generally accepted accounting
principles.

A Fund's performance quotations are based upon historical results and
are not necessarily representative of future performance. A Fund's
interests are sold at net asset value. Returns and net asset value will
fluctuate. Factors affecting a Fund's performance include general market
conditions, operating expenses and investment management. Interests of a
Fund are redeemable at the then current net asset value, which may be
more or less than original cost.

The performance of the Funds may be compared to the performance of other
mutual funds, mutual fund indices or annuity indices with similar
objectives and policies as reported by Lipper Analytical Services, Inc.
("Lipper") or CDA Investment Technologies, Inc. ("CDA"). Lipper and CDA
performance calculations are based upon changes in net asset value with
all dividends reinvested and do not include the effect of any sales
charges. The Fund's performance may also be compared to that of the
Consumer Price Index or various unmanaged stock and bond indices
including, but not limited to, Salomon Brothers Broad Investment Grade
Index, Lehman Brothers High Yield Index, Lehman Brothers Aggregate Bond
Index, Lehman Brothers Intermediate Government/Corporate Bond Index,
Salomon Brothers Treasury Index, S&P MidCap 400 Index, Morgan Stanley
Capital International World Index, Morgan Stanley Capital International
Europe and Australia, Far East Equity Index, Russell 2000 Index, Russell
MidCap Index, and S&P 500 Stock Index. There are differences and
similarities between the investments which a Fund may purchase and the
investments by the market indicators.

From time to time, a Fund also may quote information from publications
including, but not limited to, the following: Morningstar, Inc., The
Wall Street Journal, Money Magazine, Forbes, Barron's, The New York
Times, USA Today, Institutional Investor and Registered Representative.
Also, investors may want to compare the historical returns of various
investments, performance indices of those investments or economic
indicators, including but not limited to stocks, bonds, certificates of
deposit and other bank products, money market funds and U.S. Treasury
obligations. Certain of these alternative investments may offer fixed
rates of return and guaranteed principal, and may be insured. Economic
indicators may include, without limitation, indicators of market rate
trends and cost of funds, such as Federal Home Loan Bank Board 11th
District Cost of Funds Index (COFI). A Fund may also advertise its
portfolio at any given time. A Fund may also periodically advertise tax-
deferred compounding charts and other hypothetical illustrations.

Performance Data of Investment Strategies

As of the date of this Statement of Additional Information, the Funds
had not yet commenced investment operations. However, certain aspects of
the investment strategies can be demonstrated using historical data.

The following tables and charts show hypothetical performance and
information for the strategies employed by the Funds noted below, but
not any actual Fund, and the actual performance of the S&P 500 Index,
the FT Index, the Hang Seng Index, the DJIA, the Ibbotson Small Cap
Index and a combination of the FT Index, Hang Seng Index and the DJIA
(the "Cumulative Index Returns"). The information for each investment
strategy assumed that the strategy was fully invested as of the
beginning of each year and that each Stock Selection Date was the last
day of the preceding year. In addition, the performance information
does not take into consideration any sales charges, commissions,
insurance fees or charges imposed on the sale of the variable annuity
policies, expenses or taxes. Any of such charges will lower the returns
shown. All of the figures set forth below have been adjusted to take
into account the effect of currency exchange rate fluctuations of the
U.S. dollar, where applicable (i.e., returns are stated in U.S. dollar
terms). The Cumulative Index Returns are calculated by adding one-third
of the total returns of each of the FT Index, the Hang Seng Index and
the DJIA. The returns shown in the following tables and graphs are not
guarantees of future performance and should not be used as a predictor
of returns to be expected in connection with a Fund's portfolio. Both
stock prices (which may appreciate or depreciate) and dividends (which
may be increased, reduced or eliminated) will affect the returns. Each
investment strategy has underperformed its respective index or indices
in certain years. Accordingly, there can be no assurance that a Fund's
portfolio will outperform its respective index (or combination thereof,
where applicable).

The following table compares the hypothetical performance of the DART 10
Strategy; the Five Lowest Priced Stocks of the Ten Highest Dividend
Yielding Stocks of the DJIA (the "Dow Target 5 Strategy"); a combination

Page 34

of the Five Lowest Priced Stocks of the Ten Highest Dividend Yielding
Stocks Strategies in the FT Index, Hang Seng Index and the DJIA (the
"Combined 15 Strategy"); the S&P Target 10 Strategy and the NASDAQ
Target 15 Large Cap Strategy; and the performance of the S&P 500 Index,
the FT Index, the Hang Seng Index, the DJIA, the Ibbotson Small-Cap
Index and the Cumulative Index Returns in each of the 20 years listed
below, as of December 31 in each of those years (and as of the most
recent quarter).

An investor in a Fund would not necessarily realize as high a total
return on an investment in the stocks upon which the hypothetical
returns are based for the following reasons: the total return figures
shown do not reflect brokerage commissions, expenses or taxes; the Funds
are established at different times of the year; and the Funds may not be
fully invested at all times or equally weighted in all stocks comprising
a strategy. Further, the returns also do not reflect the deduction of
any insurance fees or charges which are imposed by American Skandia in
connection with the sale of variable annuity policies. Investors should
refer to the prospectus for Account B for a description of those fees
and charges which have a detrimental effect on the performance of the
Funds. If the above-mentioned charges were reflected in the hypothetical
returns, the returns would be lower than those presented here.

The returns shown below for the strategies do not represent the results
of actual trading using client assets but were achieved by means of the
retroactive application of a strategy that was designed with the benefit
of hindsight. These returns should not be considered indicative of the
skill of the sub-adviser. The returns may not reflect the impact that
any material market or economic factors might have had if the strategies
had been used during the periods shown to actually manage client assets.
During a portion of the period shown in the table below, the sub-
adviser acted as the portfolio supervisor of certain unit investment
trusts which employed strategies similar to the hypothetical strategies
shown below. The returns shown below for the strategies are not a
guarantee of future performance and should not be used to predict the
expected returns on a Fund. In fact, the hypothetical strategies
underperformed their respective indices in certain years.

These figures are for calendar years; the Funds may use different 12-
month periods.

<TABLE>
<CAPTION>
COMPARISON OF TOTAL RETURN(2)

Strategy Total Returns Index Total Returns

S&P NASDAQ Ibbotson
DART Dow Combined Target Target 15 Small Cumulative
10 Target 5 15 10 Large Cap S&P 500 FT Hang Cap Index
YEAR Strategy Strategy Strategy Strategy Strategy Index Index Seng DJIA Index Returns(3)
____ ________ ________ ________ ________ _________ ________ ______ ______ _____ _________ __________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1979 13.01% 9.84% 44.70% 43.17% - 18.22% 3.59% 77.99% 10.60% 43.46% 30.73%
1980 24.80% 41.69% 52.51% 54.15% - 32.11% 31.77% 65.48% 21.90% 38.88% 39.72%
1981 2.02% 3.19% 0.03% -10.59% - -4.92% -5.30% -12.34% -3.61% 13.88% -7.08%
1982 27.46% 43.37% -2.77% 38.21% - 21.14% 0.42% -48.01% 26.85% 28.01% -6.91%
1983 40.44% 36.38% 15.61% 20.01% - 22.28% 21.94% -2.04% 25.82% 39.67% 15.24%
1984 6.22% 11.12% 29.88% 16.34% - 6.22% 2.15% 42.61% 1.29% -6.67% 15.35%
1985 39.31% 38.34% 54.06% 43.49% - 31.77% 54.74% 50.95% 33.28% 24.66% 46.32%
1986 41.95% 30.89% 38.11% 21.81% 22.94% 18.31% 24.36% 51.16% 27.00% 6.85% 34.18%
1987 5.24% 10.69% 17.52% 9.16% 14.10% 5.33% 37.13% -6.84% 5.66% -9.30% 11.99%
1988 19.02% 21.47% 24.26% 20.35% -0.59% 16.64% 9.00% 21.04% 16.03% 22.87% 15.36%
1989 28.49% 10.55% 15.98% 39.62% 37.33% 31.35% 20.07% 10.59% 32.09% 10.18% 20.92%
1990 1.27% -15.74% 3.19% -5.64% -5.39% -3.30% 11.03% 11.71% -0.73% -21.56% 7.34%
1991 43.84% 62.03% 40.40% 24.64% 109.27% 30.40% 8.77% 50.68% 24.19% 44.63% 27.88%
1992 8.53% 22.90% 26.64% 24.66% -0.15% 7.62% -3.13% 34.73% 7.39% 23.35% 12.99%
1993 21.15% 34.01% 65.65% 42.16% 28.55% 9.95% 19.22% 124.95% 16.87% 20.98% 53.68%
1994 0.17% 8.27% -7.26% 8.17% 10.50% 1.34% 1.97% -29.34% 5.03% 3.11% -7.45%
1995 38.14% 30.50% 13.45% 25.26% 53.80% 37.22% 16.21% 27.52% 36.67% 34.66% 26.80%
1996 34.93% 26.20% 21.00% 26.61% 60.03% 22.82% 18.35% 37.86% 28.71% 17.62% 28.31%
1997 25.64% 19.97% -6.38% 61.46% 35.15% 33.21% 14.78% -17.69% 24.82% 22.78% 7.30%
1998 19.96% 12.36% 13.50% 53.85% 123.10% 28.57% 12.32% -2.60% 18.03% -7.38% 9.25%
1999 23.20% 14.03% 21.85% 9.79% 19.09% 12.34% 8.56% 36.38% 20.37% 10.69% 21.77%
(thru
6/30)
</TABLE>

Page 35

(1) The Strategy Stocks for each Strategy for a given year consist of
stock selected by applying the respective strategy as of the beginning
of the period. The Combined 15 Strategy merely averages the Total
Return of the stocks which comprise the Five Lowest Priced Stocks of the
Ten Highest Dividend Yielding Stocks in the FT Index, Hang Seng Index
and the DJIA, respectively.

(2) Total Return represents the sum of the change in market value of
each group of stocks between the first and last trading day of a period
plus the total dividends paid on each group of stocks during the period
divided by the opening market value of each group of stocks as of the
first trading day of a period. Total Return does not take into
consideration any sales charges, commissions, expenses or taxes. Total
Return assumes that all dividends are reinvested semi-annually (with the
exception of the FT Index and the Hang Seng Index from 12/31/78 through
12/31/86, during which time annual reinvestment was assumed), and all
returns are stated in terms of the United States dollar. Based on the
year-by-year returns contained in the table, over the 13 years listed
for the NASDAQ Target 15 Large Cap Strategy the average annual total
return is 32.79%; in addition, over the 20 full years listed above, the
DART 10 Strategy achieved an average annual total return of 16.82%, the
S&P Target 10 Strategy achieved an average annual total return of
26.40%, and the Five Lowest Priced Stocks of the Ten Highest Dividend
Yielding Stocks in the DJIA and Combined 15 Strategy achieved an average
annual total return of 21.70% and 21.32%, respectively. In addition,
over this period, each individual strategy achieved a greater average
annual total return than that of its corresponding index, the S&P 500
Index, Ibbotson Small-Cap Index, the DJIA or a combination of the FT
Index, Hang Seng Index and DJIA, which were 17.61%, 16.00%, 17.28% and
17.94%, respectively. For the seven year period between January 1, 1972
and December 31, 1978, the DART 10 Strategy achieved an annual total
return of 23.76% in 1972, -2.26% in 1973, -7.11% in 1974, 57.78% in
1975, 35.18% in 1976, -1.95% in 1977 and -1.95% in 1978; the Five Lowest
Priced Stocks of the Ten Highest Dividend Yielding Stocks in the DJIA
achieved an annual total return of 22.92% in 1972, 20.01% in 1973, -
5.40% in 1974, 65.77% in 1975, 40.96% in 1976, 5.49% in 1977 and 1.23%
in 1978; the DJIA achieved an annual total return of 18.38% in 1972, -
13.20% in 1973, -23.64% in 1974, 44.46% in 1975, 22.80% in 1976, -12.91%
in 1977 and 2.66% in 1978; the S&P 500 Index achieved an annual total
return of 18.89% in 1972, -14.57% in 1973, -26.33% in 1974, 36.84% in
1975, 23.64% in 1976 and -7.25% in 1977 and 6.49% in 1978; and the
Ibbotson Small-Cap Index achieved an annual total return of 4.43% in
1972, -30.90% in 1973, -19.95% in 1974, 52.82% in 1975, 57.38% in 1976,
25.38% in 1977 and 23.46% in 1978. Although each Fund seeks to achieve a
better performance than its respective index as a whole, there can be no
assurance that a Fund will achieve a better performance.

(3) Cumulative Index Returns represent the average of the annual returns
of the stocks contained in the FT Index, Hang Seng Index and DJIA.
Cumulative Index Returns do not represent an actual index.

The chart above represents past performance. There can be no assurance
that any Fund will outperform the DJIA or any other index shown.
Investors should not rely on the preceding financial information as an
indication of the past or future performance of a Fund. This
information may be used in advertisements.

Investment Advisory and Other Services

Investment Adviser

First Trust Advisors L.P., 1001 Warrenville Road, Suite 300, Lisle,
Illinois 60532, is the investment adviser to the Funds. As investment
adviser, First Trust provides the Funds with professional investment
supervision and management and permits any of its officers or employees
to serve without compensation as Trustees or officers of the Registrant
if elected to such positions. First Trust provides each Fund with
discretionary investment services and certain administrative services
necessary with the management of the portfolios. Specifically, First
Trust is responsible for supervising and directing the investments of
each Fund in accordance with each Fund's investment objective, program,
and restrictions as provided in the Prospectus and this Statement of
Additional Information. First Trust is responsible for effecting all
security transactions on behalf of each Fund. First Trust is also
responsible for compliance with the provisions of Section 817(h) of the
Internal Revenue Code of 1986, as amended ("Code"), applicable to each
Fund (relating to the diversification requirements applicable to
investments in underlying variable annuity contracts).

First Trust Advisors L.P. (First Trust) is an Illinois limited
partnership formed in 1991 and an investment adviser registered with the
SEC under the Investment Advisers Act of 1940. First Trust is a limited
partnership with one limited partner, Grace Partners of Dupage L.P.
("Grace Partners"), and one general partner, Nike Securities

Page 36

Corporation. Grace Partners is a limited partnership with one general
partner, Nike Securities Corporation, and a number of limited partners.
Grace Partners' and Nike Securities corporation's primary business is
investment advisory and broker/dealer services through their interests.
Nike Securities Corporation is an Illinois corporation controlled by
Robert Donald Van Kampen. First Trust is controlled by Grace Partners
and Nike Securities Corporation.

First Trust is also Subadviser to 23 mutual funds and is the portfolio
supervisor of certain unit investment trusts sponsored by Nike
Securities L.P. ("Nike Securities") which are substantially similar to
the Funds in that they have the same investment objectives and
strategies as the various Funds but have a life of approximately one
year. Nike Securities specializes in the underwriting, trading and
distribution of unit investment trusts and other securities. Nike
Securities, an Illinois limited partnership formed in 1991, acts as
sponsor for successive series of The First Trust Combined Series, The
First Trust Special Situations Trust, the First Trust Insured Corporate
Trust, The First Trust of Insured Municipal Bonds and The First Trust
GNMA. First Trust introduced the first insured unit investment trust in
1974 and to date more than $25 billion in First Trust unit investment
trusts have been deposited.

First Trust acts as investment adviser to the Funds pursuant to an
Investment Advisory and Management Agreement. The Investment Advisory
and Management Agreement continues in effect for each Fund from year to
year after its initial two-year term so long as its continuation is
approved at least annually by the Trustees including a majority of the
Trustees who are not parties to such agreement or interested persons of
any such party except in their capacity as Trustees of the Registrant,
or the interest holders of each Fund. It may be terminated at any time
upon 60 days notice by either party, or by a majority vote of the
outstanding interests of a Fund with respect to that Fund, and will
terminate automatically upon assignment. Additional Funds may be subject
to a different agreement. The Investment Advisory and Management
Agreement provides that First Trust, its partners, directors, officers,
employees, and certain other persons performing specific functions for a
Fund will only be liable to a Fund for losses resulting from willful
misfeasance, bad faith, gross negligence, or reckless disregard of their
obligations and duties under the agreement. As compensation for its
services, each Fund pays First Trust a fee as described in the
Prospectus. Provisions regarding expense limitations are described in
the Prospectus.

Nike Securities, 1001 Warrenville Road, Lisle, Illinois 60532, serves as
the principal underwriter of the interests of the Fund pursuant to a
"best efforts" arrangement as provided by a distribution agreement with
the Fund (the "Distribution Agreement"). The officers of the Registrant
described as being associated with Nike Securities are affiliated
persons of both the Registrant and Nike Securities. Pursuant to the
Distribution Agreement, the Fund appointed Nike Securities to be its
agent for the distribution of the Funds' shares on a continuous offering
basis. Nike Securities sells shares to Account B. Pursuant to the
Distribution Agreement, Nike Securities, at its own expense, finances
certain activities incident to the sale and distribution of the
interests of the Funds, including printing and distribution of
prospectuses and statements of additional information to other than
existing shareholders and the printing and distributing of sales
literature and advertising. Nike Securities also receives compensation
pursuant to a Rule 12b-1 plan adopted by the Fund and described herein
under "12b-1 Plan."

Custodian and Transfer Agent

The custodian has custody of all securities and cash of the Registrant
maintained in the United States and attends to the collection of
principal and income and payment for and collection of proceeds of
securities bought and sold by the Funds. The Chase Manhattan Bank, 4 New
York Plaza, New York, NY 10004-2413, acts as custodian for each Fund.
First Data Investor Services Group, Inc, 4400 Computer Drive,
Westborough, Massachusetts 01581, is the transfer, shareholder services,
accounting and dividend-paying agent for each Fund and also provides
certain clerical, bookkeeping, accounting and administrative services
necessary for the operation of the Registrant and maintenance of
shareholder accounts.

Administrator

Each Fund pays an administration fee of 0.325% of average daily net
assets to cover expenses incurred by American Skandia in connection with
the administrator of the Funds, Account B and the Policies. The
services provided by American Skandia shall include, among others, the
following: (i) coordinating matters relating to the operation of
Account B with the Funds, including any necessary coordination with the
custodian, transfer agent, dividend disbursing agent, recordkeeping
agent, accountants, attorneys, and other parties performing services or
operational functions for the Funds; (ii) coordinating the preparation
of the necessary documents with the SEC and other federal and state

Page 37

regulatory authorities as may be required; (iii) taking such other
action as may be required by applicable law, with respect to the
foregoing, including without limitation the rules and regulations of the
SEC and of state insurance authorities and other regulatory agencies;
and (iv) coordinating with First Trust regarding investment limitations
and parameters imposed on funding vehicles for variable annuities by the
insurance laws of the various states and by the Internal Revenue Code.

American Skandia shall also make its officers and employees available to
the Trustees and officers of the Fund for consultation and discussions
regarding the operations of Account B and the Policies in connection
with the administration of the Funds and services provided to the Funds.

Independent Accountants

The Funds' independent accountants, Ernst & Young LLP, 233 S. Wacker
Dr., Chicago, Illinois 60606-6301, audit and report on the Funds' annual
financial statements, and perform other professional accounting,
auditing and advisory services when engaged to do so by the Funds.

Fund Transactions and Brokerage

First Trust is responsible for decisions to buy and sell securities for
each Fund and for the placement of a Fund's securities business, the
negotiation of the commissions to be paid on brokered transactions, the
prices for principal trades in securities, and the allocation of
portfolio brokerage and principal business. It is the policy of First
Trust to seek the best execution at the best security price available
with respect to each transaction, and with respect to brokered
transactions in light of the overall quality of brokerage and research
services provided to First Trust and its advisees. The best price to the
Fund means the best net price without regard to the mix between purchase
or sale price and commission, if any. Purchases may be made from
underwriters, dealers, and, on occasion, the issuers. Commissions will
be paid on a Fund's futures and options transactions, if any. The
purchase price of portfolio securities purchased from an underwriter or
dealer may include underwriting commissions and dealer spreads. A Fund
may pay mark-ups on principal transactions. In selecting broker/dealers
and in negotiating commissions, First Trust considers, among other
things, the firm's reliability, the quality of its execution services on
a continuing basis and its financial condition. Fund portfolio
transactions may be effected with broker/dealers who have assisted
investors in the purchase of policies. The selection of a broker-dealer
may take into account the sale of products sponsored or advised by First
Trust and/or its affiliates.

Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment adviser, under circumstances, to cause an account
to pay a broker or dealer who supplies brokerage and research services a
commission for effecting a transaction in excess of the amount of
commission another broker or dealer would have charged for effecting the
transaction. Brokerage and research services include (a) furnishing
advice as to the value of securities, the advisability of investing,
purchasing or selling securities, and the availability of securities or
purchasers or sellers of securities, (b) furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts; and (c) effecting
securities transactions and performing functions incidental thereto
(such as clearance, settlement, and custody).

In light of the above, in selecting brokers, First Trust considers
investment and market information and other research, such as economic,
securities and performance measurement research, provided by such
brokers, and the quality and reliability of brokerage services,
including execution capability, performance, and financial
responsibility. Accordingly, the commissions charged by any such broker
may be greater than the amount another firm might charge if First Trust
determines in good faith that the amount of such commissions is
reasonable in relation to the value of the research information and
brokerage services provided by such broker to First Trust or the
Registrant. First Trust believes that the research information received
in this manner provides the Funds with benefits by supplementing the
research otherwise available to the Funds. The Investment Advisory and
Management Agreement provides that such higher commissions will not be
paid by the Funds unless the adviser determines in good faith that the
amount is reasonable in relation to the services provided. The
investment advisory fees paid by the Funds to First Trust under the
Investment Advisory and Management Agreement are not reduced as a result
of receipt by First Trust of research services.

First Trust places portfolio transactions for other advisory accounts
advised by it, research services furnished by firms through which the
Funds effects their securities transactions may be used by First Trust
in servicing all of its accounts; not all of such services may be used
by First Trust in connection with a Fund. First Trust believes it is not

Page 38

possible to measure separately the benefits from research services to
each of the accounts (including the Funds) advised by it. Because the
volume and nature of the trading activities of the accounts are not
uniform, the amount of commissions in excess of those charged by another
broker paid by each account for brokerage and research services will
vary. However, First Trust believes such costs to the Funds will not be
disproportionate to the benefits received by the Funds on a continuing
basis. First Trust seeks to allocate portfolio transactions equitably
whenever concurrent decisions are made to purchase or sell securities by
the Funds and another advisory account. In some cases, this procedure
could have an adverse effect on the price or the amount of securities
available to the Funds. In making such allocations between the Funds and
other advisory accounts, the main factors considered by First Trust are
the respective investment objectives, the relative size of portfolio
holding of the same or comparable securities, the availability of cash
for investment and the size of investment commitments generally held.

Code of Ethics

To mitigate the possibility that a Fund will be adversely affected by
personal trading of employees, the Registrant and First Trust have
adopted Codes of Ethics under Rule 17j-1 of the Investment Company Act
of 1940. These Codes contain policies restricting securities trading in
personal accounts of the portfolio Trustees and others who normally come
into possession of information on portfolio transactions.

Purchases, Redemptions and Pricing of Interests

Account B will purchase interests of the Funds at their net asset value.
Interests are purchased using premiums received on Policies issued by
Account B. Account B is funded by interests of the Registrant.

All investments in the Registrant are credited to the interest holder's
account in the form of full and fractional interests of the designated
Fund (rounded to the nearest 1/1000 of an interest). The Registrant does
not issue interest certificates.

As stated in the Prospectus, the net asset value ("NAV") of Fund's
interests is determined once each day on which the New York Stock
Exchange (the "NYSE") is open ("Business Day") at the close of the
regular trading session of the Exchange (normally 4:00 p.m., Eastern
Time, Monday through Friday). The NAV of Fund's interests is not
determined on the days the NYSE is closed, which days generally are New
Year's Day, Martin Luther King Jr. holiday, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas.

The per interest NAV of a Fund is determined by dividing the total value
of the securities and other assets, less liabilities, by the total
number of interests outstanding. A Fund's net assets value may not be
calculated on days during which the Fund receives no orders to purchase
shares and no shares are tendered for redemption. In determining NAV,
securities listed on the national securities exchanges, the Nasdaq Stock
Market and foreign exchanges are valued at the closing prices on such
markets the securities are principally traded; however, securities
traded on a national securities exchange, Nasdaq, or foreign exchanges
for which there were no transactions on a given day are valued at their
most recent bid prices. Securities that are traded on the over-the-
counter market are valued at their closing bid prices. Foreign
securities and currencies are converted to U.S. dollars using exchange
rates in effect at the time of valuation. A Fund will determine the
market value of individual securities held by it, by using prices
provided by one or more professional pricing services which may provide
market prices to other funds, or, as needed, by obtaining market
quotations from independent broker-dealers. Short-term securities
maturing within 60 days are valued on the amortized cost basis.
Securities for which quotations are not readily available, and other
assets, are valued at fair value determined in good faith under
procedures established by and under the supervision of the Trustees.

Trading in securities on European and Far Eastern securities exchanges
and over-the-counter markets is normally completed well before the close
of business on each Business Day. In addition, European and Far Eastern
securities trading generally or in a particular country or countries may
not take place on all Business Days. Furthermore, trading takes place in
Japanese markets on certain Saturdays and in various foreign markets on
days which are not Business Days and on which a Fund's net asset value
is not calculated. A Fund calculates net asset value per interest, and
therefore effects sales, redemptions and repurchases of its interests,
as of the close of the NYSE once on each day on which the NYSE is open.
Such calculation does not take place contemporaneously with the
determination of the prices of the majority of the foreign portfolio
securities used in such calculation.

Page 39

The Registrant may suspend the right of redemption for any Fund only
under the following unusual circumstances: (a) when the New York Stock
Exchange is closed (other than weekends and holidays) or trading is
restricted; (b) when trading in the markets normally utilized is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Company's investments or
determination of its net assets is not reasonably practicable; or (c)
during any period when the Securities and Exchange Commission may permit.

12b-1 Plan

The Registrant has adopted a plan (the "Plan") pursuant to Rule 12b-1
under the Investment Company Act of 1940, which provides that interests
of the Funds will be subject to an annual service fee.

Nike Securities serves as selling agent and distributor of the interests
of the Funds. In this capacity, Nike Securities manages the offering of
the Funds' interests and is responsible for all sales and promotional
activities. In order to reimburse Nike Securities for its costs in
connection with these activities, each Fund has adopted a service plan
under Rule 12b-1 under the Investment Company Act of 1940. Nike
Securities uses the service fee to compensate American Skandia for
providing account services to policy owners. These services include
establishing and maintaining policy owner accounts, answering inquiries,
and providing other personal services to policy owners. Each Fund may
spend up to .25 of 1% per year of the average daily net assets of its
interests as a service fee under the Plan. In addition, the Plan permits
First Trust to use a portion of its advisory fee to compensate Nike
Securities for expenses incurred in connection with the sales and
distribution of a Fund's interests including, without limitation,
compensation of its sales force, expenses of printing and distributing
prospectuses to persons other than interest holders or policy owners,
expenses of preparing, printing and distributing advertising and sales
literature and reports to interests holders and policy owners used in
connection with the sale of a Fund's interests, certain other expenses
associated with the distribution of interests of the Funds, and any
distribution-related expenses that may be authorized from time to time
by the Board of Trustees.

Under the Registrant's Plan, the Registrant will report quarterly to the
Board of Trustees for its review all amounts expended under the Plan.
The Plan may be terminated at any time with respect to any Fund, without
the payment of any penalty, by a vote of a majority of the Trustees who
are not "interested persons" and who have no direct or indirect
financial interest in the Plan or by vote of a majority of the
outstanding voting securities of such Fund. The Plan may be renewed from
year to year if approved by a vote of the Board of Trustees and a vote
of the non-interested Trustees who have no direct or indirect financial
interest in the Plan cast in person at a meeting called for the purpose
of voting on the Plan. The Plan may be continued only if the Trustees
who vote to approve such continuance conclude, in the exercise of
reasonable business judgment and in light of their fiduciary duties
under the applicable law, that there is a reasonable likelihood that the
Plan will benefit a Fund and its shareholders. The Plan may not be
amended to increase materially the cost which a Fund may bear under the
Plan without the approval of the interest holders of the affected Fund,
and any other material amendments of the Plan must be approved by the
non-interested Trustees by a vote cast in person at a meeting called for
the purpose of considering such amendments. During the continuance of
the Plan, the selection and nomination of the non-interested Trustees of
the Registrant will be committed to the discretion of the non-interested
Trustees then in office.

Additional Information

Voting Rights

Interest holders are entitled to one vote for each interest held.
Interest holders may vote on the election of Trustees and on other
matters submitted to meetings of interest holders. In regard to certain
matters including termination, merger, or a change of investment
restrictions, the right to vote is limited to the holders of interests
of the particular Fund affected by the proposal. When a majority is
required, it means the lesser of 67% or more of the interests present at
a meeting when the holders of more than 50% of the outstanding interests
are present or represented by proxy, or more than 50% of the outstanding
interests.

To the extent required by applicable law, American Skandia will solicit
voting instructions from owners of variable annuity Policies. All
interests in each Fund will be voted by American Skandia in accordance
with voting instructions received from such variable Policy owners.
American Skandia will vote all of the interests which it is entitled to
vote in the same proportion as the voting instructions given by variable
Policy owners, on the issues presented.

Page 40

Each issued and outstanding interest in a Fund is entitled to
participate equally in dividends and distributions, if any, declared by
its corresponding Fund, and in the net assets of the Fund remaining upon
liquidations or dissolution after outstanding liabilities are satisfied.
The interests of each Fund, when issued, are fully paid and non-
assessable. They have no preemptive, conversion, cumulative dividend or
similar rights. They are not freely transferable. A Fund can only be
owned by Account B. Interests in a Fund do not have cumulative rights.
This means that owners of more than half of the Registrant's interests
voting for election of Trustees can elect all the Trustees if they so
choose. Then, the remaining interest owners would not be able to elect
any Trustees.

Shareholder Inquiries

All inquiries regarding the Registrant should be directed to the
Registrant at 1-(800) 621-1675 or by writing the Registrant at 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532.

Tax Status

The Registrant is not a "regulated investment company" under Subchapter
M of the Internal Revenue Code of 1986, as amended (the "Code"). The
Registrant nonetheless does not pay federal income tax on its interest,
dividend income or capital gains. As a limited liability company whose
interests are sold only to Account B, the Registrant is disregarded as
an entity for purposes of federal income taxation. American Skandia,
through Account B, is treated as owning the assets of the Registrant,
which are the collective assets of the Funds, directly and its tax
obligations thereon are computed pursuant to Subchapter L of the Code
(which governs the taxation of insurance companies). Under current tax
law, interest, dividend income and capital gains of the Registrant are
not taxable to the Registrant, and are not currently taxable to American
Skandia or to Policy owners, when left to accumulate within a variable
annuity Policy. Tax disclosure relating to the variable annuity Policies
that offer the Registrant as an investment alternative is contained in
the prospectuses for those Policies.

Section 817(h) of the Code imposes certain diversification standards on
the underlying assets of segregated asset accounts that hold assets
purchased under contracts such as the variable annuity Policies (that
is, the assets of the Funds). Failure to satisfy those standards would
result in imposition of Federal income tax on a variable annuity Policy
owner with respect to the increase in the value of the variable annuity
Policy. Section 817(h)(2) provides that a segregated asset account that
funds contracts such as the variable annuity Policies is treated as
meeting the diversification standards if, as of the close of each
calendar quarter, the assets in the account meet the diversification
requirements for a regulated investment company and no more than 55% of
those assets consist of cash, cash items, U.S. Government securities and
securities of other regulated investment companies.

The Treasury Regulations amplify the diversification standards set forth
in Section 817(h) and provide an alternative to the provision described
above. Under the regulations, an investment portfolio will be deemed
adequately diversified if (i) no more than 55% of the value of the total
assets of the portfolio is represented by any one investment; (ii) no
more than 70% of such value is represented by any two investments; (iii)
no more than 80% of such value is represented by any three investments;
and (iv) no more than 90% of such value is represented by any four
investments. For purposes of these Regulations, all securities of the
same issuer are treated as a single investment, but each United States
government agency or instrumentality shall be treated as a separate
issuer.

Each Fund will be managed with the intention of complying with these
diversification requirements. It is possible that, in order to comply
with these requirements, less desirable investment decisions may be made
which could affect the investment performance of a Fund.

Page 41

FIRST DEFINED PORTFOLIO FUND, LLC

PART C
OTHER INFORMATION

Note: Items 23-30 have been answered with respect to all investment
portfolios (Funds) of the Registrant.

Item 23. Exhibits

Exhibit
Number Description

(a)(1) Certificate of Formation of the Registrant.(1)
(a)(2) Form of Amendment and Restated Certificate of Formation of the
Registrant.(2)
(a)(3) Form of Limited Liability Company Agreement of the Registrant.(2)
(b) Form of Operating By-Laws of the Registrant.(2)
(c)(1) Form of Establishment and Designation of Series of Membership
Interests.(2)
(c)(2) Form of Amended and Restated Establishment and Designation of
Series of Membership Interests.(2)
(d) Form of Investment Advisory and Management Agreement between
Registrant and First Trust Advisors L.P.(2)
(e) Form of Distribution Agreement between Registrant and Nike
Securities L.P.(2)
(f) Not Applicable
(g)(1) Form of Custodian Agreement between the Registrant and The Chase
Manhattan Bank.(2)
(g)(2) Form of Foreign Custody Manager Agreement between the Registrant
and First Trust Advisors L.P. (2)
(h)(1) Form of Services Agreement between Registrant and First Data
Investor Services Group, Inc.(2)
(h)(2) Form of Administrative Services Agreement between Registrant and
American Skandia Life Assurance Corporation.(2)
(i)(1) Form of Opinion and Consent of Chapman and Cutler.(2)
(i)(2) Form of Opinion and Consent of Potter Anderson & Corroon. (2)
(j) Not Applicable.
(k) Not Applicable.
(l) Not Applicable.
(m) 12b-1 Service Plan.(2)
(n) Not Applicable.
(o) Not Applicable.
(z) Original Powers of Attorney for Messrs. Bartel, Bowen, Erickson,
Fitzgerald, and Nielson, authorizing, among others, James A. Bowen
and W. Scott Jardine to execute the Registration Statement.(2)

(1) Incorporated by reference to the initial registration statement
filed on Form N-1A for the Registrant.

(2) Filed herewith.

Page C-1

Item 24. Persons controlled by or under Common Control with Registrant

Not Applicable

Item 25. Indemnification

Section 12.4 of the Registrant's Limited Liability Company Agreement
provides as follows:

Section 12.4.Indemnification. (a) Subject to the exceptions and
limitations contained in this Section 12.4, every person who is, or has
been, a Trustee, director, officer, employee, authorized person or agent
of the Company, including persons who serve at the request of the
Company as Trustees, officers, employees, or agents, of another
organization in which the Company has an interest as a shareholder,
creditor or otherwise (hereinafter referred to as a "Covered Person"),
shall be indemnified by the Company to the fullest extent permitted by
law against liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his being
or having been such a Trustee, director, officer, employee, authorized
person or agent and against amounts paid or incurred by him in
settlement thereof.

(b)No indemnification shall be provided hereunder to a Covered Person:

(i)against any liability to the Company or the Member by reason of a
final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;

(ii)with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Company; or

(iii)in the event of a settlement or other disposition not involving a
final adjudication (as provided in paragraph (a) or (b)) and resulting
in a payment by a Covered Person, unless there has been either a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office by the court or other body
approving the settlement or other disposition, or a reasonable
determination, based on a review of readily available facts (as opposed
to a full trial-type inquiry), that he did not engage in such conduct:

(A)by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or

(B)by written opinion of independent legal counsel.

(c)The rights of indemnification herein provided may be insured against
by policies maintained by the Company, shall be severable, shall not
affect any other rights to which any Covered Person may now or hereafter
be entitled, shall continue as to a person who has ceased to be such a
Covered Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein shall
affect any rights to indemnification to which Company personnel other
than Covered Persons may be entitled by contract or otherwise under law.

(d)Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding subject to a claim for indemnification under
this Section 12.4 shall be advanced by the Company prior to final
disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount if it is ultimately determined that
he is not entitled to indemnification under this Section 12.4, provided
that either:

(i)such undertaking is secured by a surety bond or some other
appropriate security or the Company shall be insured against losses
arising out of any such advances; or

Page C-2

shall determine, based upon a review of the readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to indemnification.

As used in this Section 12.4, a "Disinterested Trustee" is one (x) who
is not an Interested Person of the Company (including anyone, as such
Disinterested Trustee, who has been exempted from being an Interested
Person by any rule, regulation or order of the Commission), and (y)
against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then
or has been pending.

As used in this Section 12.4, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits, proceedings
(civil, criminal, administrative or other, including appeals), actual or
threatened; and the words "liability" and "expenses" shall include
without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.

The trustees and officers of the Registrant are covered by Investment
Trust Errors and Omission policies in the aggregate amount of $500,000
(with a maximum deductible of $50,000) against liability and expenses of
claims of wrongful acts arising out of their position with the
Registrant, except for matters which involved willful acts, bad faith,
gross negligence and willful disregard of duty (i.e., where the insured
did not act in good faith for a purpose he or she reasonably believed to
be in the best interest of Registrant or where he or she shall have had
reasonable cause to believe this conduct was unlawful).

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to the officers, trustees or controlling
persons of the Registrant pursuant to the Limited Liability Company
Agreement of the Registrant or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the even that a claim for
indemnification is against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by an officer or trustee or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such officer, trustee or
controlling person in connection with the securities being registered,
the Registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.

Item 26: Business and Other Connections of the Investment Adviser

First Trust Advisors L.P. ("First Trust") serves as investment adviser
to the funds and also serves as subadvisor to 23 mutual funds and is the
portfolio supervisor of certain unit investment trusts. Its principal
address is 1001 Warrenville Road, Suite 300, Lisle, Illinois 60532.

The principal business of certain of First Trust's principal executive
officers involves various activities in connection with the family of
unit investment trusts sponsored by Nike Securities L.P. ("Nike
Securities"). Nike Securities principal address is 1001 Warrenville
Road, Suite 300, Lisle, Illinois 60532.

<TABLE>
<CAPTION>
Other Business, Profession, Vocation or
Name and Position with First Trust Employment During Past Two Years
___________________________________ _______________________________________
<S> <C>
Ronald Dean McAlister, President Managing Director, Nike Securities.

James A. Bowen, Managing Director President, Nike Securities.

Charles Henry Bradley, Jr., Senior Vice President Senior Vice President, Nike Securities;
Chief Investment Officer, CornerStone
Investment Advisors.

Mark R. Bradley, Chief Financial Officer Chief Financial Officer and Senior Vice
and Senior Vice President President, Nike Securities.

Robert W. Bredemeier, Senior Vice President Senior Vice President, Nike Securities.

Susan Marie Brix, Ass't Portfolio Manager Representative, Nike Securities.

Robert Franklin Carey, Senior Vice President Senior Vice President, Nike Securities.

Jon Carl Erickson, Vice President Vice President, Nike Securities.

Page C-3

Frank Leonard Fichera, Managing Director Managing Director, Nike Securities.

David Brooks Field, Senior Vice President and Senior Vice President, Nike Securities;
Chief Investment Officer Of Counsel, Johnson, Westra, Attorneys;
Adjunct Professor of Finance, Kellstadt
Graduate School of Business, DePaul University.

Robert Scott Hall, Managing Director Managing Director, Nike Securities.

William Scott Jardine, Senior Vice President, Senior Vice President, General Counsel,
General Counsel Nike Securities.

Edward Hayes Keiley III, Vice President Compliance Vice President Compliance, Nike Securities;
Associate Examiner, NASDR; Executive Vice
President, Community Brokerage, Inc.

Daniel Joel Lindquist, Vice President Vice President, Nike Securities; Vice
and Portfolio Manager President, Shay Assets Management;
Registered Representative, Nike Securities.

David Gerard McGarel, Evaluations Supervisor Evaluations Supervisor, Nike Securities;
Manager, Bansley & Kiener, L.L.P.

Nike Securities Corporation, General Partner General Partner, Grace Partners of DuPage L.P.

Richard Allen Olson, Managing Director Managing Director, Nike Securities.

John Griffin Phillips, Vice President Vice President, Nike Securities.

Robert Steven Swiatek, Vice President Vice President of Nike Securities;
Analyst, Griffin, Kubic, Stephens & Thompson.

Robert D. Van Kampen, President Partner, Van Kampen Asset Management.
</TABLE>

Item 27: Principal Underwriters

(a) Nike Securities L.P. serves as principal underwriter of the
interests of the Fund. Nike Securities serves as principal underwriter
and depositor of the following investment companies registered as unit
investment trusts: the First Trust Combined Series, FT Series (formerly
known as the First Trust Special Situations Trust), the First Trust
Insured Corporate Trust, the First Trust of Insured Municipal Bonds, and
the First Trust GNMA.

(b)

<TABLE>
<CAPTION>
Positions and Offices
Name and Principal Business Address with Underwriter Positions and Offices with Fund
___________________________________ _____________________ _______________________________
<S> <C> <C>
Nike Securities Corporation General Partner None
1001 Warrenville Road
Lisle, IL 60532

Grace Partners of DuPage L.P. Limited Partner None

James A. Bowen President President, Chairman of the Board,
1001 Warrenville Road Chief Financial Officer, Trustee
Lisle, IL 60532

Ronald D. McAlister Managing Director None
1001 Warrenville Road
Lisle, IL 60532

Scott R. Hall Managing Director None
1001 Warrenville Road
Lisle, IL 60532

Page C-4

Frank L. Fichera Managing Director None
1001 Warrenville Road
Lisle, IL 60532

Richard A. Olson Managing Director None
1001 Warrenville Road
Lisle, IL 60532

Mark R. Bradley Chief Financial Officer Treasurer, Chief Financial Officer
1001 Warrenville Road and Chief Accounting Officer
Lisle, IL 60532

Carlos E. Nardo Senior Vice President None
1001 Warrenville Road
Lisle, IL 60532

Robert W. Bredemeier Senior Vice President None
1001 Warrenville Road
Lisle, IL 60532

David B. Field Senior Vice President Vice President
1001 Warrenville Road
Lisle, IL 60532

Andrew S. Roggensack Senior Vice President None
1001 Warrenville Road
Lisle, IL 60532

William S. Jardine General Counsel Secretary
1001 Warrenville Road
Lisle, IL 60532
</TABLE>

(c)Not Applicable.

Item 28.Location of Accounts and Records

First Trust Advisors L.P., 1001 Warrenville Road, Suite 300, Lisle,
Illinois 60532, maintains the Registrant's organizational documents,
minutes of meetings, contracts of the Registrant and all advisory
material of the investment adviser.

The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004-
2413, maintains all general and subsidiary ledgers, journals, trial
balances, records of all portfolio purchase and sales, and all other
requirement records not maintained by First Trust Advisors L.P., or
First Data Investor Services Group, Inc.

First Data Investor Services Group, Inc., 4400 Computer Drive,
Westborough, Massachusetts 01581, maintains all the required records in
its capacity as transfer, accounting, dividend payment and interest
holder service agent for the Registrant.

Item 29.Management Services

Not Applicable

Item 30.Undertakings

Not Applicable

Page C-5

SIGNATURES

Pursuant to the requirements of the Securities Act and the Investment
Company Act, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, duly authorized, in the
City of Lisle and the State of Illinois on the 30th day of September,
1999.

FIRST DEFINED PORTFOLIO FUND, LLC

By: /s/ James A. Bowen
James A. Bowen
President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person in
the capacity and on the date indicated.

Signature Title Date

/s/ Mark R. Bradley Treasurer Controller and Chief September 30, 1999
Mark R. Bradley Financial and Accounting Officer
James A. Bowen President, Chief Executive Officer,
Chairman and Trustee
Robert J. Bartel Trustee By /s/ James A. Bowen
James A. Bowen
Richard E. Erickson Trustee Attorney-in-Fact
Patrick M. Fitzgerald Trustee
Niel B. Nielson Trustee

Original powers of attorney authorizing, among others, W. Scott Jardine
and James A. Bowen to execute this Registration Statement, and
Amendments thereto, for each of the Trustees of Registrant on whose
behalf this Registration Statement is filed, has been executed and is
being filed with the Securities and Exchange Commission.

EXHIBIT INDEX

(a)(2) Form of Amendment and Restated Certificate of Formation of the
Registrant.

(a)(3) Form of Limited Liability Company Agreement of the Registrant.

(b) Form of Operating By-Laws of the Registrant.

(c)(1) Form of Establishment and Designation of Series of Membership
Interests.

(c)(2) Form of Amended and Restated Establishment and Designation of
Series of Membership Interests.

(d) Form of Investment Advisory and Management Agreement between
Registrant and First Trust Advisors L.P.

(e) Form of Distribution Agreement between Registrant and Nike Securities
L.P.

(g)(1) Form of Custodian Agreement between the Registrant and The Chase
Manhattan Bank.

(g)(2) Form of Foreign Custody Manager Agreement between the Registrant
and First Trust Advisors L.P.

(h)(1) Form of Services Agreement between Registrant and First Data
Investor Services Group, Inc.

(h)(2) Form of Administrative Services Agreement between Registrant and
American Skandia Life Assurance Corporation.

(i)(1) Form of Opinion and Consent of Chapman and Cutler.

(i)(2) Form of Opinion and Consent of Potter Anderson & Corroon.

(m) 12b-1 Service Plan.

(z) Original Powers of Attorney for Messrs. Bartel, Bowen, Erickson,
Fitzgerald, and Nielson, authorizing, among others, James A. Bowen and
W. Scott Jardine to execute the Registration Statement.

AMENDED AND RESTATED CERTIFICATE OF FORMATION
OF
FIRST DEFINED PORTFOLIO FUND, LLC

This Amended and Restated Certificate of Formation of FIRST DEFINED
PORTFOLIO FUND, LLC (the "LLC"), dated September __, 1999, has been duly
executed and is being filed by W. Scott Jardine, as an authorized
person, in accordance with the provisions of 6 Del. C. Section 18-208,
for purposes of amending and otherwise restating the original
Certificate of Formation of the LLC, which was filed on January 8, 1999
with the Secretary of State of the State of Delaware (the "Original
Certificate") under the name of First Defined Portfolio Management Fund
LLC to form a limited liability company under the Delaware Limited
Liability Company Act (6 Del. C. Section 18-101, et seq.). On June 8,
1999, the Original Certificate was amended by the filing of a
Certificate of Amendment to the Original Certificate (as so amended, the
"Certificate").

The Certificate is hereby amended and restated in its entirety to read
as follows:

FIRST: The name of the LLC formed hereby is:

First Defined Portfolio Fund, LLC

SECOND: The address of the registered office of the LLC in the State of
Delaware is:

1013 Centre Road, Wilmington, Delaware 19805

THIRD: The name and address of the registered agent for service of
process on the LLC in the State of Delaware are:

Corporation Service Company
1013 Centre Road
Wilmington, Delaware 19805

FOURTH: Pursuant to Section 18-215 of the Act, notice is hereby given
that the LLC has

series and that to the extent set forth in the Limited Liability Company
Agreement of the LLC, as amended and restated from time to time, the
debts, liabilities and obligations incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable only
against the assets of such series.

IN WITNESS WHEREOF, the undersigned has executed this Amended and
Restated Certificate of Formation as of the date first above written.

W. Scott Jardine
Authorized Person

LIMITED LIABILITY COMPANY AGREEMENT

FIRST DEFINED PORTFOLIO FUND, LLC
a Delaware Limited Liability Company

as of

January 8, 1999

LIMITED LIABILITY COMPANY AGREEMENT
OF
FIRST DEFINED PORTFOLIO MANAGEMENT FUND LLC

James A. Bowen (the "Member") hereby forms a limited liability company
pursuant to and in accordance with the Delaware Limited Liability
Company Act, 6 Del. C. Section 18-101, et seq. (the "Act") and hereby
declares the following to be the Limited Liability Company Agreement
(the "Agreement") of such limited liability company:

RECITALS:

WHEREAS, the parties have agreed to organize and operate a limited
liability company in accordance with the terms and subject to the
conditions set forth in this Agreement.

NOW, THEREFORE, for good and valuable consideration, the parties,
intending legally to be bound, agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1.Definitions. Whenever used herein, unless otherwise
required by the context or specifically provided:

(a)"Act" means the Delaware Limited Liability Company Act, as amended
from time to time.

(b)"Agreement" means this limited liability company agreement, as
amended from time to time.

(c)"Board of Trustees" refers initially to James A. Bowen and,
thereafter, to any other individuals who at the time in question have
been duly elected or appointed and qualified in accordance with Article
V hereof and are then in office; no member of the Board of Trustees
shall be deemed to be a "Manager" as defined in the Act, although the
Board of Trustees, collectively, shall be deemed to be the sole
"Manager" under the Act whose rights and duties are limited as set forth
herein.

(d)"Bylaws" shall mean the Operating Bylaws of the Company included
herewith as Exhibit A as amended from time to time.

(e)"Certificate" means the Certificate of Formation of the Company
provided for in the Act, as originally filed in the office of Secretary
of State of Delaware and as amended from time to time, as the context
may require.

(f)"Member" means a record owner of a Membership Interest.

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(g)"Membership Interests" shall mean a limited liability company
interest issued and authorized pursuant to Article IV hereof and having
the rights, preferences, and designations set forth therein, in this
Agreement, in the Bylaws, and, to the extent not inconsistent with this
Agreement, the Act.

(h)"Variable Annuity Owners" means the parties who have variable annuity
policies (the "Policies") with American Skandia Life Assurance
Corporation ("American Skandia") that utilize American Skandia Life
Assurance Corporation Variable Account B to fund the benefits of the
Policies and who have indirect rights in the Membership Interests
pursuant to the Policies into which such parties have entered.

(i)The "1940 Act" refers to the Investment Company Act of 1940 (and any
successor statute) and the Rules and Regulations thereunder, all as
amended from time to time; and

(j)The terms "Commission," "Interested Person," "Principal Underwriter"
and "Vote of a Majority of the Outstanding Voting Securities" shall have
the meanings ascribed to them in the 1940 Act.

ARTICLE II

FORMATION

Section 2.1. Organization. Pursuant to the Act, an authorized person of
the Company, W. Scott Jardine, filed the Certificate on January 8, 1999
establishing the Company as a Delaware limited liability company on that
date. Except as set forth in Section 2.3 hereof, in accordance with
Section 18-201(d) of the Act, this Agreement is effective as of
formation of the Company on January 8, 1999. Mr. Jardine and any other
person appointed by the Board of Trustees or the President of the
Company shall serve as an authorized person of the Company for purposes
of executing and filing with the Delaware Secretary of State any
amendments to the Certificate. Such an authorized person shall from
time to time hereafter, as may be required by law or as may be
determined by the Board of Trustees or the President of the Company, do
all filings, recordings and other acts as may be appropriate to enable
the Company to comply with the provisions of the Act.

Section 2.2. Intent. It is the intent of the Member that the Company
shall always be operated in a manner consistent with its treatment as a
"disregarded entity" for federal and state income tax purposes. The
Member shall not take any action inconsistent with the express intent of
the parties hereto.

Section 2.3. Name of the Company. The name under which the Certificate
of the Company was filed was "First Defined Portfolio Management Fund
LLC." Effective from and after June 8, 1999, the date the Certificate
was amended to reflect a change in name of the Company, the name of the
Company has been and continues to be "First Defined Portfolio Fund,
LLC." The Board of Trustees may change, and pursuant to Section 8.2
hereof shall change, the name of the Company from time to time, and the

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Company may do business under any other name or names determined by the
Board of Trustees.

Section 2.4. Purpose. The purpose of the Company is to transact any and
all lawful business to which the Member agrees and for which limited
liability companies may be organized under the Act. The Company shall
have any and all powers necessary or desirable to carry out the purposes
and business of the Company, to the extent that the same is lawfully
exercised by limited liability companies ("LLCs") under the Act.

Section 2.5. Waiver of Compliance. No provision of this Agreement shall
be effective to require a waiver of compliance with any provisions of
the Securities Act of 1933, as amended, or the 1940 Act, or of any valid
rule, regulation or order of the Commission thereunder.

Section 2.6. Term. The Company shall have perpetual existence, unless
sooner terminated as provided in this Agreement or the Act.

Section 2.7. Member. (a) There shall be a single Member. The Member
shall be entitled to vote on all Company matters in which a Member is
entitled to vote or consent pursuant to this Agreement, the By-laws,
and, to the extent not inconsistent with this Agreement or the By-laws,
the Act. As of the date of this Agreement, the Member shall initially
be James A. Bowen. Mr. Bowen shall transfer his Membership Interests
and his status as a Member to American Skandia Life Assurance
Corporation Variable Account B ("Variable Account B"), or any successor
thereof pursuant to a merger or other reorganization. In connection
with such transfer, Variable Account B shall be deemed admitted to the
Company as a substitute Member in respect of Mr. Bowen's Membership
Interests. Upon the transfer, Mr. Bowen shall be deemed withdrawn as
the Member of the Company in respect of such Membership Interests. At
no point may the Company have more than one Member. The address,
capital contribution and the Membership Interests of the sole Member are
set forth on Exhibit B hereto, as it may be amended from time to time.

(b)The Member shall have the power to exercise any and all rights or
powers granted to the Member pursuant to the express terms of this
Agreement or as otherwise required by the Act. Except as otherwise
specifically provided by this Agreement or required by the Act, the
Member shall not have the power to act for or on behalf of, or to bind,
the Company.

Section 2.8. Variable Annuity Owners and Voting Rights. At such time as
Variable Account B is admitted as the Member of the Company, to the
extent required by applicable laws, regulations and Commission
positions, the Member is obligated to vote each Membership Interest in a
manner consistent with the instructions of the Variable Annuity Owner,
if any, who has an indirect right in the Membership Interest pursuant to
a Policy issued by American Skandia.

Accordingly, to the extent so required by applicable laws, regulations
and Commission positions, any reference in this Agreement, the By-laws,
or the Act to the voting rights of the Member or of the Membership
Interests, quorum requirements or other matters requiring the vote or
consent of the Member or of the Membership Interests, shall be construed

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to require the Member to vote, consent or otherwise act in a manner that
is consistent with the instructions of the Variable Annuity Owners.

ARTICLE III

REGISTERED AGENT; PRINCIPAL PLACE OF BUSINESS

Section 3.1.Registered Office; Principal Place of Business. The
registered office of the Company in the State of Delaware shall be
located at 1013 Centre Road, in the City of Wilmington, County of New
Castle, or at any other place within the State of Delaware upon which
the Board of Trustees agree. The principal office and place of business
of the Company in the State of Illinois shall be located at 1001
Warrenville Road, Suite 300, Lisle, Illinois 60532, or at any other
place which the Board of Trustees shall determine.

Section 3.2.Registered Agent. The name and address of the Company's
resident agent in the State of Delaware shall be The Corporation Service
Company, 1013 Centre Road, Wilmington, Delaware 19805. At any time, the
Board of Trustees may designate another registered agent and/or
registered office.

ARTICLE IV

MEMBERSHIP INTERESTS

Section 4.1.Membership Interests. The Membership Interests in the
Company shall be divided into such transferable Membership Interests, of
such series or classes, and of such designations and with such rights,
preferences, privileges and restrictions as shall be determined by the
Board of Trustees in its sole discretion, without Member approval, from
time to time and shall initially consist of one class of transferable
Membership Interests. The number of Membership Interests is unlimited
and each Membership Interest shall be fully paid and nonassessable. The
Board of Trustees shall have full power and authority, in its sole
discretion and without obtaining any prior authorization or vote of the
Member of the Company (including in its capacity as the Member of any
series or class of Membership Interests), to create and establish (and
to change in any manner) Membership Interests or any series or classes
thereof with such preferences, voting powers, rights and privileges as
the Board of Trustees may from time to time determine; to divide or
combine the Membership Interests or the Membership Interests of any
series or classes thereof into a greater or lesser number; to classify
or reclassify any issued Membership Interests into one or more series or
classes of Membership Interests; to abolish any one or more series or
classes of Membership Interests; to create Membership Interests that may
be senior to outstanding Membership Interests; and to take such other
action with respect to the Membership Interests as the Board of Trustees
may deem desirable. Except as may be specifically set forth in Section
4.2 of this Article IV or in an instrument establishing and designating
classes or series of Membership Interests, the Membership Interests
shall have the powers, preferences, rights, qualifications, limitations
and restrictions described below:

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(i) In the event of the termination of the Company the Member shall be
entitled to receive pro rata the net distributable assets of the Company;

(ii) The Member shall be entitled to one vote for each Membership
Interest held on each matter submitted to a vote of the Member as a
single class. However, where separate class or series voting is
specifically provided for herein or pursuant to applicable law, only
Membership Interests of such class or series are entitled to vote.

(iii) Distributions to the Member, when made by the Board of Trustees,
which shall be paid in cash or reinvested in full and fractional
Membership Interests of the Company as the Board of Trustees shall direct;

(iv) Any Membership Interests purchased or redeemed by the Company shall
be retired automatically;

(v) Membership Interests may be issued from time to time, without the
vote of the Member (or, if the Board of Trustees in its sole discretion
deem advisable, with a vote of the Member), either for cash or for such
other consideration (which may be in any one or more instances a certain
specified consideration or certain specified considerations) and on such
terms as the Board of Trustees, from time to time, may deem advisable,
and the Company may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption
of liabilities); and

(vi) The Company may issue Membership Interests in fractional
denominations to the same extent as its whole Membership Interests, and
Membership Interests in fractional denominations shall be Membership
Interests having proportionately to the respective fractions represented
thereby all the rights of whole Membership Interests, including, without
limitation, the right to vote, the right to receive dividends and
distributions and the right to participate upon termination of the
Company. The Board of Trustees may from time to time, without the vote
of the Member, divide or combine Membership Interests into a greater or
lesser number without thereby changing the Member's proportionate
Membership Interests in the Company.

Section 4.2.Establishment of Series and Classes of Membership Interests.

(a) Series. The Board of Trustees, in its sole discretion, without
obtaining any prior authorization or vote of the Member of the Company
or of the Member of any series or class of Membership Interests, from
time to time may authorize the division of Membership Interests into two
or more series, the number and relative rights, privileges and
preferences of which shall be established and designated by the Board of
Trustees, in its discretion, upon and subject to the following provisions:

(i) All Membership Interests shall be identical except that there may be
such variations as shall be fixed and determined by the Board of
Trustees between different series as to purchase price, right of
redemption, and the price, terms and manner of redemption, and special
and relative rights as to dividends and on liquidation.

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(ii) The number of Membership Interests of each series that may be issued
shall be unlimited. The Board of Trustees may classify or reclassify
any unissued Membership Interests or any Membership Interests previously
issued and reacquired of any series into one or more series that may be
established and designated from time to time.

(iii) The power of the Board of Trustees to invest and reinvest the
assets of the Company allocated or belonging to any particular series
shall be governed by Section 6.1 of Article VI hereof unless otherwise
provided in the instrument of the Board of Trustees establishing such
series which is hereinafter described.

(iv) Each Membership Interest of a series shall represent an interest in
the net assets allocated or belonging to such series only, and such
interest shall not extend to the assets of the Company generally.
Dividends and distributions on Membership Interests of a particular
series may be paid with such frequency as the Board of Trustees may
determine, which may be monthly or otherwise, pursuant to a standing
vote or votes adopted only once or with such frequency as the Board of
Trustees may determine, to the Member, as the sole holder of Membership
Interests of such series, from such of the income and capital gains,
accrued or realized, from the assets belonging to that series. All
dividends and distributions on Membership Interests of a particular
series shall be distributed pro rata to the Member, as the sole holder
of Membership Interests of that series, in proportion to the number of
Membership Interests of that series held by the Member at the date and
time of record established for the payment of such dividends or
distributions. Membership Interests of any particular series of the
Company may be redeemed solely out of the assets of the Company
allocated or belonging to that series. Upon liquidation or termination
of a series of the Company, the Member, as the sole holder of Membership
Interests of such Series, shall be entitled to receive a pro rata share
of the net assets of such series only.

(v) Notwithstanding any provision hereof or in an instrument establishing
and designating classes or series of Membership Interests to the
contrary, on any matter submitted to a vote of the Member of the
Company, all Membership Interests then entitled to vote shall be voted
by individual series, except that (i) when required by the 1940 Act to
be voted in the aggregate, Membership Interests shall not be voted by
individual series, (ii) when the Board of Trustees has determined that
the matter affects only the interests of the Member in its capacity as
holder of one or more series, only the Member in its capacity as a
holder of such series shall be entitled to vote thereon, and (iii) all
series shall vote together on the election of Trustees.

(vi) The establishment and designation of any series of Membership
Interests shall be effective upon the execution by a majority of the
Board of Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such series or as
otherwise provided in such instrument.

(b)Classes. Notwithstanding anything in this Agreement to the contrary,
the Board of Trustees may, in its discretion, without obtaining any

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prior authorization or vote of the Member of the Company (including in
its capacity as holder of any series or class of Membership Interests),
from time to time authorize the division of Membership Interests of the
Company or any series thereof into Membership Interests of one or more
classes upon the execution by a majority of the Board of Trustees of an
instrument setting forth such establishment and designation and the
relative rights and preferences of such class or classes. The Board of
Trustees may create new classes that may be senior to existing classes.
All Membership Interests of a class shall be identical with each other
and with the Membership Interests of each other classes of the same
series except for such variations between classes as may be approved by
the Board of Trustees and set forth in such instrument of establishment
and designation and be permitted under the 1940 Act or pursuant to any
exemptive order issued by the Commission.

Section 4.3.Ownership of Membership Interests. The ownership and
transfer of Membership Interests shall be recorded on the books of the
Company or its transfer or similar agent. The Board of Trustees may
make such rules as they consider appropriate for the transfer of
Membership Interests and similar matters. The record books of the
Company, as kept by the Company or any transfer or similar agent of the
Company, shall be conclusive as to who is the Member.

Section 4.4.No Preemptive Rights, Etc. The Member shall not have any
right to acquire, purchase or subscribe for any Membership Interests or
securities of the Company which it may hereafter issue or sell, other
than such right, if any, as the Board of Trustees in its discretion may
determine. The Member shall have no appraisal rights with respect to
its Membership Interests and, except as otherwise determined by
resolution of the Board of Trustees in its sole discretion, shall have
no exchange or conversion rights with respect to its Membership Interests.

Section 4.5.Assets and Liabilities of Series. In the event that the
Company, pursuant to Section 4.2 of this Article IV, shall authorize the
division of Membership Interests into two or more series, the following
provisions shall apply:

(a)All consideration received by the Company for the issue or sale of
Membership Interests of a particular series, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever form
the same may be, shall irrevocably belong to that series for all
purposes and shall be segregated from the assets of any other series,
and shall be so recorded upon the books of the Company as set forth in
the instrument of establishment and designation for such Membership
Interests. Such consideration, assets, income, earnings, profits and
proceeds, including any proceeds derived from the sale, exchange or
liquidation of such assets and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may be,
together with any General Asset Items (as hereinafter defined) allocated
to that series as provided in the following sentence, are herein
referred to as "assets belonging to" that series. In the event that
there are any assets, income, earnings, profits or proceeds thereof,
funds or payments which are not readily identifiable as belonging to any
particular series (collectively "General Asset Items"), the Board of

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Trustees shall allocate such General Asset Items to and among any one or
more of the series created from time to time in such manner and on such
basis as it, in its sole discretion, deem fair and equitable; and any
General Asset Items allocated to a particular series shall thereafter
constitute "assets belonging to" that series. Each such allocation by
the Board of Trustees shall be conclusive and binding upon the Member in
its capacity as a holder of any and all series for all purposes.

(b)The assets belonging to a particular series shall be charged with the
liabilities of the Company in respect of that series and with all
expenses, costs, charges and reserves attributable to that series and
shall be so recorded upon the books of the Company. Liabilities,
expenses, costs, charges and reserves charged to a particular series,
together with any General Liability Items (as hereinafter defined)
allocated to that series as provided in the following sentence, are
herein referred to as "liabilities belonging to" that series and shall
be segregated from the liabilities of any other series. In the event
there are any general liabilities, expenses, costs, charges or reserves
of the Company which are not readily identifiable as belonging to any
particular series (collectively "General Liability Items"), the Board of
Trustees shall allocate and charge such General Liability Items to and
among any one or more of the series created from time to time in such
manner and on such basis as the Board of Trustees in its sole discretion
deem fair and equitable; and any General Liability Items so allocated
and charges to a particular series shall thereafter constitute
"liabilities belonging to" that series. Each such allocation by the
Board of Trustees shall be conclusive and binding upon the Member in its
capacity as a holder of any and all series for all purposes.

Section 4.6.Status of Membership Interests and Limitation of Personal
Liability. Membership Interests shall be deemed to be personal property
giving only the rights provided in this instrument. The Member by
virtue of having become the Member shall be held to have expressly
assented and agreed to the terms of this Agreement and to have become a
party thereto. Ownership of Membership Interests shall not entitle the
Member to any title in or to the whole or any part of the Company
property or right to call for a partition or division of the same or for
an accounting. Except for explicitly set forth herein, neither the
Trustees, nor any officer, employee or agent of the Company shall have
any power to bind the Member personally or to call upon the Member for
the payment of any sum of money or assessment whatsoever other than such
as the Member may at any time personally agree to pay by way of
subscription for any Membership Interests or otherwise.

ARTICLE V

THE TRUSTEES

Section 5.1. Management of the Company. The business and affairs of the
Company shall be managed by the Board of Trustees, and they shall have
all powers necessary and desirable to carry out that responsibility.

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Section 5.2. Qualification and Number. Each Trustee shall be a natural
person. A Trustee need not be the Member, a citizen of the United
States, or a resident of the State of Delaware. By the vote or consent
of a majority of the Trustees then in office, the Board of Trustees may
fix the number of Trustees at a number not less than one (1) nor more
than twelve (12) and may fill the vacancies created by any such increase
in the number of Trustees. Except as determined from time to time by
resolution of the Board of Trustees, no decrease in the number of
Trustees shall have the effect of removing any Trustee from office prior
to the expiration of his term, but the number of Trustees may be
decreased in conjunction with the removal of a Trustee pursuant to
Section 5.4 of this Article V.

Section 5.3. Term and Election. Each Trustee shall hold office until the
next meeting of the Member is called, in accordance with this Agreement
and the By-Laws, for the purpose of considering the election or re-
election of such Trustee or of a successor to such Trustee, and until
his successor is elected and qualified, and any Trustee who is appointed
by the Board of Trustees in the interim to fill a vacancy as provided
hereunder shall have the same remaining term as that of his predecessor,
if any, or such term as the Board of Trustees may determine. Any
vacancy resulting from a newly created Trusteeship or the death,
resignation, retirement, removal, or incapacity of a Trustee may be
filled by the affirmative vote or consent of a majority of the Trustees
then in office.

Section 5.4. Resignation and Removal. Any Trustee may resign his
position or retire as a Trustee (without need for prior or subsequent
accounting) by an instrument in writing signed by him and delivered or
mailed to the Chairman, if any, the President or the Secretary and such
resignation or retirement shall be effective upon such delivery, or at a
later date according to the terms of the instrument. Any Trustee who
has become incapacitated by illness or injury as determined by a
majority of the other Trustees, may be retired by written instrument
signed by a majority of the other Trustees. Except as aforesaid, any
Trustee may be removed from office only for "Cause" (as hereinafter
defined) and only (i) by action of at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding Membership Interests, or (ii) by
written instrument, signed by at least sixty-six and two-thirds percent
(66-2/3%) of the remaining Trustees, specifying the date when such
removal shall become effective. "Cause" shall require willful
misconduct, dishonesty, fraud or a felony conviction as determined by at
least sixty-six and two-thirds percent (66-2/3%) of the remaining
Trustees.

Section 5.5. Vacancies. The death, declination, resignation, retirement,
removal, or incapacity, of the Trustees, or any one of them, shall not
operate to annul the Company or to revoke any existing agency created
pursuant to the terms of this Agreement. Whenever a vacancy in the
number of Trustees shall occur, until such vacancy is filled as provided
herein, or the number of Trustees as fixed is reduced, the Trustees in
office, regardless of their number, shall have all the powers granted to
the Board of Trustees, and during the period during which any such
vacancy shall occur, only the Trustees then in office shall be counted
for the purposes of the existence of a quorum or any action to be taken
by such Board of Trustees.

Section 5.6. Voting Requirements. In addition to the voting requirements
imposed by law or by any other provision of this Agreement, the
provisions set forth in this Article V may not be amended, altered or
repealed in any respect, nor may any provision inconsistent with this

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Article V be adopted, without the affirmative vote of at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding Membership
Interests. In the event the outstanding Membership Interests of any
series or class are required by law or any other provision of this
Agreement to approve such an action by a class vote of such Membership
Interests, such action must be approved by at least sixty-six and two-
thirds percent (66-2/3%) of the outstanding Membership Interests of such
series or class or such other percentage as may be required by law or
any other provision of this Agreement.

ARTICLE VI

POWERS OF TRUSTEES

Section 6.1. Powers. The Board of Trustees in all instances shall have
full, absolute and exclusive power, control and authority over the
Company assets and the business and affairs of the Company. The Board
of Trustees shall have full power and authority to do any and all acts
and to make and execute any and all contracts and instruments that they
may consider necessary or appropriate in connection with the management
of the Company. The enumeration of any specific power herein shall not
be construed as limiting the aforesaid powers. In construing the
provisions of this Agreement, there shall be a presumption in favor of
the grant of powers and authority to the Board of Trustees. The Member,
in its capacity as the Member, shall not have any power to act for, sign
for or do any act, that would bind the Company except as set forth
herein or as determined by the Board of Trustees. Subject to any
applicable limitation in this Agreement, the Board of Trustees shall
have power and authority:

(a)To invest and reinvest in, to buy or otherwise acquire, to hold, for
investment or otherwise, to sell or otherwise dispose of, to lend or to
pledge, to trade in or deal in securities or interests of all kinds,
however evidenced, or obligations of all kinds, however evidenced, or
rights, warrants, or contracts to acquire such securities, interests, or
obligations, of any private or public company, corporation, association,
general or limited partnership, trust or other enterprise or
organization foreign or domestic, or issued or guaranteed by any
national or state government, foreign or domestic, or their agencies,
instrumentalities or subdivisions (including but not limited to, bonds,
debentures, bills, time notes and all other evidences or indebtedness);
negotiable or nonnegotiable instruments; any and all options and futures
contracts, derivatives or structured securities; government securities
and money market instruments (including but not limited to, bank
certificates of deposit, finance paper, commercial paper, bankers
acceptances, and all kinds of repurchase agreements) and, without
limitation, all other kinds and types of financial instruments;

(b)To adopt Bylaws not inconsistent with this Agreement providing for
the conduct of the business of the Company and to amend and repeal them
to the extent that they do not reserve that right to the Member. Such
Bylaws are attached hereto as Exhibit A and may be amended from time to
time;

Page 10

(c)To elect and remove such officers and appoint and terminate such
agents and authorized persons as they consider appropriate;

(d)To set record dates for any purpose;

(e)To delegate such authority as they consider desirable to any officers
of the Company and to any investment adviser, investment subadviser,
transfer agent, custodian, underwriter, administrator or other
independent contractor or agent;

(f)Subject to Section 9.1 hereof, to merge or consolidate the Company
with any other corporation, association, trust or other organization; or
to sell, convey, transfer, or lease all or substantially all of the
assets of the Company;

(g)To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Board of Trustees shall deem proper, granting to such person or persons
such power and discretion with relation to securities or property as the
Board of Trustees shall deem proper;

(h)To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;

(i)To hold any security or property, whether in bearer, unregistered or
other negotiable form; or either in their or the Company's name or in
the name of a custodian or a nominee or nominees;

(j)To issue, sell, repurchase, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer and otherwise deal in a Membership
Interest and in any options, warrants or other rights to purchase a
Membership Interest;

(k)To set apart, from time to time, out of any funds of the Company a
reserve or reserves for any proper purpose, and to abolish any such
reserve;

(l)To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or
property of which is held in the Company; to consent to any contract,
lease, mortgage, purchase, or sale of property by such corporation or
issuer, and to pay calls or subscriptions with respect to any security
held in the Company;

(m)To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Company or any matter in controversy including, but not
limited to, claims for taxes;

(n)To make distributions to the Member;

(o)To borrow money and to pledge, mortgage, or hypothecate the assets of
the Company;

Page 11

(p)To establish, from time to time, a minimum total investment for the
Member, and to require the redemption of the Membership Interests of the
Member if the investment is less than such minimum upon such terms as
shall be established by the Board of Trustees;

(q)To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Board of Trustees shall deem proper, and to agree to
pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Board of Trustees shall deem
proper;

(r)To purchase and pay for out of Company property such insurance as
they may deem necessary or appropriate for the conduct of the business
of the Company, including, without limitation, insurance policies
insuring the assets of the Company and payment of distributions and
principal on its portfolio investments, and insurance policies insuring
the Member, Trustees, officers, employees, agents, investment advisers,
investment subadvisers or managers, principal underwriters, or
independent contractors of the Company individually against all claims
and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as Member,
Trustee, officer, employee, agent, investment adviser, subadviser or
manager, principal underwriter, or independent contractor, whether or
not any such action may be determined to constitute negligence, and
whether or not the Company would have the power to indemnify such person
against such liability; and

(s)To pay pensions for faithful service, as deemed appropriate by the
Board of Trustees, and to adopt, establish and carry out pension, profit-
sharing, share bonus, Membership Interest purchase, savings, thrift and
other retirement, incentive and benefit plans, trusts and provisions,
including the purchasing of life insurance and annuity contracts as a
means of providing such retirement and other benefits, for any or all of
the Trustees, officers, employees and agents of the Company.

Any determination made by or pursuant to the direction of the Board of
Trustees in good faith and consistent with the provisions of this
Agreement shall be final and conclusive and shall be binding upon the
Company and the Member, including, but not limited to the following
matters: the amount of the assets, obligations, liabilities and expenses
of the Company; the amount of the net income of the Company from
dividends, capital gains, interest or other sources for any period and
the amount of assets at any time legally available for the payment of
dividends or distributions; the amount, purpose, time of creation,
increase or decrease, alteration or cancellation of any reserves or
charges and the propriety thereof (whether or not any obligation or
liability for which such reserves or charges were created shall have
been paid or discharged); the market value, or any quoted price to be
applied in determining the market value, of any security or other asset
owned or held by the Company; the fair value of any security for which

Page 12

quoted prices are not readily available, or of any other asset owned or
held by the Company; the number of Membership Interests of the Company
issued; the net asset value per Membership Interest; any matter relating
to the acquisition, holding and depositing of securities and other
assets by the Company; any question as to whether any transaction
constitutes a purchase of securities on margin, a short sale of
securities, a borrowing, or an underwriting of the sale of, or
participation in any underwriting or selling group in connection with
the public distribution of, any securities, and any matter relating to
the issue, sale, redemption, repurchase, and/or other acquisition or
disposition of Membership Interests of the Company. No provision of
this Agreement shall be effective to protect or purport to protect any
Trustee or officer of the Company against any liability to the Company
or to its security holders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.

Section 6.2. Manner of Acting; Operating Bylaws. The Bylaws shall make
provision from time to time for the manner in which the Board of
Trustees may take action, including, without limitation, at meetings
within or without Delaware, including meetings held by means of a
conference telephone or other communications equipment, or by written
consents, the quorum and notice, if any, that shall be required for any
meeting or other action, and the delegation of some or all of the power
and authority of the Board of Trustees to any one or more committees
which they may appoint from its own number, and terminate, from time to
time.

ARTICLE VII

EXPENSES OF THE COMPANY

The Trustees shall have the power to reimburse themselves from the
Company property for its expenses and disbursements, to pay reasonable
compensation to themselves from the Company property, and to incur and
pay out of the Company property any other expenses which in the opinion
of the Board of Trustees are necessary or incidental to carry out any of
the purposes of this Agreement, or to exercise any of the powers of the
Trustees hereunder.

ARTICLE VIII

INVESTMENT ADVISER, UNDERWRITER
AND TRANSFER AGENT

Section 8.1. Investment Adviser. The Company may enter into written
contracts with one or more persons (which term shall include any firm,
corporation, trust or association), to act as investment adviser or
investment subadviser to the Company, and as such to perform such
functions as the Board of Trustees may deem reasonable and proper,
including, without limitation, investment advisory, management,
research, valuation of assets, clerical and administrative functions,
under such terms and conditions, and for such compensation, as the Board
of Trustees may in its discretion deem advisable. However, the Board of
Trustees is responsible for the general supervision of the duties
performed for the Company by any such party.

Page 13

Section 8.2. Change of Name. Upon the termination of any contract with
First Trust Advisors L.P., or any corporation affiliated with Nike
Securities L.P., acting as investment adviser or manager, the Board of
Trustees is hereby required to promptly change the name of the Company
to a name which does not include "First Defined Portfolio", "First
Trust" or "Nike" or any approximation or abbreviation thereof.

Section 8.3. Underwriter; Transfer Agent. The Company may enter into a
written contract or contracts with an underwriter or underwriters or
distributor or distributors whereby the Company may either agree to sell
Membership Interests to the other party or parties to the contract or
appoint such other party or parties its sales agent or agents for such
Membership Interests and with such other provisions as the Board of
Trustees may deem reasonable and proper, and the Board of Trustees may
in its discretion from time to time enter into transfer agency,
administrative services and/or Member service contract(s), in each case
with such terms and conditions, and providing for such compensation, as
the Board of Trustees may in its discretion deem advisable.

Section 8.4. Parties to Contract. Any contract of the character
described in Sections 8.1 and 8.3 of this Article VIII or in Article X
hereof may be entered into with any corporation, firm, partnership,
trust or association, including, without limitation, the investment
adviser, any investment subadviser or an affiliate of the investment
adviser or investment subadviser, although one or more of the Board of
Trustees or officers of the Company may be an officer, director,
trustee, shareholder, or member of such other party to the contract, or
otherwise interested in such contract and no such contract shall be
invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable
merely by reason of such relationship for any loss or expense to the
Company under or by reason of said contract or accountable for any
profit realized directly or indirectly therefrom, provided that the
contract when entered into was not inconsistent with the provisions of
this Article VIII, Article X, or the Bylaws, the parties hereto hereby
agreeing that no such inconsistency exists between the terms hereof and
any provision of that certain Distribution Agreement, Services
Agreement, Fund Participation Agreement, Administrative Services
Agreement, Custody Agreement, License and Sub-License Agreements,
Investment Advisory and Management Agreement, Name Agreement, Foreign
Custody Management Agreement, Share Purchase Agreement and Fund
Participation Agreement each of which having been approved by the Board
of Directors involving the Company and various service providers. The
same person (including a firm, corporation, partnership, trust or
association) may be the other party to contracts entered into pursuant
to Sections 8.1 and 8.3 above or Article X, and any individual may be
financially interested or otherwise affiliated with persons who are
parties to any or all of the contracts mentioned in this Section 8.4.

ARTICLE IX

MEMBER'S VOTING POWERS AND MEETINGS

Section 9.1.Voting Powers. The Member shall have power to vote only:
(a) for the election or removal of Trustees as provided in Article V,
(b) with respect to any investment advisory or management contract to

Page 14

the extent required by the 1940 Act, (c) with respect to any termination
of the Company or a series thereof to the extent and as provided in this
Section 9.1, (d) with respect to any amendment of this Agreement to the
extent and as provided in Section 13.4, (e) with respect to a merger or
consolidation of the Company or any series thereof with any corporation,
association, trust or other organization or a reorganization or
recapitalization of the Company or series thereof, or a sale, lease or
transfer of all or substantially all of the assets of the Company or any
series thereof (other than in the regular course of the Company's
investment activities) to the extent and as provided in this Section
9.1, and (f) with respect to such additional matters relating to the
Company as may be required by law, the 1940 Act, this Agreement, the
Bylaws of the Company, or any registration of the Company with the
Commission or any State, or as the Board of Trustees may consider
necessary or desirable. As provided in Section 2.8 of this Agreement,
to the extent required by applicable laws, regulations and Commission
positions, the Member is required to submit matters requiring a vote to
the Variable Annuity Owners and to vote each Membership Interest in
accordance with the instructions of the Variable Annuity Owner who has
an indirect right in the Membership Interest pursuant to a Policy issued
by American Skandia.

An affirmative vote of at least sixty-six and two-thirds percent (66-
2/3%) of the outstanding Membership Interests of the Company (or, in the
event of any action set forth below affecting only one or more series or
classes of the Company, an affirmative vote of at least sixty-six and
two-thirds percent of the outstanding Membership Interests of such
affected series or class) shall be required to approve, adopt or
authorize (i) a merger or consolidation of the Company or a series of
the Company with any corporation, association, trust or other
organization or a reorganization or recapitalization of the Company or a
series of the Company, (ii) a sale, lease or transfer of all or
substantially all of the assets of the Company or series of the Company
(other than in the regular course of the Company's investment
activities), or (iii) a termination of the Company or a series of the
Company (other than a termination by the Board of Trustees as provided
for in Section 13.1 hereof), unless in any case such action is
recommended by the Board of Trustees, in which case the affirmative Vote
of a Majority of the Outstanding Voting Securities of the Company or the
affected series or class shall be required.

Section 9.2. Meetings. Meetings of the Member of the Company ( in its
capacity as such or in the particular capacity as holder of the
Membership Interests of one or more series thereof) may be called and
held from time to time, for the purpose of taking action upon any matter
requiring the vote or authority of the Member as herein provided or upon
any other matter deemed by the Board of Trustees to be necessary or
desirable. Such meetings are not required except as set forth herein or
in the Bylaws. Meetings of the Member shall be held at such place
within the United States as shall be fixed by the Board of Trustees, and
stated in the notice of the meeting. Meetings of the Member may be
called by the Board of Trustees and shall be called by the Board of
Trustees if the Board of Trustees receives written requests representing
at least one-tenth of the outstanding Membership Interests entitled to
vote. The Member shall be entitled to at least ten days' written notice
of any meeting, except where the meeting is an adjourned meeting and the
date, time and place of the meeting were announced at the time of the
adjournment.

Page 15

Section 9.3. Quorum and Action. (a) The Trustees shall set in the Bylaws
the quorum required for the transaction of business by the Member at a
meeting, which quorum shall in no event be less than thirty percent
(30%) of the Membership Interests entitled to vote at such meeting. If
a quorum is present when a duly called or held meeting is convened, the
Membership Interests present may continue to transact business until
adjournment, even though the withdrawal of a number of Membership
Interests originally present leaves less than the proportion or number
otherwise required for a quorum.

(b)The Member shall take action by the affirmative vote of a majority,
except in the case of the election of the Board of Trustees which shall
only require a plurality, of the Membership Interests present in person
or by proxy and entitled to vote at a meeting of the Member at which a
quorum is present, except as may be otherwise required by the 1940 Act
or any provision of this Agreement or the Bylaws. As provided in
Section 2.8 of this Agreement, to the extent required by applicable
laws, regulations and Commission positions, the Member is required to
submit matters requiring a vote to the Variable Annuity Owners and to
vote each Membership Interest in accordance with the instructions of the
Variable Annuity Owner who has an indirect right in the Membership
Interest pursuant to a Policy issued by American Skandia.

Section 9.4. Voting. Each whole Membership Interest shall be entitled to
one vote as to any matter on which it is entitled to vote and each
fractional Membership Interest shall be entitled to a proportionate
fractional vote, except that Membership Interests held in the treasury
of the Company shall not be voted. In the event that there is more than
one series of the Membership Interests, Membership Interests shall be
voted by individual series on any matter submitted to a vote of the
Member of the Company except as provided in Sections 4.2(a)(v) and
4.2(b). There shall be no cumulative voting in the election of Board of
Trustees or on any other matter submitted to a vote of the Member.
Membership Interests may be voted in person or by proxy. Until
Membership Interests are issued, the Board of Trustees may exercise all
rights of the Member and may take any action required or permitted by
law, this Agreement or the Bylaws of the Company to be taken by the
Member.

Section 9.5. Action by Written Consent in Lieu of Meeting of the Member.
Any action required or permitted to be taken at a meeting of the Member
may be taken without a meeting by written action signed by the Member in
the respective capacity as holder of whichever Membership Interests are
otherwise required hereunder to be entitled to vote with respect to such
action. The written action is effective when it has been signed by all
of those parties, unless a different effective time is provided in the
written action.

ARTICLE X

CUSTODIAN

All securities and cash of the Company shall be held by one or more
custodians and subcustodians, each meeting the requirements for a
custodian contained in the 1940 Act, or shall otherwise be held in
accordance with the 1940 Act.

Page 16

ARTICLE XI

DISTRIBUTIONS AND REDEMPTIONS

Section 11.1. Distributions. The Board of Trustees may in its sole
discretion from time to time declare and pay, or may prescribe and set
forth in a duly adopted vote or votes of the Board of Trustees, the
bases and time for the declaration and payment of, such dividends and
distributions to the Member as they may deem necessary or desirable,
after providing for actual and accrued expenses and liabilities
(including such reserves as the Board of Trustees may establish)
determined in accordance with good accounting practices.

Section 11.2. Redemption of Membership Interests. All Membership
Interests of the Company shall be redeemable as directed by the Member
in accordance with this Agreement, at the redemption price determined in
the manner set out in this Agreement. The Company shall redeem the
Membership Interests of the Company or any series or class thereof at
the price determined as hereinafter set forth, upon the appropriately
verified application of the Member (or upon such other form of request
as the Board of Trustees may determine) at such office or agency as may
be designated from time to time for that purpose by the Board of
Trustees. The Board of Trustees may from time to time specify
additional conditions, not inconsistent with the 1940 Act, regarding the
redemption of Membership Interests in the Company's then effective
prospectus under the Securities Act of 1933.

Section 11.3. Redemption Price. Membership Interests shall be redeemed
at their net asset value (less any applicable redemption fee or sales
charge) determined as set forth in Section 11.7 of this Article XI as of
such time as the Board of Trustees shall have theretofore prescribed by
resolution. In the absence of such resolution, the redemption price of
Membership Interests submitted for redemption shall be the net asset
value of such Membership Interests next determined as set forth in such
Section hereof after receipt of such application.

Section 11.4. Payment. Payment of the redemption price of Membership
Interests of the Company or any series or class thereof shall be made in
cash or in property or partly in cash and partly in property to the
Member at such time and in the manner, not inconsistent with the 1940
Act or other applicable laws, as may be specified from time to time in
the Company's then effective prospectus under the Securities Act of 1933.

Section 11.5. Redemption of Member's Interest. The Board of Trustees, in
its sole discretion, may cause the Company to redeem all of the
Membership Interests of the Company or one or more series of the Company
held by the Member if the value of such Membership Interests held by the
Member is less than the minimum amount established from time to time by
the Board of Trustees.

Section 11.6. Suspension of Right of Redemption. Notwithstanding the
foregoing, the Company may postpone payment of the redemption price and
may suspend the right of the Member to require the Company to redeem
Membership Interests (a) during any period when the New York Stock
Exchange (the "Exchange") is closed (other than customary weekend and

Page 17

holiday closings), (b) when trading in the markets the Company normally
utilizes is restricted, or an emergency exists as determined by the
Commission so that disposal of the Company's investments or
determination of its net asset value is not reasonably practicable, or
(c) for such other periods as the Commission may by order, rule or
otherwise permit.

Section 11.7. Determination of Net Asset Value and Valuation of Portfolio
Assets. The Board of Trustees may in its sole discretion from time to
time prescribe and shall set forth in the Bylaws or in a duly adopted
vote or votes of the Board of Trustees such bases and times for
determining the per Membership Interest net asset value of the
Membership Interests and the valuation of portfolio assets as they may
deem necessary or desirable.

The Company may suspend the determination of net asset value during any
period when it may suspend the right of the Member to require the
Company to redeem Membership Interests.

ARTICLE XII

LIMITATION OF LIABILITY AND INDEMNIFICATION

Section 12.1. Limitation of Liability. No personal liability for any
debt or obligation of the Company or any Series shall attach to any
Trustee, Member, officer, employee or authorized person of the Company.
Without limiting the foregoing, a Trustee shall not be responsible for
or liable in any event for any neglect or wrongdoing of any officer,
agent, employee, investment adviser, subadviser, authorized person,
principal underwriter or custodian of the Company or any Series, nor
shall any Trustee be responsible or liable for the act or omission of
any other Trustee. In addition, a Trustee is not obligated to supervise
those persons. Nothing contained herein shall protect any Trustee
against any liability to which such Trustee would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

Every note, bond, contract, instrument, certificate, Membership Interest
or undertaking and every other act or thing whatsoever executed or done
by or on behalf of the Company or the Trustees or any of them in
connection with the Company shall be conclusively deemed to have been
executed or done only in or with respect to their or his capacity as
Trustees or Trustee and neither such Trustees or Trustee nor the Member
shall be personally liable thereon.

All persons extending credit to, contracting with or having any claim
against the Company or any applicable series of the Company shall look
only to the assets of the Company or the applicable series of the
Company, as the case may be, for payment under such credit, contract or
claim; and neither the Member nor the Trustees, nor any of the Company's
officers, employees, authorized persons or agents, whether past, present
or future, shall be personally liable therefor.

Section 12.2. Board of Trustees' Good Faith Action, Expert Advice, No
Bond or Surety. To the extent that, at law or in equity, the Member or
a Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Company or to the Member or a Trustee:

Page 18

(i)The Member or any Trustee acting under the Agreement shall not be
liable to the Company, to the Member or to a Trustee, as the case may
be, for the Member's or Trustee's good faith reliance on the provisions
of the Agreement; and

(ii)The Member's or a Trustee's duties and liabilities may be expanded
or restricted by provisions in the Agreement.

Without limiting the generality of the foregoing, the exercise by the
Board of Trustees of its powers and discretions thereunder shall be
binding upon everyone interested. A Trustee shall be liable only for
his own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of
Trustee, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of
this Agreement and their duties as Trustees hereunder, and shall be
under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. In discharging their
duties, the Trustees, when acting in good faith, shall be entitled to
rely upon the books of account of the Company and upon written reports
made to the Trustees by any officer appointed by them, any independent
public accountant and (with respect to the subject matter of the
contract involved) any officer, partner or responsible employee of any
other party to any contract entered into hereunder. The Trustees shall
not be required to give any bond as such, nor any surety if a bond is
required.

Section 12.3. Liability of Third Persons Dealing with Board of Trustees.
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the
Board of Trustees or to see to the application of any payments made or
property transferred to the Company or upon its order.

Section 12.4. Indemnification. (a) Subject to the exceptions and
limitations contained in this Section 12.4, every person who is, or has
been, a Trustee, director, officer, employee, authorized person or agent
of the Company, including persons who serve at the request of the
Company as Trustees, officers, employees, authorized persons or agents,
of another organization in which the Company has an interest as a
shareholder, creditor or otherwise (hereinafter referred to as a
"Covered Person"), shall be indemnified by the Company to the fullest
extent permitted by law against liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action,
suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been such a Trustee, director, officer,
employee, authorized person or agent and against amounts paid or
incurred by him in settlement thereof.

(b)No indemnification shall be provided hereunder to a Covered Person:

Page 19

(ii)with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interests of the Company; or

(A) by a vote of a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter); or

(B) by written opinion of independent legal counsel.

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Company, shall be severable, shall not
affect any other rights to which any Covered Person may now or hereafter
be entitled, shall continue as to a person who has ceased to be such a
Covered Person and shall inure to the benefit of the heirs, executors
and administrators of such a person. Nothing contained herein shall
affect any rights to indemnification to which Company personnel other
than Covered Persons may be entitled by contract or otherwise under law.

(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding subject to a claim for indemnification under
this Section 12.4 shall be advanced by the Company prior to final
disposition thereof upon receipt of an undertaking by or on behalf of
the recipient to repay such amount if it is ultimately determined that
he is not entitled to indemnification under this Section 12.4, provided
that either:

(i)such undertaking is secured by a surety bond or some other
appropriate security or the Company shall be insured against losses
arising out of any such advances; or

(ii)a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees then in office
act on the matter) or independent legal counsel in a written opinion
shall determine, based upon a review of the readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to indemnification.

Page 20

against whom none of such actions, suits or other proceedings or another
action, suit or other proceeding on the same or similar grounds is then
or has been pending.

Section 12.5.Member. No personal liability for any debt or obligation
of the Company shall attach to the Member or any former Member of the
Company. In case the Member or former Member of the Company shall be
held to be personally liable solely by reason of his being or having
been the Member and not because of his acts or omissions or for some
other reason, the Member or former Member (or his heirs, executors,
administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor)
shall be entitled out of the assets of the Company to be held harmless
from and indemnified against all loss and expenses arising from such
liability; provided, however, there shall be no liability or obligation
of the Company arising hereunder to reimburse the Member for taxes paid
by reason of such Member's ownership of any Membership Interest or for
losses suffered by reason of any changes in value of any Company assets.
The Company shall, upon request by the Member or former Member, assume
the defense of any claim made against the Member for any act or
obligation of the Company and satisfy any judgment thereon.

ARTICLE XIII

MISCELLANEOUS

Section 13.1. Termination of Company. Unless terminated as provided
herein, the Company shall continue without limitation of time. The
Company or any series of the Company may be terminated in accordance
with Section 9.1 hereof.

Upon termination of the Company or any series thereof, after paying or
otherwise providing for all charges, taxes, expenses and liabilities,
whether due or accrued or anticipated, as may be determined by the Board
of Trustees, the Company shall, in accordance with such procedures as
the Board of Trustees consider appropriate, reduce the remaining assets
of the Company or of the particular series thereof to distributable form
in cash or other securities, or any combination thereof, and distribute
the proceeds to the Member of the Company or such series in the manner
set forth by resolution of the Board of Trustees.

Section 13.2. References, Headings. The original or a copy of this
instrument and of each amendment hereto shall be kept in the office of
the Company where it may be inspected by the Member. Anyone dealing
with the Company may rely on a certificate by an officer or Trustee of
the Company as to whether or not any such amendments have been made and
as to any matters in connection with the Company hereunder, and with the
same effect as if it were the original, may rely on a copy certified by
an officer or Trustee of the Company to be a copy of this instrument or

Page 21

of any such amendments. In this instrument or in any such amendment,
references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder," shall be deemed to refer to this instrument as
a whole and as amended or affected by any such amendment, and masculine
pronouns shall be deemed to include the feminine and the neuter, as the
context shall require. Headings are placed herein for convenience of
reference only, and in case of any conflict, the text of this
instrument, rather than the headings, shall control. This instrument
may be executed in any number of counterparts, each of which shall be
deemed an original.

Section 13.3. Board of Trustees May Resolve Ambiguities. The Board of
Trustees may construe any of the provisions of this Agreement and the
Bylaws insofar as the same may appear to be ambiguous or inconsistent
with any other provisions hereof or in the Bylaws, and any such
construction by the Board of Trustees in good faith shall be conclusive
as to the meaning to be given to such provisions.

Section 13.4. Amendments. Except as otherwise specifically provided in
this Agreement, this Agreement may be amended at any time by an
instrument in writing signed by a majority of the then Board of Trustees
with the consent of the Member holding more than fifty percent (50%) of
Membership Interests entitled to vote except that an amendment which in
the determination of the Board of Trustees shall affect one or more
series or classes of Membership Interests but not all outstanding series
or classes shall be authorized by vote of a majority of the Membership
Interests entitled to vote of each series and class affected and no vote
of the Membership Interests of a series or class not affected shall be
required. In addition, notwithstanding any other provision to the
contrary contained in this Agreement, the Board of Trustees may amend
this Agreement without the vote or consent of the Member (i) at any time
if the Board of Trustees deem it necessary in order for the Company or
any series or class thereby to meet the requirements of applicable
Federal or State laws or regulations, or the requirements of the
Internal Revenue Code, (ii) to designate series or classes or exercise
other powers with respect thereto in accordance with Section 4.1 and 4.2
of Article IV hereof, (iii) change the name of the Company or to supply
any omission, cure any ambiguity or cure, correct or supplement any
defective or inconsistent provision contained herein, or (iv) for any
reason at any time before a registration statement under the Securities
Act of 1933, as amended, covering the initial public offering of
Membership Interests has become effective and Membership Interests have
been issued.

Section 13.5. Filing of Certificate of Cancellation. Upon the
dissolution and completion of winding up of the Company, the Board of
Trustees shall promptly file or cause to be filed a Certificate of
Cancellation with the Secretary of State of the State of Delaware. If
there is no Board of Trustees, then the Certificate of Cancellation
shall be filed by the remaining Member; if there are no remaining
Member, the Certificate shall be filed by the last Person to be the
Member; if there is neither a Board of Trustees, remaining Member, or a
Person who last was the Member, the Certificate shall be filed by the
legal or personal representatives of the Person who last was the Member.

Section 13.6. Applicable Law. All questions concerning the construction,
validity, and interpretation of this Agreement and the performance of
the obligations imposed by this Agreement shall be governed by the

Page 22

internal law, not the law of conflicts, of the State of Delaware.

Section 13.7. Jurisdiction and Venue. Any suit involving any dispute or
matter arising under this Agreement may be brought in the federal or
state court located in the States of Illinois or Delaware having
jurisdiction over the subject matter of the dispute or matter. The
Member hereby consents to the exercise of personal jurisdiction by any
such court with respect to any such proceeding. The Member and the
other parties hereto hereby consent to (i) the non-exclusive
jurisdiction of the courts of the States of Illinois of Delaware and any
Federal court sitting in Chicago, Illinois or Wilmington, Delaware, and
(ii) service of process by first-class mail.

Page 23

IN WITNESS WHEREOF, the undersigned, being the Company, the Sole Member
of the Company and Sole Trustee, respectively, have executed this
Agreement as of the date first written above.

SOLE MEMBER:

By
Its Sole Trustee and Member
JAMES A. BOWEN
1001 Warrenville Road
Lisle, Illinois 60532

BOARD OF TRUSTEES BY THE SOLE TRUSTEE

By
Its Sole Trustee and Member
JAMES A. BOWEN
1001 Warrenville Road
Lisle, Illinois 60532

Page 24

EXHIBIT A

OPERATING BYLAWS
OF
FIRST DEFINED PORTFOLIO FUND, LLC

ARTICLE I

LIMITED LIABILITY COMPANY AGREEMENT
AND
OFFICES

Section 1.1. Agreement of Company. Pursuant to Section 6.1 of the
Limited Liability Company Agreement, as from time to time in effect (the
"Agreement"), of First Defined Portfolio Fund, LLC, the Delaware limited
liability company referenced in the Agreement (the "Company"), the Board
of Trustees of the Company is authorized to adopt these Bylaws provided
that such Bylaws are not inconsistent with the Agreement. Accordingly,
with regards to any provision of these Bylaws that is inconsistent with
the Agreement, the terms of the Agreement shall control.

Section 1.2. Other Offices. The Company may have such other offices and
places of business within or without the State of Delaware as the Board
of Trustees shall determine.

ARTICLE II

MEMBERS

Section 2.1. Place of Meetings. Meetings of the Member may be held at
such place or places within or without the State of Delaware as shall be
fixed by the Board of Trustees and stated in the notice of the meeting.

Section 2.2. Regular Meeting. No regular meetings of the Member for the
election of the Board of Trustees and the transaction of such other
business as may properly come before the meeting shall be held unless
the Board of Trustees by resolution shall designate such date and time
of such meeting or except as otherwise required by applicable law.

Section 2.3. Special Meeting. Special meetings of the Member for any
purpose or purposes may be called by the Chairman of the Board, the
President or two or more members of the Board of Trustees, and must be
called at the written request stating the purpose or purposes of the
meeting, of at least 10 percent of the Membership Interests entitled to
vote at the meeting.

Section 2.4. Notice of Meetings. Notice stating the time and place of
the meeting and in the case of a special meeting the purpose or purposes
thereof and by whom called, shall be delivered to the Member not less
than ten nor more than sixty days prior to the meeting, except where the
meeting is an adjourned meeting and the date, time and place of the
meeting were announced at the time of the adjournment.

Page 1

Section 2.5. Quorum and Action. (a) Thirty percent (30%) of the voting
power of the Membership Interests of the Company entitled to vote at a
meeting is a quorum for the transaction of business. If a quorum is
present when a duly called or held meeting is convened, the Membership
Interests present may continue to transact business until adjournment,
even though the withdrawal of a number of Membership Interests
originally present leaves less than the proportion or number otherwise
required for a quorum.

(b)The Company shall take action by the affirmative vote of a majority,
except in the case of the election of Trustees which shall only require
a plurality, of the voting power of the Membership Interests present and
entitled to vote at a meeting of the Member at which a quorum is
present, except as may be otherwise required by the Investment Company
Act of 1940, as amended (the "1940 Act"), or the Agreement.

Section 2.6. Voting. At each meeting of the Member, each Membership
Interests then entitled to vote may be voted by the Member in person or
by proxy and shall be entitled to one vote for each Membership Interest.
As provided in Section 2.8 of this Agreement, to the extent required by
applicable laws, regulations and Commission positions, the Member is
required to submit matters requiring a vote to the Variable Annuity
Owners and to vote each Membership Interest in accordance with the
instructions of the Variable Annuity Owner who has an indirect right in
the Membership Interest pursuant to a Policy issued by American Skandia.

Section 2.7. Proxy Representation. The Member may cast or authorize the
casting of a vote through the filing of a written appointment of a proxy
with an officer of the Company at or before the meeting at which the
appointment is to be effective. The appointment of a proxy is valid for
eleven months, unless a longer period is expressly provided in the
appointment. No appointment is irrevocable unless the appointment is
coupled with an interest in the Membership Interests.

Section 2.8. Adjourned Meetings. Any meeting of the Member may be
adjourned to a designated time and place by the vote of a majority of
the Membership Interests present and entitled to vote thereat even
though less than a quorum is so present without any further notice
except by announcement at the meeting. An adjourned meeting may
reconvene as designated, and when a quorum is present any business may
be transacted which might have been transacted at the meeting as
originally called.

ARTICLE III

BOARD OF TRUSTEES

Section 3.1. Qualifications and Number: Vacancies. Each Trustee shall
be a natural person. A Trustee need not be the Member, a citizen of the
United States, or a resident of the State of Delaware. The number of
Trustees of the Company, their term and election and the filling of
vacancies, shall be as provided in the Agreement.

Page 2

Section 3.2. Powers. The business and affairs of the Company shall be
managed under the direction of the Board of Trustees. All powers of the
Company may be exercised by or under the authority of the Board of
Trustees, except those conferred on or reserved to the Member by law,
the Agreement or these Bylaws.

Section 3.3. Investment Polices. It shall be the duty of the Board of
Trustees to ensure that the purchase, sale, retention and disposal of
portfolio securities and the other investment practices of the Company
are at all times consistent with the investment objectives, policies and
restrictions with respect to securities investments and otherwise of the
Company filed from time to time with the Securities and Exchange
Commission and as required by the 1940 Act, unless such duty is
delegated to an investment adviser pursuant to a written contract, as
provided in the Agreement. The Board of Trustees may delegate the duty
of management of the assets of the Company to an individual or corporate
investment adviser or subadviser to act as investment adviser or
subadviser pursuant to a written contract. However, the Board of
Trustees is responsible for the general supervision of the duties
performed for the Company by any such party.

Section 3.4. Meetings. Regular meetings of the Board of Trustees may be
held without notice at such times as the Board of Trustees shall fix.
Special meetings of the Board of Trustees may be called by the Chairman
of the Board or the President, and shall be called at the written
request of two or more Trustees. Unless waived by each Trustee, three
days' notice of special meetings shall be given to each Trustee in
person, by mail, by telephone, or by telegram or cable, or by any other
means that reasonably may be expected to provide similar notice. Notice
of special meetings need not state the purpose or purposes thereof.
Meetings of the Board of Trustees may be held at any place within or
outside the United States. A conference among Trustees by any means of
communication through which the Trustees may simultaneously hear each
other during the conference constitutes a meeting of the Board of
Trustees or of a committee of the Board of Trustees, if the notice
requirements have been met (or waived) and if the number of Trustees
participating in the conference would be sufficient to constitute a
quorum at such meeting. Participation in such meeting by that means
constitutes presence in person at the meeting.

Section 3.5. Quorum and Action. A majority of the members of the Board
of Trustees currently holding office, or in the case of a meeting of a
committee of the Board of Trustees, a majority of the members of such
committee, shall constitute a quorum for the transaction of business at
any meeting. If a quorum is present when a duly called or held meeting
is convened, the Trustees present may continue to transact business
until adjournment, even though the withdrawal of a number of Trustees
originally present leaves less than the proportion or number otherwise
required for a quorum. At any duly held meeting at which a quorum is
present, the affirmative vote of the majority of the Trustees present
shall be the act of the Board of Trustees or the committee, as the case
may be, on any question, except where the act of a greater number is
required by these Bylaws or by the Agreement. No individual Trustee
shall have the power to act for or on behalf of, or to bind, the Company
except as provided by the Agreement, Bylaws or by a resolution of the
Board of Trustees.

Page 3

Section 3.6. Action by Written Consent in Lieu of Meetings of Board of
Trustees. An action which is required or permitted to be taken at a
meeting of the Board of Trustees or a committee of the Board of Trustees
may be taken by written action signed by the number of Trustees that
would be required to take the same action at a meeting of the Board of
Trustees or committee, as the case may be, at which all Trustees were
present and voted. The written action is effective when signed by the
required number of Trustees, unless a different effective time is
provided in the written action. When written action is taken by less
than all Trustees, all Trustees shall be notified immediately of its
text and effective date.

Section 3.7. Committees. The Board of Trustees, by resolution adopted by
the affirmative vote of a majority of the Board of Trustees, may
designate from its members an Executive Committee, an Audit Committee
and any other committee or committees, each such committee to consist of
two or more Trustees and to have such powers and authority (to the
extent permitted by law) as may be provided in such resolution. Any
such committee may be terminated at any time by the affirmative vote of
a majority of the Trustees.

ARTICLE IV

OFFICERS

Section 4.1. Number and Qualifications. The officers of the Company
shall include a Chairman of the Board, a President, a Controller, one or
more Vice Presidents (one of whom may be designated an Executive Vice
President), a Treasurer, and a Secretary. Any two or more offices may
be held by the same person. Unless otherwise determined by the Board of
Trustees, each officer shall be appointed by the Board of Trustees for a
term which shall continue until the meeting of the Board of Trustees
following the next regular meeting of the Member and until his successor
shall have been duly elected and qualified, or until his death, or until
he shall have resigned or have been removed, as hereinafter provided in
these Bylaws. The Board of Trustees may from time to time elect, or
delegate to the Chairman of the Board or the President, or both, the
power to appoint, such officers (including one or more Assistant Vice
Presidents, one or more Assistant Treasurers and one or more Assistant
Secretaries) and such agents as may be necessary or desirable for the
business of the Company. Such other officers shall hold office for such
terms as may be prescribed by the Board of Trustees or by the appointing
authority.

Section 4.2. Resignations. Any officer of the Company may resign at any
time by giving written notice of his resignation to the Board of
Trustees, the Chairman of the Board, the President or the Secretary.
Any such resignation shall take effect at the time specified therein or,
if the time when it shall become effective shall not be specified
therein, immediately upon its receipt, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective.

Section 4.3. Removal. An officer may be removed at any time, with or
without cause, by a resolution approved by the affirmative vote of a
majority of the Board of Trustees present at a duly convened meeting of
the Board of Trustees.

Page 4

Section 4.4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause may be filled
for the unexpired portion of the term by the Board of Trustees, or in
the manner determined by the Board of Trustees.

Section 4.5. The Chairman of the Board. The Chairman of the Board shall
be elected from among the Board of Trustees. He shall be the chief
executive officer of the Company and shall:

(a)have general active management of the business of the Company;

(b)when present, preside at all meetings of the Board of Trustees and of
the Member;

(c)see that all orders and resolutions of the Board of Trustees are
carried into effect; and

(d)sign and deliver in the name of the Company any deeds, mortgages,
bonds, contracts or other instruments pertaining to the business of the
Company, except in cases in which the authority to sign and deliver is
required by law to be exercised by another person or is expressly
delegated by the Agreement or Bylaws or by the Board of Trustees to some
other officer or agent of the Company.

The Chairman of the Board shall be authorized to do or cause to be done
all things necessary or appropriate, including preparation, execution
and filing of any documents, to effectuate the registration from time to
time of the Membership Interests of the Company with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended.
He shall perform all duties incident to the office of Chairman of the
Board and such other duties as from time to time may be assigned to him
by the Board of Trustees or by these Bylaws.

Section 4.6. The President. The President shall be the chief operating
officer of the Company and, subject to the Chairman of the Board, he
shall have general authority over and general management and control of
the business and affairs of the Company. In general, he shall discharge
all duties incident to the office of the chief operating officer of the
Company and such other duties as may be prescribed by the Board of
Trustees and the Chairman of the Board from time to time. The President
shall also have the power to appoint and terminate authorized persons
and agents of the Company. In the absence of the Chairman of the Board
or in the event of his disability or inability to act or to continue to
act, the President shall perform the duties of the Chairman of the Board
and when so acting shall have all the powers of, and be subject to all
the restrictions upon, the Chairman of the Board.

Section 4.7. Executive Vice-President. In the case of the absence or
inability to act of the President and the Chairman of the Board, any
Executive Vice-President shall perform the duties of the President and
when so acting shall have all the powers of, and be subject to all the
restrictions upon, the President. Any Executive Vice-President shall
perform all duties incident to the office of Executive Vice-President
and such other duties as from time to time may be assigned to him by the
Board of Trustees, the President or these Bylaws.

Page 5

Section 4.8. Vice Presidents. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board of
Trustees, the Chairman of the Board or the President.

Section 4.9. Controller. The Controller shall:

(a)keep accurate financial records for the Company;

(b)render to the Chairman of the Board, the President and the Board of
Trustees, whenever requested, an account of all transactions by and of
the financial condition of the Company; and

(c)in general, perform all the duties incident to the office of
Controller and such other duties as from time to time may be assigned to
him by the Board of Trustees, the Chairman of the Board or the President.

Unless the Board of Trustees determines otherwise, the Treasurer of the
Company shall also serve as Controller.

Section 4.10. Treasurer. The Treasurer shall:

(a)have charge and custody of, and be responsible for, all the funds and
securities of the Company, except those which the Company has placed in
the custody of a bank or trust company pursuant to a written agreement
designating such bank or trust company as custodian of the property of
the Company, as required by Article X of the Agreement;

(b)deposit all money, drafts, and checks in the name of and to the
credit of the Company in the banks and depositories designated by the
Board of Trustees;

(c)endorse for deposit all notes, checks, and drafts received by the
Company making proper vouchers therefor;

(d)disburse corporate funds and issue checks and drafts in the name of
the Company, as ordered by the Board of Trustees; and

(e)in general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to
him by the Board of Trustees, the Chairman of the Board or the President.

Section 4.11. Secretary. The Secretary shall:

(a)keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Trustees, the
committees of the Board of Trustees and the Member;

Page 6

(b)see that all notices are duly given in accordance with the provisions
of these Bylaws and as required by statute;

(c)maintain records and serve as custodian of the records of the Company;

(d)see that the books, reports, statements, certificates and other
documents and records required by statute to be kept and filed are
properly kept and filed;

(e)Whenever necessary, certify all proceedings of the Board of Trustees
and the Member; and

(f)in general, perform all the duties incident to the office of
Secretary and such other duties as from time to time may be assigned to
him by the Board of Trustees, the Chairman of the Board or the President.

Section 4.12. Salaries. The salaries of all officers shall be fixed by
the Board of Trustees.

ARTICLE V

MEMBERSHIP INTERESTS

Section 5.1. Membership Interest Certificates. No Membership Interest
certificates shall be issued.

Section 5.2. Books and Records; Inspection. The Company shall keep at
its principal executive office, or at another place or places within the
United States determined by the Board of Trustees, a Membership Interest
register not more than one year old, containing the name and address of
the Member and the number of Membership Interests held by the Member.
The Company shall also keep, at its principal executive office, or at
another place or places within the United States determined by the Board
of Trustees, a record of the dates on which certificates representing
Membership Interests were issued.

Section 5.3. Membership Interest Transfers. Upon compliance with any
provisions restricting the transferability of the Membership Interest
that may be set forth in the Agreement, these Bylaws, or any resolution
or written agreement in respect thereof, transfers of Membership
Interests of the Company shall be made only on the books of the Company
by the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with an officer
of the Company, or with a transfer agent or a registrar and on surrender
of any certificate or certificates for such Membership Interests
properly endorsed and the payment of all taxes thereon. Except as may
be otherwise provided by law or these Bylaws, the person in whose name
Membership Interests stand on the books of the Company shall be deemed
the owner thereof for all purposes as regards the Company.

Section 5.4. Regulations. The Board of Trustees may make such additional
rules and regulations, not inconsistent with these Bylaws, as they may
deem expedient concerning the issue, certification, transfer and

Page 7

registration of Membership Interests of the Company. They may appoint,
or authorize any officer or officers to appoint, one or more transfer
agents or one or more transfer clerks and one or more registrars.

Section 5.5. Record Date: Certification of Membership Interests. (a) The
Board of Trustees may fix a date not more than ninety (90) days before
the date of a meeting of the Member as the date for the determination of
the Membership Interests entitled to notice of and entitled to vote at
the meeting or any adjournment thereof.

(b)The Board of Trustees may fix a date for determining the Member
entitled to receive payment of any dividend or distribution or allotment
of any rights or entitled to exercise any rights in respect of any
change, conversion or exchange of Membership Interests.

(c)In the absence of such fixed record date, (i) the date for
determination of the Member entitled to notice of and entitled to vote
at a meeting of the Member shall be the later of the close of business
on the day on which notice of the meeting is mailed or the thirtieth day
before the meeting, and (ii) the date for determining the Member
entitled to receive payment of any dividend or distribution or an
allotment of any rights or entitled to exercise any rights in respect of
any change, conversion or exchange of Membership Interests shall be the
close of business on the day on which the resolution of the Board of
Trustees is adopted.

ARTICLE VI

MISCELLANEOUS

Section 6.1. Fiscal Year. The fiscal year of the Company shall be as
fixed by the Board of Trustees of the Company.

Section 6.2. Notice and Waiver of Notice. (a) Any notice of a meeting
required to be given under these Bylaws to the Member or the Board of
Trustees, or both, may be waived by any such person (i) orally or in
writing signed by such person before, at or after the meeting or (ii) by
attendance at the meeting in person or, in the case of the Member, by
proxy.

(b)Except as otherwise specifically provided herein, all notices
required by these Bylaws shall be printed or written, and shall be
delivered either personally, by telecopy, telegraph or cable, or by mail
or courier or delivery service, and, if mailed, shall be deemed to be
delivered when deposited in the United States mail, postage prepaid,
addressed to the Member or Trustee at his address as it appears on the
records of the Company.

Page 8

ARTICLE VII

AMENDMENTS

Section 7.1. These Bylaws may be amended or repealed, or new Bylaws may
be adopted, by the Board of Trustees at any meeting thereof or by action
of the Board of Trustees by written consent in lieu of a meeting.

Dated as of January 8, 1999

Page 9

EXHIBIT B

THE DOW(SM) TARGET 5 PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

THE DOW(SM) DART 10 PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

GLOBAL TARGET 15 PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

Page 1

S&P TARGET 10 PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

NASDAQ TARGET 15 PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

FIRST TRUST 10 UNCOMMON VALUES PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

FIRST TRUST ENERGY PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

Page 2

FIRST TRUST FINANCIAL SERVICES PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

FIRST TRUST PHARMACEUTICAL PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

FIRST TRUST TECHNOLOGY PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

FIRST TRUST INTERNET PORTFOLIO

PERCENTAGE OF
CAPITAL MEMBERSHIP
MEMBER ADDRESS CONTRIBUTION INTERESTS

James A. Bowen 1001 Warrenville Road $0 100%
Lisle, Illinois 60532

Page 3

OPERATING BYLAWS
OF
FIRST DEFINED PORTFOLIO FUND, LLC

ARTICLE I

LIMITED LIABILITY COMPANY AGREEMENT
AND
OFFICES

Section 1.2. Other Offices. The Company may have such other offices and
places of business within or without the State of Delaware as the Board
of Trustees shall determine.

ARTICLE II

MEMBERS

Page 1

ARTICLE III

BOARD OF TRUSTEES

Page 2

Page 3

ARTICLE IV

OFFICERS

Page 4

Section 4.5. The Chairman of the Board. The Chairman of the Board shall
be elected from among the Board of Trustees. He shall be the chief
executive officer of the Company and shall:

(a)have general active management of the business of the Company;

(b)when present, preside at all meetings of the Board of Trustees and of
the Member;

(c)see that all orders and resolutions of the Board of Trustees are
carried into effect; and

Page 5

Section 4.8. Vice Presidents. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board of
Trustees, the Chairman of the Board or the President.

Section 4.9. Controller. The Controller shall:

(a)keep accurate financial records for the Company;

(b)render to the Chairman of the Board, the President and the Board of
Trustees, whenever requested, an account of all transactions by and of
the financial condition of the Company; and

Unless the Board of Trustees determines otherwise, the Treasurer of the
Company shall also serve as Controller.

Section 4.10. Treasurer. The Treasurer shall:

(b)deposit all money, drafts, and checks in the name of and to the
credit of the Company in the banks and depositories designated by the
Board of Trustees;

(c)endorse for deposit all notes, checks, and drafts received by the
Company making proper vouchers therefor;

(d)disburse corporate funds and issue checks and drafts in the name of
the Company, as ordered by the Board of Trustees; and

Section 4.11. Secretary. The Secretary shall:

(a)keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Trustees, the
committees of the Board of Trustees and the Member;

Page 6

(b)see that all notices are duly given in accordance with the provisions
of these Bylaws and as required by statute;

(c)maintain records and serve as custodian of the records of the Company;

(d)see that the books, reports, statements, certificates and other
documents and records required by statute to be kept and filed are
properly kept and filed;

(e)Whenever necessary, certify all proceedings of the Board of Trustees
and the Member; and

Section 4.12. Salaries. The salaries of all officers shall be fixed by
the Board of Trustees.

ARTICLE V

MEMBERSHIP INTERESTS

Section 5.1. Membership Interest Certificates. No Membership Interest
certificates shall be issued.

Page 7

ARTICLE VI

MISCELLANEOUS

Section 6.1. Fiscal Year. The fiscal year of the Company shall be as
fixed by the Board of Trustees of the Company.

Page 8

ARTICLE VII

AMENDMENTS

Dated as of January 8, 1999

Page 9

FIRST DEFINED PORTFOLIO FUND, LLC

ESTABLISHMENT AND DESIGNATION OF SERIES OF
MEMBERSHIP INTERESTS

Pursuant to Section 4.2 of the Limited Liability Company Agreement dated
as of January 8, 1999 (the "Agreement"), of First Defined Portfolio
Fund, LLC, a Delaware limited liability company (the "Company"), the
Sole Trustee and Member of the Company, this 18th day of June, 1999,
hereby establishes and designates twelve series of Membership Interests
(as defined in the Agreement) (the "Funds") to have the special and
relative rights described below.

1.The following Funds are established and designated:

The Dow(SM) Target 5 Portfolio
The Dow(SM) Target 10 Portfolio
Global Target 15 Portfolio
S&P Target 10 Portfolio
NASDAQ Target 15 Portfolio
Target Small Cap Portfolio
10 Uncommon Values Portfolio
First Trust Energy Sector Portfolio
First Trust Financial Services Sector Portfolio
First Trust Pharmaceutical/Healthcare Sector Portfolio
First Trust Technology Sector Portfolio
First Trust Internet Sector Portfolio

2.Each Fund shall be authorized to hold cash, invest in securities,
instruments and other property and use investment techniques as from
time to time described in the Company's then currently effective
registration statement under the Securities Act of 1933 to the extent
pertaining to the offering of Membership Interests of such Funds. Each
Membership Interest of the Funds shall be redeemable, shall be entitled
to one vote (or fraction thereof in respect of a fractional share) on
matters on which Members of that Fund may vote in accordance with the
Agreement, shall represent a pro rata beneficial interest in the assets
allocated or belonging to such Fund, and shall be entitled to receive
its pro rata share of the net assets of such Fund upon liquidation of
such Fund, all as provided in Article IV, Sections 4.2 and 4.5 of the
Agreement. The proceeds of the sale of Membership Interests of each
Fund, together with any income and gain thereon, less any diminution or
expenses thereof, shall irrevocably belong to such Fund, unless
otherwise required by law.

3.Members of each Fund shall vote separately as a class on any matter to
the extent required by, and any matter shall be deemed to have been
effectively acted upon with respect to that Fund as provided in, Rule
18f-2, as from time to time in effect, under the Investment Company Act
of 1940, as amended, or any successor rules, and by the Agreement.

Page 1

4.The assets and liabilities of the Company shall be allocated among
each Fund and any other series of Membership Interests that may be
established from time to time as set forth in Article IV, Section 4.5 of
the Agreement.

5.The designation of the Funds hereby shall not impair the power of the
Board of Trustees from time to time to designate additional series of
Membership Interests of the Company.

6.Subject to the applicable provisions of the 1940 Act and the
provisions of Article IV, Sections 4.2 and 4.5 of the Agreement, the
Board of Trustees shall have the right at any time and from time to time
to reallocate assets and expenses or to change the designation of each
Fund now or hereafter created, or to otherwise change the special
relative rights of a Fund designated hereby without any action or
consent of the Members.

Page 2

IN WITNESS WHEREOF, the undersigned, being the Sole Trustee and Member
of the Company, has executed this instrument as of this 18th day of
June, 1999.

James A. Bowen
Sole Trustee and Member

Page 3

FIRST DEFINED PORTFOLIO FUND, LLC

AMENDED AND RESTATED

ESTABLISHMENT AND DESIGNATION OF SERIES OF
MEMBERSHIP INTERESTS

WHEREAS, pursuant to Section 4.2 of the Limited Liability Company
Agreement dated as of January 8, 1999 (the "Agreement"), of First
Defined Portfolio Fund, LLC, a Delaware limited liability company (the
"Company"), the Sole Trustee of the Company, on the 18th day of June,
1999, established and designated twelve series of Membership Interests
(as defined in the Agreement) each a "Fund" to have the special and
relative rights described in such Establishment and Designation of Series;

WHEREAS, the Trustees of the Company now desire to amend and restate
such Establishment and Designation of Series in order to eliminate two
series that were established and designated and with respect to which no
Membership Interests are issued and outstanding. The Funds eliminated
are The DowSM Target 10 Portfolio and the Target Small Cap Portfolio;

WHEREAS, the Trustees of the Company further desire to amend and restate
such Establishment and Designation of Series in order to establish and
designate an additional series to be named The DowSM DART 10 Portfolio
and to modify the names of certain Funds; and

NOW THEREFORE, the Trustees of the Company, this 20th day of September
1999, hereby amend and restate the Establishment and Designation of
Series as follows:

1.The Dow(SM) Target 10 Portfolio and the Target Small Cap Portfolio, of
which no Membership Interests have been issued, are no longer
established and designated as series of the Company;

2.The Dow(SM) DART 10 Portfolio is established and designated as a series
of the Company; and

3.The Company consists of the following eleven series of Membership
Interests that have been established and designated by the Board of
Trustees:

Page 1

The Dow(SM) Target 5 Portfolio
The Dow(SM) DART 10 Portfolio
Global Target 15 Portfolio
S&P Target 10 Portfolio
NASDAQ Target 15 Portfolio
First Trust 10 Uncommon Values Portfolio
First Trust Energy Portfolio
First Trust Financial Services Portfolio
First Trust Pharmaceutical Portfolio
First Trust Technology Portfolio
First Trust Internet Portfolio

2.Each Fund shall be authorized to hold cash, invest in securities,
instruments and other property and use investment techniques as from
time to time approved by the Trustees and thereafter described in the
Company's then currently effective registration statement under the
Securities Act of 1933 to the extent pertaining to the offering of
Membership Interests of such Funds. Each Membership Interest of each
Fund shall be redeemable, shall be entitled to one vote (or fraction
thereof in respect of a fractional share) on matters on which the
Member, in its capacity as the holder of the Membership Interests of
that Fund, may vote in accordance with the Agreement, shall represent a
pro rata beneficial interest in the assets allocated or belonging to
such Fund, and shall be entitled to receive its pro rata share of the
net assets of such Fund upon liquidation of such Fund, all as provided
in the Agreement, including, without limitation, Article IV, Sections
4.2 and 4.5 thereof. The proceeds of the sale of Membership Interests
of each Fund, together with any income and gain thereon, less any
diminution or expenses thereof, shall irrevocably belong to such Fund,
unless otherwise required by law.

3.The Member, in its capacity as the holder of the Membership Interests
of each Fund, shall vote Membership Interests of each Fund separately as
a class on any matter to the extent required by, and any matter shall be
deemed to have been effectively acted upon with respect to such Fund as
provided in, Rule 18f-2, as from time to time in effect, under the
Investment Company Act of 1940, as amended (the "1940 Act"), or any
successor rules, and by the Agreement.

5.The designation of each Fund hereby shall not impair the power of the
Board of Trustees from time to time to designate additional series of
Membership Interests of the Company, including those that may be senior
to existing series.

Page 2

6.Subject to the applicable provisions of the 1940 Act and the
provisions of Article IV, Sections 4.2 and 4.5 of the Agreement, the
Board of Trustees shall have the right at any time and from time to time
to reallocate assets and expenses or to change the designation of each
Fund now or hereafter created, or to otherwise change the special
relative rights of each Fund designated hereby without any action or
consent of the Member.

Page 3

IN WITNESS WHEREOF, the undersigned, being the Trustees of the Company,
has executed this instrument as of this 20th day of September, 1999.

Robert J. Bartel James A. Bowen
Trustee Trustee

Richard E. Erickson Patrick M. Fitzgerald
Trustee Trustee

Leroy King Niel B. Nielson
Trustee Trustee

Page 4

FIRST DEFINED PORTFOLIO FUND, LLC

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT

This Investment Advisory and Management Agreement (the "Agreement") made
this day of , 1999, by and between First
Defined Portfolio Fund, LLC, a Delaware limited liability company (the
"Company"), on behalf of each series (each a "fund" and collectively,
the "funds") of the Company, and First Trust Advisors L.P. (the
"Adviser"), an Illinois limited partnership.

WHEREAS, the Company and the Adviser wish to enter into this Agreement
setting forth the terms and conditions under which the Adviser will
perform certain investment advisory and management services for the
funds listed in Schedule A attached hereto, and be compensated for such
services by the funds.

NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the Company and the Adviser hereby agree as
follows:

Section 1. INVESTMENT ADVISORY SERVICES.

1.1 During the Term (as such term is defined in Section 5 hereof) of this
Agreement, the Adviser shall serve as the investment adviser (within the
meaning of the Investment Advisers Act of 1940, as amended) of the
funds. In such capacity, the Adviser shall render the following
services and perform the following functions for and on behalf of the
funds:

(a)Furnish continuous advice and recommendations to the funds with
respect to the acquisition, holding or disposition of any or all of the
securities or other assets which the funds may own or contemplate
acquiring from time to time;

(b)Cause its officers to attend meetings and furnish oral or written
reports, as the Company reasonably may request, in order to keep the
Trustees and appropriate officers of the Company fully informed
regarding the investment portfolios of the funds, the investment
recommendations of the Adviser, and the considerations which form the
basis for such recommendations; and

(c)Supervise the management of the fund's investments, including the
purchase, sale, retention or lending of securities and other investments
in accordance with the direction of the appropriate officers of the
Company.

1.2 The services of the Adviser to the funds are not exclusive, and
nothing contained herein shall be deemed or construed to prohibit,
limit, or otherwise restrict the Adviser from rendering investment or
other advisory services to any third person, whether similar to those to
be provided to the funds hereunder or otherwise.

Section 2. COMPENSATION OF ADVISER.

2.1 For its services hereunder, each fund shall pay the Adviser an annual
fee (the "Fee") as set forth in Schedule B. The Fee will be computed
daily and payable monthly in arrears.

Page 1

2.2 Notwithstanding the provisions of Section 2.1 hereof, the amount of
the Fee to be paid with respect to the first and last months of this
Agreement shall be pro rated based on the number of calendar days in
such quarter.

2.3 The Adviser may voluntarily waive Fees or reimburse expenses at any
time. Any amounts waived or reimbursed by the Adviser are subject to
reimbursement by the fund within the following three years, to the
extent such reimbursement by the fund would not cause the fund to exceed
any current expense limitation.

Section 3. EXPENSES PAID BY THE ADVISER.

3.1 Subject to the provisions of Section 3.2 hereof, the Adviser shall
pay the following expenses relating to the management and operation of
the funds:

(a)All reasonable fees, charges, costs and expenses and all reasonable
compensation of all officers and Trustees of the funds relating to the
performance of their duties to the funds; provided, however, that the
Adviser shall not pay any such amounts to any Outside Trustees (for
purposes of this Agreement, an "Outside Trustee" is any Trustee of the
Company who is not an "Interested Person," within the meaning of Section
2(a)(19) of the Investment Company Act of 1940, as amended (the "1940
Act")); and provided, further, that in the event that any person serving
as an officer of the Company has both executive duties attendant to such
office and administrative duties to the Company apart from such office,
the Adviser shall not pay any amounts relating to the performance of
such duties;

(b)All costs of office equipment and personnel necessary for and
allocable to the performance of the obligations of the Adviser hereunder.

3.2 Except as provided in this Section, nothing contained in this
Agreement shall be deemed or construed to impose upon the Adviser any
obligation to incur, pay, or reimburse the funds for any other costs of
or relating to the funds.

Section 4. EXPENSES PAID BY THE FUNDS.

4.1 Except as provided in Section 3 hereof, the funds hereby assume and
shall pay all fees, costs and expenses incurred by, or on behalf, or for
the benefit of the funds, including without limitation:

(a)All costs of any custodian or depository;

(b)All costs for bookkeeping, accounting, pricing and auditors' services;

(c)All costs of leased office space of or allocable to the funds within
the offices of the Adviser or in such other place as may be mutually
agreed upon between the parties from time to time;

(d)All costs of any transfer agent and registrar of interests of the
funds ("Interests");

(e)All costs incurred by any Outside Trustee of the Company in
connection with the performance of his duties relating to the affairs of
the Company in such capacity as an Outside Trustee of the Company, and
costs relating to the performance by any officer of the Company,
performing duties on behalf of the funds apart from such office, all in
accordance with Section 3.1 (a) hereof;

Page 2

(f)All brokers' commissions and other costs incurred in connection with
the execution of the funds' portfolio transactions;

(g)All taxes and other costs payable by or on behalf of the funds to
federal, state or other governmental agencies;

(h)All costs of printing, recording and transferring certificates
representing Interests;

(i)All costs in connection with the registration of the funds and the
Interests with the Securities and Exchange Commission ("SEC"), and the
continuous maintenance of the effectiveness of such registrations, and
the registration and qualification of Interests of the funds under state
or other securities laws, including, without limitation, the preparation
and printing of registration statements, prospectuses and statements of
additional information for filing with the SEC and other authorities;

(j)All costs of preparing, printing and mailing prospectuses, statements
of additional information and reports to holders of Interests;

(k)All costs of Interest holders' and Trustees' meetings and of
preparing, printing and mailing all information and documents, including
without limitation all notices, financial reports and proxy materials,
to holders of Interests;

(l)All costs of legal counsel for the Company and for Trustees of the
Company in connection with the rendering of legal advice to or on behalf
of the funds, including, without limitation, legal services rendered in
connection with the funds' existence, corporate and financial structure
and relations with its Interest holders, registrations and
qualifications of securities under federal, state and other laws, issues
of securities, expenses which the funds have herein assumed whether
customary or not, and extraordinary matters, including, without
limitation, any litigation involving the Company, Trustees, or officers
of the Company relating to the affairs of the funds, employees or agents
of the funds;

(m)All costs of licenses to utilize trademarks, trade names, service
marks or other proprietary interests;

(n)All costs associated with membership in trade associations; and

(o)All costs of filing annual and other reports with the SEC and other
regulatory authorities.

In the event that the Adviser provides any of the foregoing services or
pays any of these expenses, the funds promptly shall reimburse the
Adviser therefor.

Section 5. TERM; TERMINATION.

5.1 This Agreement shall continue in effect, unless sooner terminated in
accordance with the provisions of Section 5.2, for a period of two years
beginning the date hereof, and shall continue in effect from year to
year thereafter (collectively, the "Term"); provided, however, that any
such continuation shall be expressly approved at least annually either
by the Trustees, including a majority of the Trustees who are not
parties hereto or Interested Persons of any such party, cast at a
meeting called for the purpose of voting on such renewal, or the
affirmative vote of a majority of the Outstanding Voting Securities (as
such term is defined in Section 2(a)(42) of the 1940 Act) of the funds.

Page 3

(a)Any continuation of this Agreement pursuant to Section 5.1 hereof
shall be deemed to be specifically approved if such approval occurs:

(i)with respect to the first continuation hereof, during the 60 days
prior to and including the earlier of (A) the date specified herein for
the termination of this Agreement in the absence of such approval, or
(B) the second anniversary of the execution of this Agreement; and

(ii)with respect to any subsequent continuation hereof, during the 60
days prior to and including the first anniversary of the date upon which
the most recent previous annual continuance of this Agreement became
effective; or

(iii)at such other date or time provided in or permitted by Rule 15a-2
under the 1940 Act.

5.2This Agreement may be terminated at any time, without penalty, as
follows:

(a)By a majority of the Trustees of the Company who are not parties
hereto or Interested Persons of any such party, or by the affirmative
vote of a majority of the Outstanding Voting Securities of the Company,
upon at least 60 days' prior written notice to the Adviser at its
principal place of business; and

(b)By the Adviser, upon at least 60 days' prior written notice to the
Company at its principal place of business.

Section 6. RETENTION OF CONTROL BY FUNDS.

The Company acknowledges that the investment advice and recommendations
to be provided by the Adviser hereunder are advisory in nature only.
The Company further acknowledges that, at all times during the Term
hereof, the funds (and not the Adviser) shall retain full control over
the investment policies of the funds. Nothing contained herein shall be
deemed or construed to limit, prohibit or restrict the right or ability
of the Trustees of the Company to delegate to the appropriate officers
of the Company, or to a committee of Trustees of the Company, the power
to authorize purchases, sales or other actions affecting the portfolios
of the funds between meetings of the Trustees of the Company; provided,
however, that all such purchases, sales or other actions so taken during
such time shall be consistent with the investment policies of the funds
and shall be reported to the Board of Trustees of the Company at its
next regularly scheduled meeting.

Section 7. BROKERS AND BROKERAGE COMMISSIONS.

7.1 For purposes of this Agreement, brokerage commissions paid by the
funds upon the purchase or sale of the funds' portfolio securities shall
be considered a cost of securities of the funds and shall be paid by the
funds in accordance with Section 4.1(e) hereof.

Page 4

7.2 The Adviser shall place funds portfolio transactions with brokers
and dealers who render satisfactory service in the execution of orders
at the most favorable prices and at reasonable commission rates;
provided, however, that the Adviser may pay a broker or dealer an amount
of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for
effecting such transaction, if the Adviser determines in good faith that
such amount of commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, in
terms of either that particular transaction or the overall
responsibilities of the Adviser.

7.3 In placing portfolio business with broker-dealers for or on behalf of
the funds, the Adviser shall seek the best execution of each such
transaction, and all such brokerage placements shall be consistent with
the Rules of Conduct of NASD Regulation, Inc. Notwithstanding the
foregoing, the funds shall retain the right to direct the placement of
all portfolio transactions for or on behalf of the funds, and, in
furtherance thereof, the funds may establish policies or guidelines to
be followed by the Adviser in its placement of the funds' portfolio
transactions pursuant to the foregoing provisions. The Adviser shall
report to the Trustees of the Company at least on a quarterly basis
regarding the placement of the funds' portfolio transactions.

7.4 The Adviser shall not deal with any affiliate in any transaction
hereunder in which such affiliate acts as a principal, nor shall the
Adviser, in rendering services to the funds hereunder, execute any
negotiated trade with any affiliate if execution thereof involves such
affiliate's acting as a principal with respect to any part of an order
for or on behalf of the funds.

Section 8. ASSIGNMENT.

This Agreement may not be assigned by either party hereto. This
Agreement shall terminate automatically in the event of any assignment
(as such term is defined in Section 2(a)(4) of the 1940 Act). Any
attempted assignment of this Agreement shall be of no force and effect.

Section 9. AMENDMENTS.

This Agreement may be amended in writing signed by both parties hereto;
provided, however, that no such amendment shall be effective unless
approved by a majority of the Trustees of the Company who are not
parties hereto or Interested Persons of any such party cast at a meeting
called for the purpose of voting on such amendment and by the
affirmative vote of a majority of the Outstanding Voting Securities of
the funds.

Section 10. LIABILITY.

The Adviser, its partners, directors, officers, employees, and certain
other persons performing specific functions for a fund will only be
liable to the fund for losses resulting from willful misfeasance, bad
faith, gross negligence, or reckless disregard of their obligations and
duties under the Agreement.

Section 11. SECTION 817(H) DIVERSIFICATION.

The Adviser is responsible for compliance with the provisions of Section
817(h) of the Internal Revenue Code of 1986, as amended ("Code"),
applicable to each fund (relating to the diversification requirements
applicable to investments in underlying variable annuity contracts).

Page 5

Section 12. GOVERNING LAW.

This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Illinois, without reference to
the conflict of laws provisions thereof. In the event of any
inconsistency between this Agreement and the 1940 Act, the 1940 Act
shall govern, and the inconsistent provisions of this Agreement shall be
construed so as to eliminate such inconsistency.

Section 13. NON-LIABILITY OF CERTAIN PERSONS.

Any obligation of the Company hereunder shall be binding only upon the
assets of the Company (or the applicable fund thereof) and shall not be
binding upon any Trustee, officer, employee, agent, member or interest-
holder of the Company. Neither the authorization of any action by any
Trustee, officer, employee, agent, member or interest-holder of the
Company nor the execution of this agreement on behalf of the Fund shall
impose any liability upon any Trustee, officer, employee, agent, member
or interest-holder of the Company.

Section 14. USE OF ADVISER'S NAME.

The Company may use the name "First Defined Portfolio Fund, LLC" and the
Portfolio names listed in Schedule A or any other name derived from the
name "First Trust" or "Nike Securities" only for so long as this
Agreement or any extension, renewal or amendment hereof remains in
effect, including any similar agreement with any organization which
shall have succeeded to the business of Adviser as investment adviser.
At such time as this Agreement or any extension, renewal or amendment
hereof, or such other similar agreement shall no longer be in effect,
the Company will cease to use any name derived from the name "First
Trust" or "Nike Securities" or otherwise connected with Adviser, or with
any organization which shall have succeeded to Adviser's business as
investment adviser.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

First Defined Portfolio Fund, LLC

By:___________________________
Name:___________________________
Title:___________________________

First Trust Advisors L.P.

By:___________________________
Name:___________________________
Title:___________________________

Page 6

SCHEDULE A

1. The Dow(SM) Target 5 Portfolio
2. The Dow(SM) DART 10 Portfolio
3. Global Target 15 Portfolio
4. S&P Target 10 Portfolio
5. NASDAQ Target 15 Portfolio
6. First Trust 10 Uncommon Values Portfolio
7. First Trust Energy Portfolio
8. First Trust Financial Services Portfolio
9. First Trust Pharmaceutical Portfolio
10. First Trust Technology Portfolio
11. First Trust Internet Portfolio

Page 7

SCHEDULE B

Fee Rate
1. The Dow(SM) Target 5 Portfolio 0.60%
2. The Dow(SM) DART 10 Portfolio 0.60%
3. Global Target 15 Portfolio 0.60%
4. S&P Target 10 Portfolio 0.60%
5. NASDAQ Target 15 Portfolio 0.60%
6. First Trust 10 Uncommon Values Portfolio 0.60%
7. First Trust Energy Portfolio 0.60%
8. First Trust Financial Services Portfolio 0.60%
9. First Trust Pharmaceutical Portfolio 0.60%
10. First Trust Technology Portfolio 0.60%
11. First Trust Internet Portfolio 0.60%

Page 8

FIRST DEFINED PORTFOLIO FUND, LLC

DISTRIBUTION AGREEMENT

This Distribution Agreement (the "Agreement") is made as of this ____
day of ________, 1999, by and between First Defined Portfolio Fund, LLC
(the "Company"), a Delaware limited liability company, on behalf of each
series (each a "fund" and, collectively, the "funds") of the Company
listed in Appendix A attached hereto, as may be amended from time to
time and Nike Securities L.P., an Illinois limited partnership (the
"Distributor").

Section 1. GENERAL DUTIES AS DISTRIBUTOR OF FUND INTERESTS.

Distributor shall act as principal distributor for each fund. Each fund
may be authorized to issue multiple series. Distributor has the
exclusive right to purchase, as agent, from each fund, interests of each
series authorized and issued by a fund. Distributor agrees, as agent
for each fund, to accept for redemption, the interests of each series
authorized and issued by the fund; whenever the officers of the Company
deem it advisable for the protection of interest holders, they may
suspend or cancel such authority with respect to one or more of the
funds. In the performance of these duties, Distributor shall be guided
by the requirements of this Agreement, the applicable provisions of the
Company's Limited Liability Company Agreement and applicable federal and
state law, all as amended and/or supplemented from time to time, and
each fund's Prospectus and Statement of Additional Information, then in
effect under the Company's current Registration Statement filed with the
U.S. Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment
Company Act of 1940, as amended (the "1940 Act").

Section 2. SALES LITERATURE AND ADVERTISEMENTS.

All sales literature and advertisements used by Distributor in
connection with the sale of the Company's interests must be approved in
advance by a Company officer. In connection with the sale or arranging
for the sale of the Company's interests, Distributor is authorized to
give only such information and to make only such statements or
representations as are contained in each fund's Prospectus then
currently in effect under the Company's Registration Statement, or in
sales literature or advertisements approved by the Company.

Section 3. LIMITATION UPON INVESTMENT IN THE COMPANY.

Distributor shall not accept any initial or subsequent investment in
interests of a fund, except as described in the fund's then-current
Prospectus and Statement of Additional Information.

Section 4. OFFERING PRICE & NET ASSET VALUE PER INTEREST.

Interests of each fund sold under this Agreement shall be sold only at
the offering price in effect at the time of such sale, as described in
the fund's then-current Prospectus and Statement of Additional
Information, and the fund shall receive not less than the full net asset
value therefor.

Page 1

Any reference to "net asset value per interest" shall refer to each
fund's net asset value per interest computed in accordance with the
Company's Limited Liability Company Agreement, the fund's then-current
Prospectus and Statement of Additional Information and the instructions
of the Trustees, all as amended from time to time. The Company or its
agent will advise Distributor as promptly as practicable of each fund's
net asset value per interest on each day on which it is determined.

Section 5.DUTIES UPON SALE OR REDEMPTION OF INTERESTS.

Distributor shall remit or cause to be remitted to the Company's
custodian or transfer agent, as applicable, the net asset value per
interest of all interests of each fund sold by Distributor. Each fund
will, as promptly as practicable, cause the account of the purchaser to
be credited with the number of interests purchased. The Company will
not issue interest certificates.

Distributor shall process or cause to be processed requests received
from each fund's interest holders for redemption of its interests, in
the manner prescribed in the fund's then-current Prospectus and
Statement of Additional Information. Interests shall be redeemed at
their net asset value per interest next computed after receipt of the
redemption request, subject to any applicable redemption fee as set
forth in the fund's then-current Prospectus. Distributor shall arrange
for payment to such interest holders from each fund's account with the
custodian or transfer agent, as applicable.

Section 6.INFORMATION RELATING TO THE COMPANY.

The Company or its agent will furnish Distributor with a certified copy
of all financial statements and a signed copy of each report prepared by
its independent public accountants, and will cooperate fully with
Distributor in its efforts to sell the funds' interests, and in the
performance by Distributor of all of its duties under this Agreement.

Section 7.FILING OF REGISTRATION STATEMENTS.

The Company or its agent will from time to time file (and furnish
Distributor with copies of) such registration statements, amendments and
supplements thereto, and reports or other documents as may be required
under the 1933 Act, the 1940 Act, or the laws of the states in which
Distributor desires to sell interests of the funds.

Section 8.MULTIPLE CAPACITIES.

Distributor shall give the Company equitable treatment under the
circumstances in supplying services in any capacity, but the Company
recognizes that it is not entitled to receive preferential treatment
from Distributor as compared with the treatment given to any other
investment company or customer. Whenever Distributor shall act in
multiple capacities on behalf of the Company, Distributor shall maintain
the appropriate separate account and records for each such capacity.

Page 2

Section 9.PAYMENT OF FEES AND EXPENSES.

Distributor shall, at its own expense, finances certain activities
incident to the sale and distribution of the interests of the funds,
including printing and distribution of prospectuses and statements of
additional information to other than existing interest holders and the
printing and distributing of sales literature and advertising.

Distributor shall be entitled to receive for its services as distributor
the fees payable in accordance with any plans adopted by the funds (or
class of interests of the respective funds) pursuant to Rule 12b-1 under
the 1940 Act, and may remit such fees to, among others, American Skandia
Life Assurance Corporation in accordance with the terms of any such plan.

Section 10.LIABILITY OF THE DISTRIBUTOR.

Distributor shall be liable for its own acts and omissions caused by
Distributor's willful misfeasance, bad faith, or gross negligence in the
performance of Distributor's duties, or by Distributor's reckless
disregard of its obligations under this Agreement, and nothing herein
shall protect Distributor against any such liability to the Company or
its interest holders. Subject to the first sentence of this Section,
Distributor shall not be liable for any action taken or omitted on
advice, obtained in good faith, of counsel, provided such counsel is
satisfactory to the Company.

Section 11.TERMINATION OF AGREEMENT; ASSIGNMENT.

This Agreement may be terminated at any time, without the payment of any
penalty, on 60 days' written notice (i) by Distributor; (ii) by the
Company, acting pursuant to a resolution adopted by the non-interested
Trustees; or (iii) by the vote of the holders of the lesser of (1) 67%
of the Company's interests present at a meeting if the holders of more
than 50% of the outstanding interests are present in person or
represented by proxy, or (2) more than 50% of the outstanding interests
of the Company. This Agreement shall automatically terminate in the
event of its assignment. Termination shall not affect the rights of the
parties which have accrued prior thereto.

Section 12.DURATION.

Unless sooner terminated, this Agreement shall continue in effect for
one year from the date herein above first written, and from year to year
thereafter until terminated, provided that the continuation of this
Agreement and the terms hereof are specifically approved annually in
accordance with the requirements of the 1940 Act as modified or
superseded by any rule, regulation, order or interpretive position of
the Commission.

Section 13.NON-LIABILITY OF CERTAIN PERSONS.

Page 3

Section 14.DEFINITIONS.

The terms "assignment" and "interested person" when used in this
Agreement shall have the meanings given such terms in the 1940 Act.

Section 15.CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.

This Agreement shall be subject to all applicable provisions of law,
including, without being limited to, the applicable provisions of the
1940 Act, the 1933 Act, and the Securities Exchange Act of 1934, as
amended; and to the extent that any provisions of this Agreement are in
conflict with such laws, the latter shall control.

The laws of the State of Illinois shall govern the construction,
validity and effect of this Agreement.

Section 16.MISCELLANEOUS.

The obligations of the Company and each fund are not personally binding
upon, nor shall resort be had to the private property of, any of the
Trustees, interest holders, officers, employees or agents of the Company
or any fund, but only the relevant fund's property shall be bound. No
fund shall be liable for the obligations of any other fund.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first
above written.

FIRST DEFINED PORTFOLIO FUND, LLC

By:_______________________________
Name:_______________________________
Title:_______________________________

NIKE SECURITIES L.P.

By:_______________________________
Name:_______________________________
Title:_______________________________

Page 4

APPENDIX A

Page 5

DOMESTIC CUSTODY AGREEMENT

BETWEEN

_______________________________

AND

THE CHASE MANHATTAN BANK

___________________, 19___

Page 1

DOMESTIC CUSTODY AGREEMENT

TABLE OF CONTENTS

1. INTENTION OF THE PARTIES; DEFINITIONS 3
1.1 Intention of the Parties 3
1.2 Definitions 3

2. WHAT BANK IS REQUIRED TO DO 5
2.1 Set Up Accounts 5
2.2 Cash Account 5
2.3 Segregation of Assets; Nominee Name 6
2.4 Settlement of Trades 6
2.5 Contractual Settlement Date Accounting 6
2.6 Actual Settlement Date Accounting 7
2.7 Income Collection; Autocredit 7
2.8 Fractions/ Redemptions by Lot 8
2.9 Presentation of Coupons; Certain Other Ministerial Acts 8
2.10 Corporate Actions 8
2.11 Proxy Voting 8
2.12 Statements and Information Available On-Line 9
2.13 Access to Bank's Records 10

3. INSTRUCTIONS10
3.1 Acting on Instructions; Unclear Instructions 10
3.2 Confirmation of Oral Instructions/ Security Devices 10
3.3 Instructions; Contrary to Law/Market Practice 11
3.4 Cut-off Times 12

4. FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK 12
4.1 Fees and Expenses 12
4.2 Overdrafts 12
4.3 Bank's Right Over Securities; Set-off 12

5. SECURITIES DEPOSITORIES AND AGENTS 13
5.1 Use of Depositories 13
5.2 Use of Agents 13

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6. ADDITIONAL PROVISIONS RELATING TO CUSTOMER 13
6.1 Representations of Customer 13
6.2 Customer to Provide Certain Information to Bank 14
6.3 Customer is Liable to Bank Even if it is Acting for Another Person 14

7. WHEN BANK IS LIABLE TO CUSTOMER 14
7.1 Standard of Care; Liability 14
7.2 Force Majeure 15
7.3 Bank May Consult With Counsel 15
7.4 Bank Provides Diverse Financial Services and May
Generate Profits as a Result 15

8. TAXATION 16
8.1 Tax Obligations 16
8.2 Tax Reclaims 16

9. TERMINATION 18

10. MISCELLANEOUS 18
10.1 Notices 18
10.2 Successors and Assigns 18
10.3 Interpretation 18
10.4 Entire Agreement 18
10.5 Confidentiality 19
10.6 Insurance 19
10.7 Governing Law and Jurisdiction 19
10.8 Severability and Waiver 19
10.9 Counterparts 20

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DOMESTIC CUSTODY AGREEMENT

This Agreement, dated , is between THE CHASE
MANHATTAN BANK ("Bank"), with a place of business at
; and

("Customer") a company registered under the
Investment Company Act of 1940, as amended, with a place of business at

1.INTENTION OF THE PARTIES; DEFINITIONS

1.1 Intention of the Parties.

(a)This Agreement sets out the terms governing custodial, settlement and
certain other associated services offered by Bank to Customer. Bank
will be responsible for the performance of only those duties that are
set forth in this Agreement or expressly contained in Instructions that
are consistent with the provisions of this Agreement and with Bank's
operations and procedures. Customer acknowledges that Bank is not
providing any legal, tax or investment advice in providing the services
hereunder.

(b)It is the intention of the parties that the services offered by Bank
under this Agreement with respect to the custody of Securities and
related settlement services will be limited to Securities that are
issued in the United States ("U.S.") by an issuer that is organized
under the laws of the U.S. or any state thereof, or that are both traded
in the U.S. and that are eligible for deposit at a U.S. Securities
Depository.

1.2Definitions.

(a)As used herein, the following terms have the meaning hereinafter
stated.

"Account" has the meaning set forth in Section 2.1 of this Agreement.

"Affiliate" means an entity controlling, controlled by, or under common
control with, Bank.

"Applicable Law" means any statute, whether national, state or local,
applicable in the United States or any other country, the rules of the
treaty establishing the European Community, any other law, rule,
regulation or interpretation of any governmental entity, any applicable
common law, and any decree, injunction, judgment, order, ruling, or writ
of any governmental entity.

"Authorized Person" means any person (including an investment manager or
other agent) who has been designated by written notice from Customer or
its designated agent to act on behalf of Customer hereunder. Such
persons will continue to be Authorized Persons until such time as Bank

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receives Instructions from Customer or its designated agent that any
such person is no longer an Authorized Person.

"Bank Indemnitees" means Bank, and its nominees, directors, officers,
employees and agents.

"Cash Account" has the meaning set forth in Section 2.1(a)(ii).

"Corporate Action" means any subscription right, bonus issue, stock
repurchase plan, redemption, exchange, tender offer, or similar matter
with respect to a Financial Asset in the Securities Account that require
discretionary action by the holder, but does not include proxy voting.

"Entitlement Holder" means the person named on the records of a
Securities Intermediary as the person having a Securities Entitlement
against the Securities Intermediary.

"Financial Asset" means, as the context requires, either the asset
itself or the means by which a person's claim to it is evidenced,
including a Security, a security certifi-cate, or a Securities
Entitlement. "Financial Asset" does not include cash.

"Instructions" has the meaning set forth in Section 3.1 of this Agreement.

"Liabilities" means any liabilities, losses, claims, costs, damages,
penalties, fines, obligations, or expenses of any kind whatsoever
(including, without limitation, reasonable attorneys', accountants',
consultants' or experts' fees and disbursements).

"Securities" means stocks, bonds, rights, warrants and other negotiable
and non-negotiable instruments, whether issued in certificated or
uncertificated form, that are commonly traded or dealt in on securities
exchanges or financial markets. "Securities" also means other
obligations of an issuer, or shares, participations and interests in an
issuer recognized in the country in which it is issued or dealt in as a
medium for investment and any other property as may be acceptable to
Bank for the Securities Account.

"Securities Account" means each Securities custody account on Bank's
records to which Financial Assets are or may be credited pursuant hereto.

"Securities Depository" has the meaning set forth in Section 5.1 of this
Agreement.

"Securities Entitlement" means the rights and property interest of an
Entitlement Holder with respect to a Financial Asset as set forth in
Part 5 of Article 8 of the Uniform Commercial Code of the State of New
York, as the same may be amended from time to time.

"Securities Intermediary" means Bank, a Securities Depository, and any
other financial institution which in the ordinary course of business
maintains custody accounts for others and acts in that capacity.

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(b)All terms in the singular will have the same meaning in the plural
unless the context otherwise provides and visa versa.

2.WHAT BANK IS REQUIRED TO DO

2.1Set Up Accounts.

(a)Bank will establish and maintain the following accounts ("Accounts"):

(i)a Securities Account in the name of Customer for Financial Assets,
which may be received by Bank for the account of Customer, including as
an Entitlement Holder; and

(ii)an account in the name of Customer ("Cash Account") for any and all
cash received by Bank for the account of Customer.

(b)At the request of Customer, additional Accounts may be opened in the
future, which will be subject to the terms of this Agreement, including
a segregated Account or Accounts:

(i) in accordance with the provisions of an agreement among Customer and
a broker-dealer (registered under the Securities and Exchange Act of
1934 ("Exchange Act") and a member of the National Association of
Securities Dealer, Inc. ("NASD"), or any futures commission merchant
registered under the Commodity Exchange Act, relating to compliance with
the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading
Commission or any registered contract market), or of any similar
organization, regarding escrow or other arrangements in connection with
transactions by us;

(ii) for the purpose of segregating cash or Financial Assets with
options purchased or sold by Customer; and

(iii) for any other corporate purposes as per the Instruction of an
Authorized Person.

2.2Cash Account.

Except as otherwise provided in Instructions acceptable to Bank, all
cash held in a Cash Account established or maintained by Bank will be
held during the period it is credited to the Accounts in one or more
deposit accounts at Bank in which cash shall not be subject to
withdrawal by check or draft. Funds credited to the Cash Account will
be transferred by Bank by means of Instruction ("payment order") to a
Bank administrator assigned to Customer. Payment orders and

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Instructions seeking to cancel payment orders or to amend payment orders
which are issued by telephone, telecopier or in writing shall be subject
to a mutually agreed security procedure and Bank may execute or pay
payment orders issued in Customer's name when verified by and Authorized
Person in accordance with such procedure.

2.3Segregation of Assets; Nominee Name.

(a)Bank will identify in its records that Financial Assets credited to
Customer's Securities Account belong to Customer (except as otherwise
may be agreed by Bank and Customer).

(b)Bank is authorized, in its discretion, to hold in bearer form, such
Financial Assets as are customarily held in bearer form and to register
in the name of the Customer, Bank, a Securities Depository, or their
respective nominees, such Financial Assets as are customarily held in
registered form. Customer authorizes Bank to hold Financial Assets in
omnibus accounts and will accept delivery of Financial Assets of the
same class and denomination as those deposited with Bank.

2.4Settlement of Trades.

When Bank receives an Instruction directing settlement of a trade in
Financial Assets that includes all information required by Bank, Bank
will use reasonable care to effect such settlement as instructed.
Settlement of purchases and sales of Financial Assets will be conducted
in accordance with prevailing standards of the market in which the
transaction occurs. The risk of loss will be Customer's whenever Bank
delivers Financial Assets or payment in accordance with applicable
market practice in advance of receipt or settlement of the expected
consideration. In the case of the failure of Customer's counterparty to
deliver the expected consideration as agreed, Bank will contact the
counterparty to seek settlement, but Bank will not be obligated to
institute legal proceedings, file proof of claim in any insolvency
proceeding, or take any similar action.

2.5Contractual Settlement Date Accounting.

(a)Should Customer request to have Bank's Contractual Settlement Date
Accounting Service, Bank will effect book entries on a "contractual
settlement date accounting" basis as described below with respect to the
settlement of trades in those markets where Bank generally offers
contractual settlement day accounting and will notify Customer of these
markets from time to time.

(i)Sales: On the settlement date for a sale, Bank will credit the Cash
Account with the sale proceeds of the sale and transfer the relevant
Financial Assets to an account pending settlement of the trade if not
already delivered.

(ii)Purchases: On the settlement date for the purchase (or earlier, if
market practice requires delivery of the purchase price before the
settlement date), Bank will debit the Cash Account with the settlement
monies and credit a separate account. Bank then will post the Securities
Account as awaiting receipt of the expected Financial Assets. Customer
will not be entitled to the delivery of Financial Assets that are

Page 6

awaiting receipt until Bank or its Securities Intermediary actually
receives them.

Bank reserves the right to restrict in good faith the availability of
contractual day settlement accounting for credit reasons.

(b)Bank may (in its absolute discretion) upon oral or written
notification to Customer reverse any debit or credit made pursuant to
Section 2.5(a) prior to a transaction's actual settlement, and Customer
will be responsible for any costs or liabilities resulting from such
reversal. Customer acknowledges that the procedures described in this
sub-section are of an administrative nature, and Bank does not undertake
to make loans and/or Financial Assets available to Customer.

2.6Actual Settlement Date Accounting.

With respect to any sale or purchase transaction that is not posted to
the Account on the contractual settlement date as referred to in Section
2.5, Bank will post the transaction on the date on which the cash or
Financial Assets received as consideration for the transaction is
actually received by Bank.

2.7Income Collection; Autocredit.

(a)Bank will credit the Cash Account with income and redemption proceeds
on Financial Assets in accordance with the times notified by Bank from
time to time on or after the anticipated payment date, net of any taxes
that are withheld by Bank or any third party. Where no time is
specified for a particular market, income and redemption proceeds from
Financial Assets will be credited only after actual receipt and
reconciliation. Bank may reverse such credits upon oral or written
notification to Customer that Bank believes that the corresponding
payment will not be received by Bank within a reasonable period or such
credit was incorrect.

(b)Bank will make reasonable endeavors in its discretion to contact
appropriate parties to collect unpaid interest, dividends or redemption
proceeds, but Bank will not be obliged to file any formal notice of
default, institute legal proceedings, file proof of claim in any
insolvency proceeding, or take any similar action.

2.8Fractions/ Redemptions by Lot.

Bank may sell fractional interests in Financial Assets and credit the
Cash Account with the proceeds of the sale. If some, but not all, of an
outstanding class of Financial Asset is called for redemption, Bank may
allot the amount redeemed among the respective beneficial holders of
such class of Financial Asset in any manner Bank deems to be fair and
equitable.

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2.9Presentation of Coupons; Certain Other Ministerial Acts.

Until Bank receives Instructions to the contrary, Bank will:

(i)present all Financial Assets for which Bank has received notice of a
call for redemption or that have otherwise matured, and all income and
interest coupons and other income items that call for payment upon
presentation;

(ii)execute in the name of Customer such certificates as may be required
to obtain payment in respect of Financial Assets; and

(iii)exchange interim or temporary documents of title held in the
Securities Account for definitive documents of title.

2.10Corporate Actions.

(a)Bank will follow Corporate Actions and advise the Customer of those
Corporate Actions of which Bank's central corporate actions department
receives notice from the issuer or from the Securities Depository in
which such Financial Assets are maintained or notice published in
publications and reported in reporting services routinely used by Bank
for this purpose.

(b)If an Authorized Person fails to provide Bank with timely
Instructions with respect to any Corporate Action, neither Bank nor its
nominees will take any action in relation to that Corporate Action,
except as otherwise agreed in writing by Bank and Customer or as may be
set forth by Bank as a default action in the advice it provides under
Section 2.10 (a) with respect to that Corporate Action.

2.11Proxy Voting.

(a)Subject to and upon the terms of this sub-section, Bank will provide
Customer with information which it receives on matters to be voted upon
at meetings of holders of Financial Assets ("Notifications"), and Bank
will act in accordance with Customer's Instructions in relation to such
Notifications. If information is received by Bank at its proxy voting
department too late to permit timely voting by Customer, Bank's only
obligation is to provide, so far as reasonably practicable, a
Notification (or summary information concerning a Notification) on an
"information only" basis.

(b)Bank will act upon Instructions to vote on matters referred to in a
Notification, provided Instructions are received by Bank at its proxy
voting department by the deadline referred to in the relevant
Notification. If Instructions are not received in a timely manner, Bank
will not be obligated to provide further notice to Customer.

(c)Customer acknowledges that the provision of proxy voting services
may be precluded or restricted under a variety of circumstances. These
circumstances include, but are not limited to: (i) the Financial Assets
being on loan or out for registration ; (ii) the pendency of conversion

Page 8

or another corporate action; or (iii) Financial Assets being held at
Customer's request in a name not subject to the control of Bank, in a
margin or collateral account at Bank or another bank or broker, or
otherwise in a manner which affects voting, local market regulations or
practices, or restrictions by the issuer.

(d)Notwithstanding the fact that Bank may act in a fiduciary capacity
with respect to Customer under other agreements or otherwise hereunder,
in performing voting proxy services Bank will be acting solely as the
agent of Customer, and will not exercise any discretion with regard to
such proxy services or vote any proxy except when directed by an
Authorized Person.

2.12Statements and Information Available On-Line.

(a)Bank will issue statements to Customer at times mutually agreed
identifying the Financial Assets and cash in the Accounts. Bank also
will provide additional statements containing this information upon
Customer's request. Additionally, Bank will send (or make available on-
line to) Customer an advice or notification of any transfers of cash or
Financial Assets with respect to the Accounts. Bank will be not be
liable with respect to any matter set forth in those portions of any
such statement (or reasonably implied therefrom) to which Customer has
not given Bank a written exception or objection within sixty (60) days
of receipt of the statement.

(b)Prices and other information obtained from third parties which may be
contained in any statement sent to Customer have been obtained from
sources Bank believes to be reliable. Bank does not, however, make any
representation as to the accuracy of such information or that the prices
specified necessarily reflect the proceeds that would be received on a
disposal of the relevant Financial Assets. References in this Agreement
to statements include any statements in electronic form.

(c)Customer acknowledges that records and unaudited reports available to
it on-line will be unaudited and may not be accurate due to inaccurate
pricing, delays in updating Account records, and other causes. Bank
will not be liable for any loss or damage arising out of the inaccuracy
of any such records or unaudited reports accessed on-line.

2.13Access to Bank's Records.

Bank will allow Customer's independent public accountants such
reasonable access to the records of Bank relating to Financial Assets as
is required in connection with their examination of books and records
pertaining to Customer's affairs.

3.INSTRUCTIONS

3.1Acting on Instructions; Unclear Instructions.

(a)Bank is authorized to act under this Agreement (or to refrain from
taking action) in accordance with the instructions received by Bank, via
telephone, telex, facsimile transmission, or other teleprocess or

Page 9

electronic instruction or trade information system acceptable to Bank
("Instructions"). Bank will have no responsibility for the authenticity
or propriety of any Instructions that Bank believes in good faith to
have been given by Authorized Persons or which are transmitted with
proper testing or authentication pursuant to terms and conditions that
Bank may specify. Customer authorizes Bank to accept and act upon any
Instructions received by it without inquiry. Customer will indemnify
Bank Indemnitees against, and hold each of them harmless from, any
Liabilities that may be imposed on, incurred by, or asserted against
Bank Indemnitees as a result of any action or omission taken in
accordance with any Instructions or other directions upon which Bank is
authorized to rely under the terms of this Agreement.

(b)Unless otherwise expressly provided, all Instructions will continue
in full force and effect until canceled or superseded.

(c)Bank may (in its sole discretion and without affecting any part of
this Section 3.1) seek clarification or confirmation of an Instruction
from an Authorized Person and may decline to act upon an Instruction if
it does not receive clarification or confirmation satisfactory to it.
Bank will not be liable for any loss arising from any delay while it
seeks such clarification or confirmation.

(d)In executing or paying a payment order Bank may rely upon the
identifying number (e.g. Fedwire routing number or account) of any party
as instructed in the payment order. Customer assumes full
responsibility for any inconsistency between the name and identifying
number of any party in payment orders issued to Bank in Customer's name.

3.2Confirmation of Oral Instructions/ Security Devices.

Any Instructions delivered to Bank by telephone will promptly thereafter
be confirmed in writing by an Authorized Person. Each confirmation is
to be clearly marked "Confirmation." Bank will not be liable for having
followed such Instructions notwithstanding the failure of an Authorized
Person to send such confirmation in writing or the failure of such
confirmation to conform to the telephone received. Either party may
record any of their telephonic communications. Customer will comply
with any security procedures reasonably required by Bank from time to
time with respect to verification of Instructions. Customer will be
responsible for safeguarding any test keys, identification codes or
other security devices that Bank will make available to Customer or any
Authorized Person.

3.3Instructions; Contrary to Law/Market Practice.

Bank need not act upon Instructions which it reasonably believes to be
contrary to law, regulation or market practice but will be under no duty
to investigate whether any Instructions comply with Applicable Law or
market practice.

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3.4 Cut-off Times.

Bank has established cut-off times for receipt of some categories of
Instruction, which will be made available to Customer. If Bank receives
an Instruction after its established cut-off time, it will attempt to
act upon the Instruction on the day requested if Bank deems it
practicable to do so or otherwise as soon as practicable after that day.

4.FEES, EXPENSES AND OTHER AMOUNTS OWING TO BANK

4.1Fees and Expenses.

Customer will pay Bank for its services hereunder the fees set forth in
Schedule A hereto or such other amounts as may be agreed upon in writing
from time to time, together with Bank's reasonable out-of-pocket or
incidental expenses, including, but not limited to, legal fees. Customer
authorizes Bank to charge any Cash Accounts, for any such fees or
expenses.

4.2Overdrafts.

Customer will have sufficient immediately available funds each day in
the Cash Account (without regard to any Cash Account investments) to pay
for the settlement of all Financial Assets delivered against payment to
Customer and credited to the Securities Account. If a debit to the Cash
Account results (or will result) in a debit balance, then Bank may, in
its discretion, (i) advance an amount equal to the overdraft, (ii) or
reject the settlement in whole or in any part, or (iii) if posted to the
Securities Account, reverse the posting of the Financial Assets credited
to the Securities Account. If Bank elects to make such an advance, the
advance will be deemed a loan to Customer, payable on demand, bearing
interest at the rate charged by Bank from time to time, for overdrafts
incurred by customers similar to Customer, from the date of such advance
to the date of payment (both after as well as before judgment) and
otherwise on the terms on which Bank makes similar overdrafts available
from time to time. No prior action or course of dealing on Bank's part
with respect to the settlement of transactions on Customer's behalf will
be asserted by Customer against Bank for Bank's refusal to make advances
to the Cash Account or to settle any transaction for which Customer does
not have sufficient available funds in the Account.

4.3Bank's Right Over Securities; Set-off.

(a)Customer grants Bank a security interest in and a lien on the
Financial Assets held in the Securities Account as security for any and
all amounts which are now or become owing to Bank under any provision of
this Agreement, whether or not matured or contingent ("Indebtedness").

(b)Bank will be further entitled to set any such Indebtedness off
against any cash or deposit account with Bank or any of its Affiliates
of which Customer is the beneficial owner. Bank will notify Customer in
advance of any such charge unless Bank reasonably believes that it might
prejudice its interests to do so and, in such event, Bank will notify
Customer promptly afterwards.

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5.SECURITIES DEPOSITORIES AND OTHER AGENTS

5.1Use of Depositories.

Bank may deposit Financial Assets with, and hold Financial Assets in,
any securities depository, settlement system, dematerialized book entry
system or similar system (together a "Securities Depository") on such
terms as such systems customarily operate and Customer will provide Bank
with such documentation or acknowledgements that Bank may require to
hold the Financial Assets in such systems. Bank will have no
responsibility for any act or omission by (or the insolvency of) any
Securities Depository. In the event Customer incurs a loss due to the
negligence, willful misconduct, or insolvency of a Securities
Depository, Bank will make reasonable endeavors, in its discretion, to
seek recovery from the Securities Depository.

5.2Use of Agents.

(a)Bank may provide certain services under this Agreement through third
parties. These third parties may be Affiliates. Bank will not be
responsible for any loss as a result of a failure by any broker or any
other third party that it selects and retains using reasonable care to
provide ancillary services, such as pricing, that it does not
customarily provide itself. Nevertheless, Bank will be liable for the
performance of any such service provider selected by Bank that is an
Affiliate to the same extent as Bank would have been liable if it
performed such services itself.

(b)Bank will execute transactions involving Financial Assets through a
broker which is an Affiliate (i) in the case of the sale under Section
2.8 of a fractional interest or (ii) if an Authorized Person directs
Bank to use the affiliated broker or otherwise requests that Bank select
a broker for that transaction. The affiliated broker may charge its
customary commission (or retain its customary spread) with respect to
either such transaction.

6.ADDITIONAL PROVISIONS RELATING TO CUSTOMER

6.1Representations of Customer.

Customer represents and warrants that (i) it has full authority and
power, and has obtained all necessary authorizations and consents, to
deposit and control the Financial Assets and cash in the Accounts, to
use Bank as its custodian in accordance with the terms of this
Agreement, to incur indebtedness and to pledge Financial Assets as
contemplated by Section 4.3; and (ii) this Agreement is Customer's
legal, valid and binding obligation, enforceable in accordance with its
terms and it has full power and authority to enter into and has taken
all necessary corporate action to authorize the execution of this
Agreement. Bank may rely upon the above or the certification of such
other facts as may be required to administer Bank's obligations
hereunder Bank may rely upon the above or the certification of such
other facts as may be required to administer Bank's obligations hereunder.

Page 12

6.2Customer to Provide Certain Information to Bank.

Upon request, Customer will promptly provide to Bank such information
about itself and its financial status as Bank may reasonably request,
including Customer's organizational documents and its current audited
and unaudited financial statements.

6.3Customer is Liable to Bank Even if it is Acting for Another Person.

If Customer is acting as an agent for a disclosed or undisclosed
principal in respect of any transaction, cash, or Financial Asset, Bank
nevertheless will treat Customer as its principal for all purposes under
this Agreement. In this regard, Customer will be liable to Bank as a
principal in respect of any transactions relating to the Account. The
foregoing will not affect any rights Bank might have against Customer's
principal.

7.WHEN BANK IS LIABLE TO CUSTOMER

7.1Standard of Care; Liability.

(a)Bank will use reasonable care in performing its obligations under
this Agreement. Bank will not be in violation of this Agreement with
respect to any matter as to which it has satisfied its obligation of
reasonable care.

(b)Bank will be liable for Customer's direct damages to the extent they
result from Bank's negligence or willful misconduct in performing its
duties as set out in this Agreement. Nevertheless, under no
circumstances will Bank be liable for any indirect, consequential or
special damages (including, without limitation, lost profits) of any
form, whether or not foreseeable and regardless of the type of action in
which such a claim may be brought, with respect to the Accounts or
Bank's performance hereunder or its role as custodian.

(c)Customer will indemnify Bank Indemnitees against, and hold them
harmless from, any Liabilities that may be imposed on, incurred by or
asserted against any of Bank Indemnitees in connection with or arising
out of Bank's performance under this Agreement, provided Bank
Indemnitees have not acted with negligence or engaged in fraud or
willful misconduct in connection with the Liabilities in question.

(d) Without limiting Subsections 7.1 (a), (b) or (c), Bank will have no
duty or responsibility to: (i) question Instructions or make any
suggestions to Customer or an Authorized Person regarding such
Instructions; (ii) supervise or make recommendations with respect to
investments or the retention of Financial Assets; (iii) advise Cus-tomer
or an Authorized Person regarding any default in the payment of
principal or income of any security other than as provided in Section
2.7(b) of this Agreement; (iv) evaluate or report to Customer or an
Authorized Person regarding the financial condition of any broker, agent
or other party to which Bank is instructed to deliver Financial Assets
or cash; or (v) review or reconcile trade confirmations received from

Page 13

brokers (and Customer or its Authorized Persons issuing Instructions
will bear any responsibility to review such confirmations against
Instructions issued to and statements issued by Bank).

7.2Force Majeure.

Bank will maintain and update from time to time business continuation
and disaster recovery procedures with respect to its custody business
that it determines from time to time meet reasonable commercial
standards. Bank will have no liability, however, for any damage, loss,
expense or liability of any nature that Customer may suffer or incur,
caused by an act of God, fire, flood, civil or labor disturbance, war,
act of any governmental authority or other act or threat of any
authority (de jure or de facto), legal constraint, fraud or forgery,
malfunction of equipment or software (except to the extent such
malfunction is primarily attributable to Bank's negligence in
maintaining the equipment or software), failure of or the effect of
rules or operations of any external funds transfer system, inability to
obtain or interruption of external communications facilities, or any
cause beyond the reasonable control of Bank (including without
limitation, the non-availability of appropriate foreign exchange).

7.3Bank May Consult With Counsel.

Bank will be entitled to rely on, and may act upon the advice of
professional advisers in relation to matters of law, regulation or
market practice (which may be the professional advisers of Customer),
and will not be liable to Customer for any action reasonably taken or
omitted pursuant to such advice.

7.4Bank Provides Diverse Financial Services and May Generate Profits as
a Result.

Customer acknowledges that Bank or its Affiliates may have a material
interest in the transaction or that circumstances are such that Bank may
have a potential conflict of duty or interest. For example, Bank or its
Affiliates may act as a market maker in the Financial Assets to which
Instructions relate, provide brokerage services to other customers, act
as financial adviser to the issuer of such Financial Assets, act in the
same transaction as agent for more than one customer, have a material
interest in the issue of the Financial Assets; or earn profits from any
of these activities. Customer acknowledges that Bank or its Affiliates
may be in possession of information tending to show that the
Instructions received may not be in the best interests of Customer. Bank
is not under any duty to disclose any such information.

8.TAXATION

8.1Tax Obligations.

(a)Customer confirms that Bank is authorized to deduct from any cash
received or credited to the Cash Account any taxes or levies required by
any revenue or governmental authority for whatever reason in respect of
Customer's Accounts.

Page 14

(b)Customer will provide to Bank such certifications, documentation, and
information as it may require in connection with taxation, and warrants
that, when given, this information is true and correct in every respect,
not misleading in any way, and contains all material information.
Customer undertakes to notify Bank immediately if any information
requires updating or correcting.

(c)Customer will be responsible for the payment of all taxes relating to
the Financial Assets in the Securities Account, and Customer will pay,
indemnify and hold Bank harmless from and against any and all
liabilities, penalties, interest or addi-tions to tax with respect to or
resulting from, any delay in, or failure by, Bank (1) to pay, withhold
or report any U.S. federal, state or local taxes or foreign taxes
imposed on, or (2) to report interest, dividend or other income paid or
cre-dited to the Cash Account, whether such failure or delay by Bank to
pay, withhold or report tax or income is the result of (x) Customer's
failure to comply with the terms of this paragraph, or (y) Bank's own
acts or omissions; provided however, Customer will not be liable to Bank
for any penalty or additions to tax due as a result of Bank's failure to
pay or withhold tax or to report interest, dividend or other income paid
or credited to the Cash Account solely as a result of Bank's negligent
acts or omissions.

8.2Tax Reclaims.

(a)Subject to the provisions of this Section, Bank will apply for a
reduction of withholding tax and any refund of any tax paid or tax
credits in respect of income payments on Financial Assets comprising
American Depository Receipts credited to the Securities Account that
Bank believes may be available.

(b)The provision of a tax reclamation service by Bank is conditional
upon Bank receiving from Customer (i) a declaration of its identity and
place of residence and (ii) certain other documentation (pro forma
copies of which are available from Bank). If Financial Assets
comprising American Depository Receipts credited to the Account are
beneficially owned by someone other than Customer, this information will
be necessary with respect to the beneficial owner. Customer
acknowledges that Bank will be unable to perform tax reclamation
services unless it receives this information.

(c)Bank will perform tax reclamation services only with respect to
taxation levied by the revenue authorities of the countries advised to
Customer from time to time and Bank may, by notification in writing, in
its absolute discretion, supplement or amend the countries in which the
tax reclamation services are offered. Other than as expressly provided
in this Section 8.2 Bank will have no responsibility with regard to
Customer's tax position or status in any jurisdiction.

(d)Customer confirms that Bank is authorized to disclose any information
requested by any revenue authority or any governmental body in relation
to the processing of any tax reclaim.

Page 15

9.TERMINATION

Either party may terminate this Agreement on sixty days' notice in
writing to the other party. If Customer gives notice of termination, it
must provide full details of the persons to whom Bank must deliver
Financial Assets and cash. If Bank gives notice of termination, then
Customer must, within sixty days, notify Bank of details of its new
custodian, failing which Bank may elect (at any time after the sixty day
notice period) either to retain the Financial Assets and cash until such
details are given, continuing to charge fees due (in which case Bank's
sole obligation will be for the safekeeping of the Financial Assets and
cash), or deliver the Financial Assets and cash to Customer. Bank will
in any event be entitled to deduct any amounts owing to it prior to
delivery of the Financial Assets and cash (and, accordingly, Bank will
be entitled to sell Financial Assets and apply the sale proceeds in
satisfaction of amounts owing to it). Customer will reimburse Bank
promptly for all out-of-pocket expenses it incurs in delivering
Financial Assets upon termination. Termination will not affect any of
the liabilities either party owes to the other arising under this
Agreement prior to such termination.

10.MISCELLANEOUS

10.1Notices.

Notices (other than Instructions) will be served by registered mail or
hand delivery to the address of the respective parties as set out on the
first page of this Agreement, unless notice of a new address is given to
the other party in writing. Notice will not be deemed to be given
unless it has been received.

10.2Successors and Assigns.

This Agreement will be binding on each of the parties' successors and
assigns, but the parties agree that neither party can assign its rights
and obligations under this Agreement without the prior written consent
of the other party, which consent will not be unreasonably withheld.

10.3Interpretation.

Headings are for convenience only and are not intended to affect
interpretation. References to sections are to sections of this
Agreement and references to sub-sections and paragraphs are to sub-
sections of the sections and paragraphs of the sub-sections in which
they appear.

10.4Entire Agreement.

This Agreement, including the Schedules, Exhibits, and any riders (and
any separate agreement which Bank and Customer may enter into with
respect to any Cash Account), sets out the entire Agreement between the
parties in connection with the subject matter, and this Agreement

Page 16

supersedes any other agreement, statement, or representation relating to
custody, whether oral or written. Amendments must be in writing and
signed by both parties.

10.5Confidentiality.

Bank will not disclose any confidential information concerning the
Financial Assets and/or cash held for Customer except as is reasonably
necessary to provide services to Customer, as required by law or
regulation or the organizational documents of the issuer of any
Financial Asset, or with the consent of Customer. Customer agrees to
keep this Agreement confidential and, except where disclosure is
required by law or regulation, will only disclose it (or any part of it)
with the prior written consent of Bank.

10.6Insurance.

Bank will not be required to maintain any insurance coverage for the
benefit of Customer.

10.7Governing Law and Jurisdiction.

This Agreement will be construed, regulated, and administered under the
laws of the United States or State of New York, as applicable, without
regard to New York's principles regarding conflicts of law. The United
States District Court for the Southern District of New York will have
the sole and exclusive jurisdiction over any lawsuit or other judicial
proceeding relating to or arising from this Agreement. If that court
lacks federal subject matter jurisdiction, the Supreme Court of the
State of New York, New York County will have sole and exclusive
jurisdiction. Either of these courts will have proper venue for any
such lawsuit or judicial proceeding, and the parties waive any objection
to venue or their convenience as a forum. The parties agree to submit
to the jurisdiction of any of the courts specified and to accept service
of process to vest personal jurisdiction over them in any of these
courts. The parties further hereby knowingly, voluntarily and
intentionally waive, to the fullest extent permitted by applicable law,
any right to a trial by jury with respect to any such lawsuit or
judicial proceeding arising or relating to this Agreement or the
transactions contemplated hereby.

10.8 Severability and Waiver.

(a) If one or more provisions of this Agreement are held invalid,
illegal or unenforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances
or in other jurisdictions and of the remaining provisions will not in
any way be affected or impaired.

(b)Except as otherwise provided herein, no failure or delay on the part
of either party in exercising any power or right hereunder operates as a
waiver, nor does any single or partial exercise of any power or right
preclude any other or further exercise, or the exercise of any other
power or right. No waiver by a party of any provision of this
Agreement, or waiver of any breach or default, is effective unless in
writing and signed by the party against whom the waiver is to be enforced.

Page 17

10.9 Counterparts.

This Agreement may be executed in several counterparts each of which
will be deemed to be an original and together will constitute one and
the same agreement.

_________________________________________

By:_______________________________________
Title:
Date:

THE CHASE MANHATTAN BANK

By:_______________________________________
Title:
Date:

Page 18

GLOBAL CUSTODY RIDER
TO
DOMESTIC CUSTODY AGREEMENT
BETWEEN
THE CHASE MANHATTAN BANK
AND
______________________________________________

GLOBAL CUSTODY RIDER
TO
DOMESTIC CUSTODY AGREEMENT

1.INTENTION OF THE PARTIES; DEFINITIONS

1.1 Intention of the Parties.

(a)This Rider together with the Domestic Custody Agreement sets out the
terms governing the custody, settlement and certain associated services
offered by Bank with respect to Global Securities (i.e. Securities other
than U.S. Securities, which are governed exclusively by the terms of the
Domestic Custody Agreement). To the extent there are any
inconsistencies between the terms of the Domestic Custody Agreement and
the terms of this Rider, the terms of this Rider shall govern.

(b)Investing in foreign markets may be a risky enterprise. The holding
of Financial Assets and cash in foreign jurisdictions may involve risks
of loss or other special features. Bank will not be liable for any loss
that results from the general risks of investing or Country Risk.

1.2 Definitions.

All capitalized terms used in this Rider unless defined herein shall
have the meanings given to such terms as set forth in the Domestic
Custody Agreement.

"Affiliated Subcustodian" means a Subcustodian that is an Affiliate.

"Bank" means The Chase Manhattan Bank.

"Bank's London Branch" means the London branch office of The Chase
Manhattan Bank.

"Country Risk" means the risk of investing or holding assets in a
particular country or market, including, but not limited to, risks
arising from; nationalization, expropriation or other governmental
actions; the country's financial infrastructure including prevailing
custody and settlement practices, laws applicable to the safekeeping and
recovery of Financial Assets and cash held in custody; regulation of
banking and securities industries, including changes in market rules;
currency restrictions, devaluations or fluctuations; and market
conditions affecting the orderly execution of securities transactions or
the value of assets.

"Customer" means _______________________________________________________.

Page 2

"Domestic Custody Agreement" or "DCA" means the Domestic Custody
Agreement between Bank and Customer.

"Eligible Foreign Custodian" means: (i) a banking institution or trust
company, incorporated or organized under the laws of a country other
than the United States, that is regulated as such by that country's
government or an agency thereof; (ii) a majority-owned direct or
indirect subsidiary of a U.S. bank or bank holding company which
subsidiary is in-corporated or organized under the laws of a country
other than the United States; and (iii) any other entity (other than an
Eligible Securities Depository) that shall have been so qualified by
exemptive order, rule or other appropriate action of the SEC.

"Eligible Securities Depository" has the meaning as set forth in
paragraph (a) of Section 2.10 of this Rider.

"Financial Assets" as used in this Rider shall relate exclusively to
Global Securities.

"Foreign Custody Manager" has the meaning as set forth in paragraph (a)
of Section 2.10 of this Rider.

"Global Securities" has the meaning as set forth in paragraph (a) of
Section 1.1 of this Rider.

"Subcustodian" has the meaning set forth in paragraph (a) of Section 5.1
of this Rider and includes Affiliated Subcustodians. Subcustodians are
Securities Intermediaries. Bank Indemnitees shall include Subcustodians
and their nominees, directors, officers, employees and agents.

"U.S. Bank" means a U.S. bank as defined in SEC rule 17f-5(a) (7) of the
1940 Act.

"1940 Act" means Investment Company Act of 1940, as amended.

2. WHAT THE BANK IS REQUIRED TO DO

2.1 Cash Accounts.

(a) For the purpose of this Rider, Cash Accounts mean one or more
deposits accounts in the name of Customer at Bank's London Branch. Any
cash so deposited with Bank's London Branch shall be payable exclusively
by Bank's London Branch in the applicable currency, subject to
compliance with any applicable laws, regulations, governmental decrees
or similar orders.

Page 3

(b)Notwithstanding paragraph (a) hereof, cash held in respect of those
markets where Customer is required to have a cash account in its own
name held directly with the relevant Subcustodian will be held in that
manner and will not be part of the Cash Account.

2.2 Segregation of Assets; Nominee Name.

(a) Bank will require each Subcustodian to identify in its own records
that Financial Assets credited to Customer's Securities Account belong
to customers of Bank (to the extent permitted by Applicable Law or
market practice), such that it is readily apparent that the Financial
Assets do not belong to Bank or Subcustodian.

(b)Bank and Subcustodian are authorized to register in the name of
Subcustodian such Financial Assets as are customarily held in registered
form. Customer authorizes Bank or its Subcustodian to hold Financial
Assets in omnibus accounts and will accept delivery of Financial Assets
of the same class and denomination as those deposited with Bank or its
Subcustodian.

2.3 Income Collection; Autocredit.

Bank shall provide income collection and autocredit service for Global
Securities as set for in Section 2.7 of the DCA, but neither Bank nor
its Subcustodians shall be obligated to file any formal notice of
default, institute legal proceedings, file proof of claim in any
insolvency proceeding, or take any similar action in respect of any
Global Securities.

2.4 Contractual Settlement Date Accounting.

If Customer has elected to have contractual settlement date accounting
service for the Global Securities credited to its Securities Accounts,
Bank will provides such service with respect to settlement of trades in
those global markets where the service is offered as provided in Section
2.5 of the DCA.

2.5 Proxy Voting with respect to Global Securities.

(a)Subject to and upon the terms of this sub-section, Bank will provide
Customer with information which it receives on matters to be voted upon
at meetings of holders of Financial Assets ("Notifications"), and Bank
will act in accordance with Customer's Instructions in relation to such
Notifications ("the active proxy voting service"). If information is
received by Bank at its proxy voting department too late to permit
timely voting by Customer, Bank's only obligation is to provide, so far
as reasonably practicable, a Notification (or summary information
concerning a Notification) on an "information only" basis.

(b)The active proxy voting service is available only in certain markets,
details of which are available from Bank on request. Provision of the
active proxy voting service is conditional upon receipt by Bank of a
duly completed enrollment form as well as additional documentation that
may be required for certain markets.

Page 4

(c)Bank will act upon Instructions to vote on matters referred to in a
Notification, provided Instructions are received by Bank at its proxy
voting department by the deadline referred to in the relevant
Notification. If Instructions are not received in a timely manner, Bank
will not be obligated to provide further notice to Customer.

(d)Bank reserves the right to provide Notifications or parts thereof in
the language received. Bank will attempt in good faith to provide
accurate and complete Notifications, whether or not translated.

(e)Customer acknowledges that Notifications and other information
furnished pursuant to the active proxy voting service ("information")
are proprietary to Bank and that Bank owns all intellectual property
rights, including copyrights and patents, embodied therein.
Accordingly, Customer will not make any use of such information except
in connection with the active proxy voting service.

(f)In markets where the active proxy voting service is not available or
where Bank has not received a duly completed enrollment form or other
relevant documentation, Bank will not provide Notifications to Customer
but will endeavor to act upon Instructions to vote on matters before
meetings of holders of Financial Assets where it is reasonably
practicable for Bank (or its Subcustodians or nominees as the case may
be) to do so and where such Instructions are received in time for Bank
to take timely action (the "passive proxy voting service").

(g)Customer acknowledges that the provision of proxy voting services
(whether active or passive) may be precluded or restricted under a
variety of circumstances. These circumstances include, but are not
limited to: (i) the Financial Assets being on loan or out for
registration, (ii) the pendency of conversion or another corporate
action, or (iii) Financial Assets being held at Customer's request in a
name not subject to the control of Bank or its Subcustodian, in a margin
or collateral account at Bank or another bank or broker, or otherwise in
a manner which affects voting, local market regulations or practices, or
restrictions by the issuer. Additionally, in some cases Bank may be
required to vote all shares held for a particular issue for all of
Bank's customers in the same way. Bank will inform Customer where this
is the case.

(h)Notwithstanding the fact that Bank may act in a fiduciary capacity
with respect to Customer under other agreements or otherwise hereunder,
in performing active or passive voting proxy services Bank will be
acting solely as the agent of Customer, and will not exercise any
discretion with regard to such proxy services or vote any proxy except
when directed by an Authorized Person.

2.6 Access to Subcustodian's Records.

Subject to restrictions under Applicable Law, Bank will obtain an
undertaking to permit Customer's independent public accountants
reasonable access to the records of any Subcustodian in respect of any
Financial Assets credited to the Securities Account as may be required
in connection with such examination.

Page 5

2.7 Maintenance of Finanacial Assets at Subcustodian Locations.

(a)Unless Instructions require another location acceptable to Bank,
Financial Assets will be held in the country or jurisdiction in which
their principal trading market is located, where such Financial Assets
may be presented for payment, where such Financial Assets were acquired,
or where such Financial Assets are held. Bank reserves the right to
refuse to accept delivery of Financial Assets or cash in countries and
jurisdictions other than those referred to in Schedule 1 to this
Agreement, as in effect from time to time.

(b)Bank will not be obliged to follow an Instruction to hold Financial
Assets with, or have them registered or recorded in the name of, any
person not chosen by Bank. However, if Customer does instruct Bank to
hold Global Securities with or register or record Global Securities in
the name of a person not chosen by Bank, the consequences of doing so
are at Customer's own risk and Bank will not be liable therefor.

2.8 Tax Reclaims.

Bank will provide for Global Securities as set forth in Section 8.2 of
the DCA, the same tax reclamation services that Bank provides for
American Depository Receipts.

2.9 Foreign Exchange Transactions.

To facilitate the administration of Customer's trading and investment
activity, Bank may, but will not be obliged to, enter into spot or
forward foreign exchange contracts with Customer, or an Authorized
Person, and may also provide foreign exchange contracts and facilities
through its Affiliates or Subcustodians. Instructions, including
standing instructions, may be issued with respect to such contracts, but
Bank may establish rules or limitations concerning any foreign exchange
facility made available. In all cases where Bank, its Affiliates or
Subcustodians enter into a master foreign exchange contract that covers
foreign exchange transactions for the Accounts, the terms and conditions
of that foreign exchange contract and, to the extent not inconsistent,
this Agreement, will apply to such transactions.

2.10 Compliance with SEC rule 17f-5.

(a) Customer's board of directors (or equivalent body) (hereinafter
'Board') hereby delegates to Bank, and, except as to the country or
countries as to which Bank may, from time to time, advise Customer that
it does not accept such delegation, Bank hereby accepts the delegation
to it, of the obligation to perform as Customer's "Foreign Custody
Manager" (as that term is defined in SEC rule 17f-5(a)(2) as promulgated
under the 1940 Act, both for the purpose of selecting Eligible Foreign
Custodians (as that term is defined in SEC rule 17f-5(a)(1), and as the
same may be amended from time to time, or that have otherwise been made
exempt pursuant to an SEC exemptive order) to hold Financial Assets and
Cash and of evaluating the contractual arrangements with such Eligible
Foreign Custodians (as set forth in SEC rule 17f-5(c)(2)); provided
that, the term Eligible Foreign Custodian shall not include any
"Eligible Securities Depository." An Eligible Securities Depository for
purposes hereof shall have the same meaning as in SEC rule 17f-7 as
proposed on April 29, 1999. (Eligible Securities Depositories used by

Page 6

Bank as of the date hereof are set forth in Appendix 1-A hereto, and as
the same may be amended on notice to Customer from time to time.)

(b) In connection with the foregoing, Bank shall:

(i) provide written reports notifying Customer's Board of the placement
of Financial Assets and Cash with par-ticular Eligible Foreign
Custodians and of any material change in the arrangements with such
Eligible Foreign Custodians, with such reports to be provided to
Customer's Board at such times as the Board deems reasonable and
appropriate based on the circumstances of Customer's foreign custody
arrangements (and until further notice from Customer such reports shall
be provided not less than quarterly with respect to the placement of
Financial Assets and Cash with particular Eligible Foreign Custodians
and with reasonable promptness upon the occurrence of any material
change in the arrangements with such Eligible Foreign Custodians);

(ii) exercise such reasonable care, prudence and diligence in performing
as Customer's Foreign Custody Manager as a person having responsibility
for the safekeeping of Financial Assets and cash would exercise;

(iii) in selecting an Eligible Foreign Custodian, first have determined
that Financial Assets and cash placed and maintained in the safekeeping
of such Eligible Foreign Custodian shall be subject to reasonable care,
based on the standards applicable to custodians in the relevant market,
after having considered all factors relevant to the safekeeping of such
Financial Assets and cash, including, without limitation, those factors
set forth in SEC rule 17f-5(c)(1)(i)-(iv);

(iv) determine that the written contract with an Eligible Foreign
Custodian requires that the Eligible Foreign Custodian will provide
reasonable care for Financial Assets and Cash based on the standards
applicable to custodians in the relevant market.

(v) have established a system to monitor the continued appropriateness
of maintaining Financial Assets and cash with particular Eligible
Foreign Custodians and of the governing contractual arrangements; it
being understood, however, that in the event that Bank shall have
determined that the existing Eligible Foreign Custodian in a given
country would no longer afford Financial Assets and cash reasonable care
and that no other Eligible Foreign Custodian in that country would
afford reasonable care, Bank shall promptly so advise Customer and shall
then act in accordance with the Instructions of Customer with respect to
the disposition of the affected Financial Assets and cash.

Subject to (b)(i)-(v) above, Bank is hereby authorized to place and
maintain Financial Assets and cash on behalf of Customer with Eligible
Foreign Custodians pursuant to a written contract deemed appropriate by
Bank.

(c) Except as expressly provided herein, Customer shall be solely
responsible to assure that the maintenance of Financial Assets and cash
hereunder complies with the rules, regulations, interpretations and
exemptive orders promulgated by or under the authority of the SEC.

Page 7

(d) Bank represents to Customer that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Customer represents to Bank that: (1) the Financial
Assets and cash being placed and maintained in Bank's custody are
subject to the 1940 Act, as the same may be amended from time to time;
(2) its Board: (i) has determined that it is reasonable to rely on Bank
to perform as Customer's Foreign Custody Manager (ii) or its investment
adviser shall have determined that Custo-mer may maintain Financial
Assets and cash in each country in which Customer's Financial Assets and
cash shall be held hereunder and determined to accept the Country Risks
arising therefrom. Nothing contained herein shall require Bank to make
any selection or to engage in any monitoring on behalf of Customer that
would entail consideration of Country Risk.

(e) Bank shall provide to Customer such information relating to Country
Risk as is specified in Appendix 1-B hereto. Customer hereby
acknowledges that: (i) such information is solely designed to inform
Customer of market conditions and procedures and is not intended as a
recommendation to invest or not invest in particular markets; and (ii)
Bank has gathered the information from sources it considers reliable,
but that Bank shall have no responsibility for inac-curacies or
incomplete information.

3. INSTRUCTIONS

Bank will act upon all Instructions received from Customer with respect
to the Financial Assets and cash held for the Accounts in accordance
with Article 3 of the DCA and this Rider.

4. FEES EXPENSES AND OTHER AMOUNTS OWING TO BANK

4.1 Fees and Expenses.

Customer will pay Bank for its services hereunder the fees set forth in
Schedule B hereto or such other amounts as may be agreed upon in writing
from time to time, together with Bank's reasonable out-of-pocket or
incidental expenses, including, but not limited to, legal fees. Customer
authorizes Bank to charge any Cash Accounts, for any such fees or
expenses.

4.2 Overdrafts.

If a debit to any currency in the Cash Account results (or will result)
in a debit balance in that currency, then Bank may, in its discretion,
(i) advance an amount equal to the overdraft, (ii) or reject the
settlement in whole or in any part, or (iii) if posted to the Securities
Account, reverse the posting of the Financial Assets credited to the
Securities Account. If Bank elects to make such an advance, the advance
will be deemed a loan to Customer, payable on demand, bearing interest
at the rate charged by Bank from time to time, for overdrafts incurred
by customers similar to Customer, from the date of such advance to the
date of payment (both after as well as before judgment) and otherwise on
the terms on which Bank makes similar overdrafts available from time to
time. No prior action or course of dealing on Bank's part with respect
to the settlement of transactions on Customer's behalf will be asserted
by Customer against Bank for Bank's refusal to make advances to the Cash

Page 8

Account or to settle any transaction for which Customer does not have
sufficient available funds in the Account.

5. SUBCUSTODIANS

5.1 Appointment of Subcustodians.

(a)Bank is authorized under this Rider to act through and hold
Customer's Financial Assets with subcustodians, being at the date of
this Rider the entities listed in Schedule 1 and/or such other entities
as Bank may appoint as subcustodians ("Subcustodians"). Bank will use
reasonable care in the selection and continued appointment of such
Subcustodians. In addition, Bank and each Subcustodian may deposit
Financial Assets with, and hold Financial Assets in, any Securities
Depository on such terms as such systems customarily operate and
Customer will provide Bank with such documentation or acknowledgements
that Bank may require to hold the Financial Assets in such systems. At
the request of Customer, Bank may, but need not, add to Schedule 1-A an
Eligible Foreign Custodian where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify
Customer in the event that it elects to add any such entity.

(b)Any agreement Bank enters into with a Subcustodian for holding Bank's
customers' assets will provide that such assets will not be subject to
any right, charge, security interest, lien or claim of any kind in favor
of such Subcustodian except for safe custody or administration, and, in
the case of Financial Assets, that beneficial ownership will be freely
transferable without the payment of money or value other than for safe
custody or administration. Where a Subcustodian deposits Securities
with a Securities Depository, Bank will cause the Subcustodian to
identify on its records as belonging to Bank, as agent, the Securities
shown on the Subcustodian's account at such Securities Depository. The
foregoing will not apply to the extent of any special agreement or
arrangement made by Customer with any particular Subcustodian.

5.2 Liability of Subcustodians.

(a)Subject to the limitations of liability of Bank set forth in
paragraph (b) of Section 7.1 of the DCA, but exclusive of the
limitations of liability in respect of Agents as set forth in Section
5.2 of the DCA, Bank will be liable for direct losses incurred by
Customer that result from:

(i)the failure by the Subcustodian to use reasonable care in the
provision of custodial services by it in accordance with the standards
prevailing in the relevant market or from the fraud or willful default
of such Subcustodian in the provision of custodial services by it; or

(ii)the insolvency of any Affiliated Subcustodian.

(b)Subject to paragraph (a)(i) of Section 5.2 of this Rider, Bank's duty
to use reasonable care in the monitoring of a Subcustodian's financial
condition as reflected in its published financial statements and other
publicly available financial information concerning it, Bank will not be

Page 9

responsible for the insolvency of any Subcustodian which is not a branch
or an Affiliated Subcustodian.

(c)Bank reserves the right to add, replace or remove Subcustodians.
Bank will give prompt notice of any such action, which will be advance
notice if practicable. Upon request by Customer, Bank will identify the
name, address and principal place of business of any Subcustodian and
the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.

6. WHEN BANK IS LIABLE TO CUSTOMER

Bank shall be entitled to all the protective provisions of Article 7 of
the DCA in the performance of its duties and obligations under this
Rider. Subcustodians shall be entitled to indemnification under
paragraph (c) of Section 7.1 as Bank Indemnitees. Nevertheless Customer
shall not be obligated to indemnify any Subcustodian under Section
7.1(c) as Bank's agent with respect to any Liability for which Bank is
liable under Section 5.2 of this Rider. For purposes of clarity, it is
agreed that as used in paragraph (a) of Section 5.2 of this Rider, the
term Subcustodian shall not include any Eligible Foreign Custodian as to
which Bank has not acted as Foreign Custody Manager.

7. ADDITIONAL TAX OBLIGATIONS

In addition to Customer's obligations under Section 8.1 of the DCA, if
Bank does not receive appropriate declarations, documentation and
information then additional United Kingdom taxation will be deducted
from all income received in respect of Global Securities issued outside
the United Kingdom and United States non-resident alien tax will be
deducted from United States source income. Customer will provide to
Bank such certifications, documentation, and information as it may
require in connection with taxation, and warrants that, when given, this
information is true and correct in every respect, not misleading in any
way, and contains all material information. Customer undertakes to
notify Bank immediately if any information requires updating or
correcting.

8. MISCELLANEOUS

8.1 Information Concerning Deposits at Bank's London Branch.

Bank's London Branch is a member of the United Kingdom Deposit
Protection Scheme (the "Scheme") established under Banking Act 1987 (as
amended). The Scheme provides that in the event of Bank's insolvency
payments may be made to certain customers of Bank's London Branch.
Payments under the Scheme are limited to 90% of a depositor's total cash
deposits subject to a maximum payment to any one depositor of ****Char
Pound****18,000 (or ECU 20,000 if greater). Most deposits denominated
in sterling and other European Economic Area Currencies and ECU made
with Bank within the United Kingdom are covered. Further details of the
Scheme are available on request.

Page 10

8.2 Severability and Waiver.

(a)If one or more provisions of this Rider are held invalid, illegal or
unenforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and
enforceability of such provision or provisions under other circumstances
or in other jurisdictions and of the remaining provisions will not in
any way be affected or impaired.

(b)Except as otherwise provided herein, no failure or delay on the part
of either party in exercising any power or right hereunder operates as a
waiver, nor does any single or partial exercise of any power or right
preclude any other or further exercise, or the exercise of any other
power or right. No waiver by a party of any provision of this Rider, or
waiver of any breach or default, is effective unless in writing and
signed by the party against whom the waiver is to be enforced.

8.3 Sections Incorporated by Reference.

For the avoidance of doubt, the entire Article 10 of the DCA is
incorporated by reference into this Rider. All references to
"Agreement" therein shall be read to include "Rider".

8.4 Termination.

This Rider may be terminated by either party on 60 days written notice
to the other party. This Rider shall automatically terminate with the
termination of the DCA. Article 9 of the DCA, to the extent applicable,
shall apply to any such termination of this Rider.

__________________________________ (Customer)

By: _______________________________
Title: ______________________________
Date: ______________________________

THE CHASE MANHATTAN BANK (Bank)

By: ________________________________
Title: _______________________________
Date: _______________________________

Page 11

Appendix 1-A

ELIGIBLE SECURITIES DEPOSITORIES

Page 12

Appendix 1-B

Information Regarding Country Risk

1. To aid Customer in its determinations regarding Country Risk, Bank
shall furnish annually and upon the initial placing of Financial Assets
and cash into a country the following information (check items
applicable):

A Opinions of local counsel concerning:

___i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records kept by
an eligible foreign custodian located in that country.

___ii. Whether applicable foreign law would restrict the Customer's
ability to recover its Financial Assets and cash in the event of the
bankruptcy of an Eligible Foreign Custodian located in that country.

___iii. Whether applicable foreign law would restrict the Customer's
ability to recover Financial Assets that are lost while under the
control of an Eligible Foreign Custodian located in the country.

B. Written information concerning:

___i. The foreseeability of expropriation, nationalization, freezes, or
confiscation of Customer's Financial Assets.

___ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]

C. A market report with respect to the following topics:

(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement and
registration, (v) taxation, and (vi) depositories (including depository
evaluation), if any.

2. To aid Customer in monitoring Country Risk, Bank shall furnish board
the following additional information:

Market flashes, including with respect to changes in the information in
market reports

Page 13

FOREIGN CUSTODY MANAGER AGREEMENT
BETWEEN
FIRST DEFINED PORTFOLIO FUND, LLC
AND
FIRST TRUST ADVISORS L.P.

AGREEMENT made the 1st day of October, 1999 by and between First Defined
Portfolio Fund, LLC (the "Company"), a Delaware limited liability
company and First Trust Advisors L.P. ("First Trust"), an Illinois
limited partnership.

WHEREAS, the Company is registered under the Investment Company Act of
1940 (the "1940 Act") as an open-end diversified management series
investment company;

WHEREAS, certain series of the Company have investments the primary
market of which is outside the United States and seek to maintain such
assets (including foreign currencies) and such cash and cash equivalents
as are reasonably necessary to effect the series' transactions in such
foreign investments with an Eligible Foreign Custodian (as such term is
defined in Rule 17f-5 of the 1940 Act);

WHEREAS, the Trust desires to appoint First Trust as the Foreign Custody
Manager (as such term is defined in Rule 17f-5 of the 1940 Act) for the
purpose of selecting Eligible Foreign Custodians which are Compulsory
Depositories (as defined below) to place and maintain the assets of the
series of the Company listed in Schedule A attached hereto, as such
schedule may be amended from time to time (each such series shall
hereinafter be referred to as a "Series"), evaluating the custodial
arrangements with such Compulsory Depositories, and monitoring the
foreign custody arrangements with such Compulsory Depositories and First
Trust desires to serve as Foreign Custody Manager with respect to the
foregoing;

WHEREAS, the Board of Trustees has determined that it is reasonable to
rely on First Trust to perform the respective duties of Foreign Custody
Manager described herein and has selected First Trust to serve as
Foreign Custody Manager to perform such duties;

Now, Therefore, in consideration of the mutual agreements made herein,
the Company and First Trust agree as follows:

1. Definitions:

a. "Compulsory Depositories" shall mean a Securities Depository in a
foreign country the use of which is for practical purposes compulsory
because its use is required by law or regulation, because securities
cannot be withdrawn from it, or because maintaining securities outside

Page 1

the depository is not consistent with the prevailing custodial practices
in the country which the depository serves.

b. "Eligible Foreign Custodian," "Foreign Custody Manager," and
"Securities Depository" shall have the same meanings as set forth in
Rule 17f-5 of the 1940 Act.

c. "Foreign Assets" shall mean the Series' investments (including
foreign currencies) for which the primary market is outside the United
States, and such cash and cash equivalents as are reasonably necessary
to effect the Series' transactions in such investments.

2. Duties of Foreign Custody Manager:

First Trust agrees that it will perform the following services:

a. provide written reports notifying the Company's Board of Trustees of
the placement of a Series' Foreign Assets with a particular Compulsory
Depository on no less than a quarterly basis (or at such other times as
the Board of Trustees may determine) and of any material change in the
Series' arrangements with reasonable promptness upon the occurrence of
such changes (or at such other times as the Board of Trustees may
determine);

b. exercise reasonable care, prudence and diligence in performing as
the Series' Foreign Custody Manager as a person having responsibility
for the safekeeping of the Series' assets would exercise;

c. in selecting a Compulsory Depository, First Trust shall first
determine that the Series' Foreign Assets placed and maintained in the
safekeeping of such Compulsory Depository shall be subject to reasonable
care, based on the standards applicable to custodians in the relevant
market, after having considered all factors relevant to the safekeeping
of such Assets, including, without limitation, those factors set forth
in Rule 17f-5(c)(1)(i)-(iv);

d. determine that the written contract, the rules or established
practices or procedures of the Compulsory Depository, or any combination
of the foregoing which governs the foreign custody arrangements with
such Compulsory Depository will provide reasonable care for the Series'
Foreign Assets based on the standards applicable to custodians in the
relevant market and that such arrangements include the provisions
required by Rule 17f-5(c)(2)(i)-(ii);

e. have established a system to monitor the continued appropriateness
of maintaining the Series' Foreign Assets with a particular Compulsory
Depository and of the governing custodial arrangements and if First
Trust determines that the existing Compulsory Depository in a given
country would no longer afford the Series' Foreign Assets reasonable
care, First Trust shall promptly withdraw the affected Foreign Assets
from such Compulsory Depository as soon as reasonably practicable.

Subject to 2(a)-(e) above, First Trust is hereby authorized to place
and maintain the Series' Foreign Assets with Eligible Foreign
Custodians that are Compulsory Depositories.

Page 2

3. Fees of Foreign Custody Manager:

First Trust is currently the investment adviser to the Series and
receives a management fee described in the Series' registration
statement. First Trust has agreed to provide the services under this
Agreement at no additional fee. The Series is responsible for all
charges of a Compulsory Depository for the safekeeping and servicing of
such Series' Foreign Assets and any other expenses incidental thereto.

4. Effective Date and Termination:

This Agreement shall become effective as to any Series as of the
effective date for that Series specified in Schedule A hereto. This
Agreement shall continue in effect until terminated. This Agreement may
be terminated at any time, without payment of any penalty, by mutual
consent of First Trust and the Board of Trustees of the Company and may
be terminated by either First Trust or the Board of Trustees of the
Company upon 30 days' written notice to the other party to the
Agreement.

5. Non-Liability of certain Persons:

Any obligation of the Company hereunder shall be binding only upon the
assets of the Company (or the applicable Series thereof) and shall not
be binding upon any Trustee, officer, employee, agent, member or
shareholder of the Company. Neither the authorization of any action by
any Trustee, officer, employee, agent, member or shareholder of the
Company nor the execution of this Agreement on behalf of the Company
shall impose any liability upon any Trustee, officer, employee, agent,
member or shareholder of the Company.

6. References and Headings:

In this Agreement and in any such amendment, references to this
Agreement and all expressions such as "herein," "hereof," and
"hereunder" shall be deemed to refer to this Agreement as amended or
affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction, or effect of this
Agreement. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.

Page 3

Dated: FIRST DEFINED PORTFOLIO FUND, LLC

Attest By__________________________

___________________

FIRST TRUST ADVISORS L.P.

Attest By___________________________

___________________

Page 4

SCHEDULE A

SERIES EFFECTIVE DATE

The Dow(SM) Target 5 Portfolio October 1, 1999
The Dow(SM) Dart 10 Portfolio October 1, 1999
Global Target 15 Portfolio October 1, 1999
S&P Target 10 Portfolio October 1, 1999
NASDAQ Target 15 Portfolio October 1, 1999
First Trust 10 Uncommon Values Portfolio October 1, 1999
First Trust Energy Portfolio October 1, 1999
First Trust Financial Services Portfolio October 1, 1999
First Trust Internet Portfolio October 1, 1999
First Trust Pharmaceutical Portfolio October 1, 1999
First Trust Technology Portfolio October 1, 1999

Page 5

SERVICES AGREEMENT

THIS AGREEMENT, dated as of this ____ day of _________________, 1999
(the "Effective Date") between First Defined Portfolio Fund, LLC (the
"Fund"), a Delaware Limited Liability Company having its principal place
of business at 1001 Warrenville Road , Lisle, IL, 60532 and FIRST DATA
INVESTOR SERVICES GROUP, INC. ("Investor Services Group"), a
Massachusetts corporation with principal offices at 4400 Computer Drive,
Westboro, Massachusetts 01581.

WITNESSETH

WHEREAS, the Fund is authorized to issue Membership Interests in
separate series, with each such series representing interests in a
separate portfolio of securities or other assets.

WHEREAS, the Fund initially intends to offer Membership Interests in
those Portfolios identified in the attached Schedule A, each such
Portfolio, together with all other Portfolios subsequently established
by the Fund shall be subject to this Agreement in accordance with
Article 14;

WHEREAS, the Fund on behalf of the Portfolios, desires to appoint
Investor Services Group as its administrator, fund accounting agent,
transfer agent, dividend disbursing agent and agent in connection with
certain other activities and Investor Services Group desires to accept
such appointment;

NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Fund and Investor Services Group agree as
follows:

Article 1Definitions.

1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:

(a)"Articles of Incorporation" shall mean the Articles of Incorporation,
Limited Liability Company Agreement, Operating By-Laws, Declaration of
Trust, Certificate of Formation or other similar organizational document
as the case may be, of the Fund as the same may be amended from time to
time.

(b)"Authorized Person" shall be deemed to include (i) any authorized
officer of the Fund; or (ii) any person, whether or not such person is
an officer or employee of the Fund, duly authorized to give Oral
Instructions or Written Instructions on behalf of the Fund as indicated
in writing to Investor Services Group from time to time.

(c)"Board Members" shall mean the Directors or Trustees of the governing
body of the Fund, as the case may be.

Page 1

(d)"Board of Trustees" shall mean the Board of Directors or Board of
Trustees of the Fund, as the case may be.

(e)"Commencement Date" shall mean the date on which Investor Services
Group commences providing services to the Fund pursuant to this Agreement.

(f)"Commission" shall mean the Securities and Exchange Commission.

(g)"Custodian" refers to any custodian or subcustodian of securities and
other property which the Fund may from time to time deposit, or cause to
be deposited or held under the name or account of such a custodian
pursuant to a Custodian Agreement.

(h)"Member" shall mean a record owner of Membership Interests of each
respective Portfolio of the Fund.

(i)"Membership Interests" refers collectively to such shares of capital
stock or beneficial interest, as the case may be, or class thereof, of
each respective Portfolio of the Fund as may be issued from time to time.

(j)"1934 Act" shall mean the Securities Exchange Act of 1934 and the
rules and regulations promulgated thereunder, all as amended from time
to time.

(k)"1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, all as amended from time
to time.

(l)"Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by Investor Services Group from a person
reasonably believed by Investor Services Group to be an Authorized Person;

(m)"Portfolio" shall mean each separate series of shares offered by the
Fund representing interests in a separate portfolio of securities and
other assets;

(n)"Prospectus" shall mean the most recently dated Fund Prospectus and
Statement of Additional Information, including any supplements thereto
if any, which has become effective under the Securities Act of 1933 and
the 1940 Act.

(o)"Written Instructions" shall mean a written communication signed by a
person reasonably believed by Investor Services Group to be an
Authorized Person and actually received by Investor Services Group.
Written Instructions shall include manually executed originals and
authorized electronic transmissions, including telefacsimile of a
manually executed original or other process.

Page 2

Article 2 Appointment of Investor Services Group.

The Fund, on behalf of the Portfolios, hereby appoints and constitutes
Investor Services Group as its sole and exclusive transfer agent and
dividend disbursing agent for Membership Interests of each respective
Portfolio of the Fund and as administrator, fund accounting agent,
shareholder servicing agent for the Fund and Investor Services Group
hereby accepts such appointments and agrees to perform the duties
hereinafter set forth. This Agreement shall be effective as of the
Effective Date.

Article 3 Duties of Investor Services Group.

3.1 Investor Services Group shall be responsible for:

(a)Administering and/or performing the customary services of a transfer
agent; acting as service agent in connection with dividend and
distribution functions; and for performing member account and
administrative agent functions in connection with the issuance, transfer
and redemption or repurchase (including coordination with the Custodian)
of Membership Interests of each Portfolio, as more fully described in
the written schedule of Duties of Investor Services Group annexed hereto
as Schedule B and incorporated herein, and in accordance with the terms
of the Prospectus of the Fund on behalf of the applicable Portfolio,
applicable law and the procedures established from time to time between
Investor Services Group and the Fund.

(b)Recording the issuance of Membership Interests and maintaining
pursuant to Rule 17Ad-10(e) of the 1934 Act a record of the total number
of Membership Interests of each Portfolio which are authorized, based
upon data provided to it by the Fund, and issued and outstanding.
Investor Services Group shall provide the Fund on request with the total
number of Membership Interests of each Portfolio which are authorized
and issued and outstanding and shall have no obligation, when recording
the issuance of Membership Interests, to monitor the issuance of such
Membership Interests or to take cognizance of any laws relating to the
issue or sale of such Membership Interests, which functions shall be the
sole responsibility of the Fund.

(c)Investor Services Group shall be responsible for the following:
performing the customary services of an administrator, including
corporate secretarial and treasury services, and fund accounting agent
for the Fund, as more fully described in the written schedule of Duties
of Investor Services Group annexed hereto as Schedule B and incorporated
herein, and subject to the supervision and direction of the Board of
Trustees of the Fund.

(d)In addition to the foregoing services, the Fund hereby engages
Investor Services Group as its agent for the limited purpose of (i)
accepting invoices charged to the Fund for custody services performed by
the Custodian on the Fund's behalf; (ii) remitting payment to the
Custodian for such services; and (iii) as more fully described in the
written schedule of Duties of Investor Services Group annexed hereto as
Schedule B and incorporated herein.

Page 3

(e)Notwithstanding any of the foregoing provisions of this Agreement,
Investor Services Group shall be under no duty or obligation to inquire
into, and shall not be liable for: (i) the legality of the issuance or
sale of any Membership Interests or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Membership
Interests, or the propriety of the amount to be paid therefor; (iii) the
legality of the declaration of any dividend by the Board of
ManagersTrustees, or the legality of the issuance of any Membership
Interests in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Membership Interests.

3.2 In addition, the Fund shall identify to Investor Services Group in
writing those transactions and assets to be treated as exempt from blue
sky reporting for each State.

3.3 In performing its duties under this Agreement, Investor Services
Group: (a) will act in accordance with the Certificate of Formation,
Limited Liability Company Agreement, Operating By-Laws, Prospectuses and
with the Oral Instructions and Written Instructions of the Fund and will
conform to and comply with the requirements of the 1940 Act and all
other applicable federal or state laws and regulations; and (b) will
consult with legal counsel to the Fund, as necessary and appropriate.
Furthermore, Investor Services Group shall not have or be required to
have any authority to supervise the investment or reinvestment of the
securities or other properties which comprise the assets of the Fund or
any of its Portfolios and shall not provide any investment advisory
services to the Fund or any of its Portfolios.

3.4 In addition to the duties set forth herein, Investor Services Group
shall perform such other duties and functions, and shall be paid such
amounts therefor, as may from time to time be agreed upon in writing
between the Fund and Investor Services Group.

Article 4 Recordkeeping and Other Information.

4.1 Investor Services Group shall create and maintain all records
required of it pursuant to its duties hereunder and as set forth in
Schedule B in accordance with all applicable laws, rules and
regulations, including records required by Section 31(a) of the 1940
Act. Where applicable, such records shall be maintained by Investor
Services Group for the periods and in the places required by Rule 31a-1
and Rule 31a-2 under the 1940 Act.

4.2 To the extent required by Section 31 of the 1940 Act, Investor
Services Group agrees that all such records prepared or maintained by
Investor Services Group relating to the services to be performed by
Investor Services Group hereunder are the property of the Fund and will
be preserved, maintained and made available in accordance with such
section, and will be surrendered promptly to the Fund on and in
accordance with the Fund's request.

4.3 In case of any requests or demands for the inspection of Member
records of the Fund, Investor Services Group will endeavor to notify the
Fund of such request and secure Written Instructions as to the handling
of such request. Investor Services Group reserves the right, however,
to exhibit the Member records to any person whenever it is advised by
its counsel that it may be held liable for the failure to comply with
such request.

Page 4

Article 5 Fund Instructions.

5.1 Investor Services Group will have no liability when acting upon
Written or Oral Instructions believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any
notice of any change of authority of any person until receipt of a
Written Instruction thereof from the Fund.

5.2 At any time, Investor Services Group may request Written Instructions
from the Fund and may seek advice from legal counsel for the Fund with
respect to any matter arising in connection with this Agreement, and it
shall not be liable for any action taken or not taken or suffered by it
in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund. Written
Instructions requested by Investor Services Group will be provided by
the Fund within a reasonable period of time.

5.3 Investor Services Group, its officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any
person representing or acting on behalf of the Fund only if said
representative is an Authorized Person. The Fund agrees that all Oral
Instructions shall be followed within one business day by confirming
Written Instructions, and that the Fund's failure to so confirm shall
not impair in any respect Investor Services Group's right to rely on
Oral Instructions.

Article 6 Compensation.

6.1 The Fund on behalf of each of the Portfolios will compensate Investor
Services Group for the performance of its obligations hereunder in
accordance with the fees and other charges set forth in the written Fee
Schedule annexed hereto as Schedule C and incorporated herein.

6.2 In addition to those fees set forth in Section 6.1 above, the Fund on
behalf of each of the Portfolios agrees to pay, and will be billed
separately for, out-of-pocket expenses incurred by Investor Services
Group in the performance of its duties hereunder. Out-of-pocket
expenses shall include, but shall not be limited to, the items specified
in the written schedule of out-of-pocket charges annexed hereto as
Schedule D and incorporated herein. Schedule D may be modified by
written agreement between the parties. Unspecified out-of-pocket
expenses shall be limited to those out-of-pocket expenses reasonably
incurred by Investor Services Group in the performance of its
obligations hereunder.

6.3 The Fund on behalf of each of the Portfolios hereby authorizes
Investor Services Group to collect its fees, charges and reasonable out-
of-pocket expenses by debiting the Fund's or Portfolio's custody account
for invoices which are rendered for the services performed for the
applicable function. Invoices for the services performed will be sent
to the Fund after such debiting with an indication that payment has been
made.

Page 5

6.4 Any compensation agreed to hereunder may be adjusted from time to
time by attaching to Schedule C, a revised Fee Schedule executed and
dated by the parties hereto.

6.5 The Fund acknowledges that the fees and charges that Investor
Services Group charges the Fund under this Agreement reflect the
allocation of risk between the parties, including the disclaimer of
warranties in Section 9.3 and the limitations on liability and exclusion
of remedies in Section 11.2 and Article 12. Modifying the allocation of
risk from what is stated here would affect the fees that Investor
Services Group charges, and in consideration of those fees, the Fund
agrees to the stated allocation of risk.

6.6 Investor Services Group will from time to time employ or associate
with itself such person or persons as Investor Services Group may
believe to be particularly suited to assist it in performing services
under this Agreement. Such person or persons may be officers and
employees who are employed by both Investor Services Group and the Fund.
The compensation of such person or persons shall be paid by Investor
Services Group and no obligation shall be incurred on behalf of the Fund
in such respect.

6.7 Investor Services Group shall not be required to pay from its own
assets any of the following expenses incurred by the Fund: membership
dues in the Investment Company Institute or any similar organization;
investment advisory expenses; costs of printing prospectuses, reports
and notices; interest on borrowed money; brokerage commissions; stock
exchange listing fees; taxes and fees payable to Federal, state and
other governmental agencies; fees of Board Members of the Fund who are
not affiliated with Investor Services Group; outside auditing expenses;
outside legal expenses; Blue Sky registration or filing fees; or other
expenses not specified in this Section 6.7 which may be properly payable
by the Fund. Investor Services Group shall not be required to pay any
Blue Sky registration or filing fees unless and until it has received
the amount of such fees from the Fund.

Article 7 Documents.

In connection with the appointment of Investor Services Group, the Fund
shall, on or before the date this Agreement goes into effect, but in any
case within a reasonable period of time for Investor Services Group to
prepare to perform its duties hereunder, deliver or caused to be
delivered to Investor Services Group the documents set forth in the
written schedule of Fund Documents annexed hereto as Schedule E.

Article 8 Investor Services Group System.

8.1 Investor Services Group shall retain title to and ownership of any
and all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions,
discoveries, patentable or copyrightable matters, concepts, expertise,
patents, copyrights, trade secrets, and other related legal rights
utilized by Investor Services Group in connection with the services
provided by Investor Services Group to the Fund herein (the "Investor
Services Group System").

Page 6

8.2 Investor Services Group hereby grants to the Fund a limited license
to the Investor Services Group System for the sole and limited purpose
of having Investor Services Group provide the services contemplated
hereunder and nothing contained in this Agreement shall be construed or
interpreted otherwise and such license shall immediately terminate with
the termination of this Agreement.

8.3 In the event that the Fund, including any affiliate or agent of the
Fund or any third party acting on behalf of the Fund is provided with
direct access to the Investor Services Group System for either account
inquiry or to transmit transaction information, including but not
limited to maintenance, exchanges, purchases and redemptions, such
direct access capability shall be limited to direct entry to the
Investor Services Group System by means of on-line mainframe terminal
entry or PC emulation of such mainframe terminal entry and any other non-
conforming method of transmission of information to the Investor
Services Group System is strictly prohibited without the prior written
consent of Investor Services Group.

Article 9 Representations and Warranties.

9.1 Investor Services Group represents and warrants to the Fund that:

(a)it is a corporation duly organized, existing and in good standing
under the laws of the Commonwealth of Massachusetts;

(b)it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;

(c)all requisite corporate proceedings have been taken to authorize it
to enter into this Agreement;

(d)it is duly registered with its appropriate regulatory agency as a
transfer agent and such registration will remain in effect for the
duration of this Agreement;

(e)it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement; and

(f)all equipment and software provided or used by Investor Services
Group or any of its subsidiaries or divisions in connection with
rendering services to the Company under the terms of this Agreement,
include or shall include design and performance capabilities so that
prior to, during, and after December 31, 1999 (the "Millennium Date
Change") they will not malfunction, produce invalid or incorrect
results, cause an interruption in or diminish the quality of the
services provided to the Company, or abnormally cease to function due to
the Millennium Date Change. Such design and performance capabilities
shall include without limitation the ability to recognize and process
the Year 2000 and thereafter and to manage and manipulate data involving
dates, including without limitation, (i) single century and multi-

Page 7

century formulas and date values without resulting in the generation of
incorrect values involving such dates or causing an abnormal ending,
(ii) date data interfaces with functionalities and data fields that
indicate the century, and (iii) date-related functions that indicate the
century.

9.2 The Fund represents and warrants to Investor Services Group that:

(a)it is duly organized, existing and in good standing under the laws of
the jurisdiction in which it is organized;

(b)it is empowered under applicable laws and by its Certificate of
Formation and Limited Liability Company Agreement to enter into this
Agreement;

(c)all organizational proceedings required by said Certificate of
Formation, Limited Liability Company Agreement and applicable laws have
been taken to authorize it to enter into this Agreement;

(d)a registration statement under the Securities Act of 1933, as
amended, and the 1940 Act on behalf of each of the Portfolios is
currently effective and will remain effective, and all appropriate state
securities law filings have been made and will continue to be made, with
respect to all Membership Interests of the Fund being offered for sale;

(e)all outstanding Membership Interests are validly issued, fully paid
and non-assessable and when Membership Interests are hereafter issued in
accordance with the terms of the Fund's Certificate of Formation,
Limited Liability Company Agreement and its Prospectus and Statement of
Additional Information with respect to each Portfolio, such Membership
Interests shall be validly issued, fully paid and non-assessable; and

(f)as of the date hereof, each Portfolio is duly registered and lawfully
eligible for sale in each jurisdiction indicated for such Portfolio on
the list furnished to Investor Services Group pursuant to Article 7 of
this Agreement and that it will notify Investor Services Group
immediately of any changes to the aforementioned list.

9.3 THIS IS A SERVICE AGREEMENT. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, INVESTOR SERVICES GROUP DISCLAIMS ALL OTHER REPRESENTATIONS
OR WARRANTIES, EXPRESS OR IMPLIED, MADE TO THE FUND OR ANY OTHER PERSON,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES REGARDING QUALITY,
SUITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
OTHERWISE (IRRESPECTIVE OF ANY COURSE OF DEALING, CUSTOM OR USAGE OF
TRADE) OF ANY SERVICES OR ANY GOODS PROVIDED INCIDENTAL TO SERVICES
PROVIDED UNDER THIS AGREEMENT. INVESTOR SERVICES GROUP DISCLAIMS ANY
WARRANTY OF TITLE OR NON-INFRINGEMENT EXCEPT AS OTHERWISE SET FORTH IN
THIS AGREEMENT.

Article 10 Indemnification.

Page 8

10.1 Investor Services Group shall not be responsible for and the Fund on
behalf of each Portfolio shall indemnify and hold Investor Services
Group harmless from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses, damages, charges,
payments and liabilities of any sort or kind which may be asserted
against Investor Services Group or for which Investor Services Group may
be held to be liable (a "Claim") arising out of or attributable to any
of the following:

(a)any actions of Investor Services Group required to be taken pursuant
to this Agreement unless such Claim resulted from a negligent act or
omission to act, willful misfeasance or bad faith by Investor Services
Group in the performance of its duties hereunder;

(b)Investor Services Group's reasonable reliance on, or reasonable use
of information, data, records and documents (including but not limited
to magnetic tapes, computer printouts, hard copies and microfilm copies)
received by Investor Services Group from the Fund, or any authorized
third party acting on behalf of the Fund, including but not limited to
the prior transfer agent for the Fund, in the performance of Investor
Services Group's duties and obligations hereunder;

(c)the reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests of the Fund on behalf
of the applicable Portfolio;

(d)the offer or sales of Membership Interests in violation of any
requirement under the securities laws or regulations of any state that
such Membership Interests be registered in such state or in violation of
any stop order or other determination or ruling by any state with
respect to the offer or sale of such Membership Interests in such state;
and

(e)the Fund's refusal or failure to comply with the terms of this
Agreement, or any Claim which arises out of the Fund's negligence or
misconduct or the breach of any representation or warranty of the Fund
made herein.

10.2 The Fund, Nike Securities L.P. and First Trust Advisors L.P., their
officers, employees, directors, partners, trustees, Members and agents
shall not be liable for, and Investor Services Group shall indemnify and
hold the Fund harmless from and against any and all claims, made by
third parties, including costs, expenses (including reasonable
attorneys' fees), losses, damages, charges, payments and liabilities of
any sort or kind (a "Claim"), which result from a negligent act or
omission to act, willful misfeasance or bad faith by Investor Services
Group in the performance of its duties hereunder.

10.3 In any case in which one party (the "Indemnifying Party") may be
asked to indemnify or hold the other party (the "Indemnified Party")

Page 9

harmless, the Indemnified Party will notify the Indemnifying Party
promptly after identifying any situation which it believes presents or
appears likely to present a claim for indemnification against the
Indemnifying Party although the failure to do so shall not prevent
recovery by the Indemnified Party and shall keep the Indemnifying Party
advised with respect to all developments concerning such situation. The
Indemnifying Party shall have the option to defend the Indemnified Party
against any Claim which may be the subject of this indemnification, and,
in the event that the Indemnifying Party so elects, such defense shall
be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying
Party shall take over complete defense of the Claim and the Indemnified
Party shall sustain no further legal or other expenses in respect of
such Claim. The Indemnified Party will not confess any Claim or make
any compromise in any case in which the Indemnifying Party will be asked
to provide indemnification, except with the Indemnifying Party's prior
written consent. The obligations of the parties hereto under this
Article 10 shall survive the termination of this Agreement.

10.4 Any claim for indemnification under this Agreement must be made
prior to one year after the Indemnified Party becomes aware of the event
for which indemnification is claimed.

10.5 Except for remedies that cannot be waived as a matter of law (and
injunctive or provisional relief), the provisions of this Article 10
shall be each party's sole and exclusive remedy for claims or other
actions or proceedings to which the other party's indemnification
obligations pursuant to this Article 10 may apply.

Article 11 Standard of Care.

11.1 Investor Services Group shall at all times act in good faith and
agrees to use its best efforts within commercially reasonable limits to
ensure the accuracy of all services performed under this Agreement, but
assumes no responsibility for loss or damage to the Fund unless said
errors are caused by Investor Services Group's own negligence, bad faith
or willful misconduct or that of its employees or agents.

11.2 Each party shall have the duty to mitigate damages for which the
other party may become responsible.

Article 12 Consequential Damages.

NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL INVESTOR SERVICES GROUP, ITS AFFILIATES OR ANY OF ITS OR THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE UNDER
ANY THEORY OF TORT, CONTRACT, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL
DAMAGES, EACH OF WHICH IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES
REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE OR WHETHER EITHER
PARTY OR ANY ENTITY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

Article 13 Term and Termination.

Page 10

13.1 This Agreement shall be effective on the date first written above
and shall continue for a period of five (5) years (the "Initial Term").

13.2 Upon the expiration of the Initial Term, this Agreement shall
automatically renew for successive terms of three (3) years ("Renewal
Terms") each, unless the Fund or Investor Services Group provides
written notice to the other of its intent not to renew. Such notice
must be received not less than ninety (90) days prior to the expiration
of the Initial Term or the then current Renewal Term. After th3e
Initial Term, this Agreement may be terminated by either party upon
ninety days prior written notice.

13.3 In the event a termination notice is given by the Fund, all
reasonable expenses associated with movement of records and materials
and conversion thereof to a successor transfer agent will be borne by
the Fund.

13.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party
(the "Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have been
remedied within thirty (30) days after such written notice is given,
then the Non-Defaulting Party may terminate this Agreement by giving
thirty (30) days written notice of such termination to the Defaulting
Party. If Investor Services Group is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other
rights or remedies of Investor Services Group with respect to services
performed prior to such termination of rights of Investor Services Group
to be reimbursed for reasonable out-of-pocket expenses. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by
the Non-Defaulting Party of any other rights it might have under this
Agreement or otherwise against the Defaulting Party.

13.5 Notwithstanding anything contained in this Agreement to the
contrary, should the Fund desire to move any of the services provided by
Investor Services Group hereunder to a successor service provider prior
to the expiration of the then current Initial or Renewal Term, or should
the Fund or any of its affiliates take any action which would result in
Investor Services Group ceasing to provide transfer agency,
administration or fund accounting services to the Fund prior to the
expiration of the Initial or any Renewal Term, Investor Services Group
shall make a good faith effort to facilitate the conversion on such
prior date, however, there can be no guarantee that Investor Services
Group will be able to facilitate a conversion of services on such prior
date. In connection with the foregoing, should services be converted to
a successor service provider or should the Fund or any of its affiliates
take any action which would result in Investor Services Group ceasing to
provide transfer agency, administration or fund accounting services to
the Fund prior to the expiration of the Initial or any Renewal Term
other than by reason of a default by Investor Services Group of any
material provision of this Agreement, the payment of fees to Investor
Services Group as set forth herein shall be calculated and paid as if
the services had remained with Investor Services Group until the
expiration of the then current Initial or Renewal Term and calculated at
the asset and/or Member account levels, as the case may be, until such
expiration.

Page 11

Article 14 Additional Portfolios

14.1 In the event that the Fund establishes one or more Portfolios in
addition to those identified in Schedule A, with respect to which the
Fund desires to have Investor Services Group render services as transfer
agent under the terms hereof, the Fund shall so notify Investor Services
Group in writing, and Exhibit 1 shall be amended to include such
additional Portfolios.

Article 15 Confidentiality.

15.1 The parties agree that the Proprietary Information (defined below)
(collectively "Confidential Information") are confidential information
of the parties and their respective licensors. The Fund and Investor
Services Group shall exercise at least the same degree of care, but not
less than reasonable care, to safeguard the confidentiality of the
Confidential Information of the other as it would exercise to protect
its own confidential information of a similar nature. The Fund and
Investor Services Group shall not duplicate, sell or disclose to others
the Confidential Information of the other, in whole or in part, without
the prior written permission of the other party. The Fund and Investor
Services Group may, however, disclose Confidential Information to their
respective parent corporation, their respective affiliates, their
subsidiaries and affiliated companies and employees, provided that each
shall use reasonable efforts to ensure that the Confidential Information
is not duplicated or disclosed in breach of this Agreement and such
Confidential Information may be disclosed if required by applicable law,
court order or regulation. The Fund and Investor Services Group may
also disclose the Confidential Information to independent contractors,
auditors, and professional advisors, provided they first agree in
writing to be bound by the confidentiality obligations substantially
similar to this Section 15.1. Notwithstanding the previous sentence, in
no event shall either the Fund or Investor Services Group disclose the
Confidential Information to any competitor of the other without
specific, prior written consent.

15.2 Proprietary Information means:

(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, finance,
operations, customer relationships, customer profiles, sales estimates,
business plans, and internal performance results relating to the past,
present or future business activities of the Fund or Investor Services
Group, their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them;

(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 Investor Services
Group a competitive advantage over its competitors; and

(c)all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow

Page 12

charts, databases, inventions, know-how, show-how and trade secrets,
whether or not patentable or copyrightable.

15.3 Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory notebooks,
drawings, diagrams, specifications, bills of material, equipment,
prototypes and models, and any other tangible manifestation of the
foregoing of either party which now exist or come into the control or
possession of the other.

15.4 The obligations of confidentiality and restriction on use herein
shall not apply to any Confidential Information that a party proves:

(a)Was in the public domain prior to the date of this Agreement or
subsequently came into the public domain through no fault of such party;
or

(b)Was lawfully received by the party from a third party free of any
obligation of confidence to such third party; or

(c)Was already in the possession of the party prior to receipt thereof,
directly or indirectly, from the other party; or

(d)Is required to be disclosed in a judicial or administrative
proceeding after all reasonable legal remedies for maintaining such
information in confidence have been exhausted including, but not limited
to, giving the other party as much advance notice of the possibility of
such disclosure as practical so the other party may attempt to stop such
disclosure or obtain a protective order concerning such disclosure; or

(f)Is subsequently and independently developed by employees, consultants
or agents of the party without reference to the Confidential Information
disclosed under this Agreement.

Article 16 Force Majeure; Excused Non-Performance.

No party shall be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default
or delay is caused, directly or indirectly, by (i) fire, flood, elements
of nature or other acts of God; (ii) any outbreak or escalation of
hostilities, war, riots or civil disorders in any country, (iii) any act
or omission of the other party or any governmental authority; (iv) any
labor disputes (whether or not the employees' demands are reasonable or
within the party's power to satisfy); or (v) nonperformance by a third
party or any similar cause beyond the reasonable control of such party,
including without limitation, failures or fluctuations in
telecommunications or other equipment. In addition, no party shall be
liable for any default or delay in the performance of its obligations
under this Agreement if and to the extent that such default or delay is
caused, directly or indirectly, by the actions or inactions of the other
party. In any such event, the non-performing party shall be excused
from any further performance and observance of the obligations so
affected only for as long as such circumstances prevail and such party

Page 13

continues to use commercially reasonable efforts to recommence
performance or observance as soon as practicable.

Article 17 Assignment and Subcontracting.

This Agreement, its benefits and obligations shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement may not be assigned or
otherwise transferred by either party hereto, without the prior written
consent of the other party, which consent shall not be unreasonably
withheld; provided, however, that the Agreement may be assigned to PFPC
Worldwide, Inc. or one of its affiliates, if such assignment occurs
within 360 days of the Commencement Date. Investor Services Group may,
with the prior written consent of the Fund which consent may not be
unreasonably withheld, engage subcontractors to perform any of the
obligations contained in this Agreement to be performed by Investor
Services Group.

Article 18 Notice.

Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Fund or Investor Services Group, shall be
sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to
time designate in writing.

To the Fund:
First Defined Portfolio Fund, LLC
1001 Warrenville Road
Lisle IL 60532

Attention: James A. Bowen

To Investor Services Group:

First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attention: President

with a copy to Investor Services Group's General Counsel

Article 19 Governing Law/Venue.

The laws of the State of Illinois, excluding the laws on conflicts of
laws, shall govern the interpretation, validity, and enforcement of this
agreement. All actions arising from or related to this Agreement shall
be brought in the state and federal courts sitting in the City of
Boston, and Investor Services Group and the Fund hereby submit
themselves to the exclusive jurisdiction of those courts.

Page 14

Article 20 Counterparts.

This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.

Article 21 Captions.

The captions of this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.

Article 22 Publicity.

Neither Investor Services Group nor the Fund shall release or publish
news releases, public announcements, advertising or other publicity
relating to this Agreement or to the transactions contemplated by it
without the prior review and written approval of the other party;
provided, however, that either party may make such disclosures as are
required by legal, accounting or regulatory requirements after making
reasonable efforts in the circumstances to consult in advance with the
other party.

Article 23 Relationship of Parties/Non-Solicitation.

23.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be
interpreted or construed otherwise.

23.2 During the term of this Agreement and for one (1) year afterward,
the Fund shall not recruit, solicit, employ or engage, for the Fund or
others, Investor Services Group's employees.

Article 24 Entire Agreement; Severability.

24.1 This Agreement, including Schedules, Addenda, and Exhibits hereto,
constitutes the entire Agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous
proposals, agreements, contracts, representations, and understandings,
whether written or oral, between the parties with respect to the subject
matter hereof. No change, termination, modification, or waiver of any
term or condition of the Agreement shall be valid unless in writing
signed by each party. No such writing shall be effective as against
Investor Services Group unless said writing is executed by a Senior Vice
President, Executive Vice President, or President of Investor Services
Group. A party's waiver of a breach of any term or condition in the
Agreement shall not be deemed a waiver of any subsequent breach of the
same or another term or condition.

24.2 The parties intend every provision of this Agreement to be
severable. If a court of competent jurisdiction determines that any
term or provision is illegal or invalid for any reason, the illegality
or invalidity shall not affect the validity of the remainder of this
Agreement. In such case, the parties shall in good faith modify or

Page 15

substitute such provision consistent with the original intent of the
parties. Without limiting the generality of this paragraph, if a court
determines that any remedy stated in this Agreement has failed of its
essential purpose, then all other provisions of this Agreement,
including the limitations on liability and exclusion of damages, shall
remain fully effective.

Article 25 Miscellaneous.

The Fund and Investor Services Group agree that the obligations of the
Fund under the Agreement shall not be binding upon any of the Board
Members, Members, nominees, officers, employees or agents, whether past,
present or future, of the Fund individually, but are binding only upon
the assets and property of the Fund (or applicable series thereof), as
provided in the Certificate of Formation and Limited Liability Company
Agreement. The execution and delivery of this Agreement have been
authorized by the Board Members of the Fund, and signed by an authorized
officer of the Fund, acting as such, and neither such authorization by
such Board Members nor such execution and delivery by such officer shall
be deemed to have been made by any of them or any Member of the Fund
individually or to impose any liability on any of them or any Member of
the Fund personally, but shall bind only the assets and property of the
Fund (or applicable series thereof), as provided in the Articles of
Incorporation, Certificate of Formation and or Operating Limited
Liability Company Agreement.

Page 16

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first
above written.

First Defined Portfolio Fund, LLC

By:
James A. Bowen

Title: President

FIRST DATA INVESTOR SERVICES GROUP, INC.

By:
Kenneth J Kempf

Title: Senior Vice President

Page 17

SCHEDULE A

LIST OF PORTFOLIOS

The Dow(sm) Target 5 Portfolio
The Dow(sm) Target DART 10 Portfolio
Global Target 15 Portfolio
S&P Target 10 Portfolio
NASDAQ Target 15 Portfolio
Target Small Cap Portfolio
First Trust 10 Uncommon Values Portfolio
First Trust Energy Sector Portfolio
First Trust Financial Services Sector Portfolio
First Trust Pharmaceutical /Healthcare Sector Portfolio
First Trust Technology Sector Portfolio
First Trust Internet Sector Portfolio

Page 18

SCHEDULE B

DUTIES OF INVESTOR SERVICES GROUP

I. TRANSFER AGENCY SERVICES

(a)Member Information.Investor Services Group shall maintain a record of
the number of Membership Interests held by each Member of record which
shall include name, address, taxpayer identification and which shall
indicate whether such Membership Interests are held in certificates or
uncertificated form.

(b)Member Services.Investor Services Group shall respond as appropriate
to all inquiries and communications from Members relating to Member
accounts with respect to its duties hereunder and as may be from time to
time mutually agreed upon between Investor Services Group and the Fund.

(c)Membership Interest Certificates.

- - At the expense of the Fund, the Fund shall supply Investor Services
Group with an adequate supply of blank share certificates to meet
Investor Services Group requirements therefor. Such Membership Interest
certificates shall be properly signed by facsimile. The Fund agrees
that, notwithstanding the death, resignation, or removal of any officer
of the Fund whose signature appears on such certificates, Investor
Services Group or its agent may continue to countersign certificates
which bear such signatures until otherwise directed by Written
Instructions.

- - Investor Services Group shall issue replacement Membership Interest
certificates in lieu of certificates which have been lost, stolen or
destroyed, upon receipt by Investor Services Group of properly executed
affidavits and lost certificate bonds, in form satisfactory to Investor
Services Group, with the Fund and Investor Services Group as obligees
under the bond.

- - Investor Services Group shall also maintain a record of each
certificate issued, the number of Membership Interests represented
thereby and the Member of record. With respect to Membership Interests
held in open accounts or uncertificated form (i.e., no certificate being
issued with respect thereto) Investor Services Group shall maintain
comparable records of the Members thereof, including their names,
addresses and taxpayer identification. Investor Services Group shall
further maintain a stop transfer record on lost and/or replaced
certificates.

(d)Mailing Communications to Members; Proxy Materials. Investor
Services Group will address and mail to Members of the Fund, all reports
to Members, dividend and distribution notices and proxy material for the
Fund's meetings of Members. In connection with meetings of Members,
Investor Services Group will prepare Member lists, mail and certify as
to the mailing of proxy materials, process and tabulate returned proxy
cards, report on proxies voted prior to meetings, act as inspector of
election at meetings and certify Membership Interests voted at meetings.

(e)Sales of Membership Interests.

- - Investor Services Group shall not be required to issue any Membership
Interests of the Fund where it has received a Written Instruction from
the Fund or official notice from any appropriate authority that the sale
of the Membership Interests of the Fund has been suspended or
discontinued. The existence of such Written Instructions or such
official notice shall be conclusive evidence of the right of Investor
Services Group to rely on such Written Instructions or official notice.

- - In the event that any check or other order for the payment of money is
returned unpaid for any reason, Investor Services Group will endeavor
to: (i) give prompt notice of such return to the Fund or its designee;

Page 19

(ii) place a stop transfer order against all Membership Interests issued
as a result of such check or order; and (iii) take such actions as
Investor Services Group may from time to time deem appropriate.

(f)Transfer and Repurchase.

- - Investor Services Group shall process all requests to transfer or
redeem Membership Interests in accordance with the transfer or
repurchase procedures set forth in the Fund's Prospectus.

- - Investor Services Group will transfer or repurchase Membership
Interests upon receipt of Oral or Written Instructions or otherwise
pursuant to the Prospectus and Membership Interest certificates, if any,
properly endorsed for transfer or redemption, accompanied by such
documents as Investor Services Group reasonably may deem necessary.

- - Investor Services Group reserves the right to refuse to transfer or
repurchase Membership Interests until it is satisfied that the
endorsement on the instructions is valid and genuine. Investor Services
Group also reserves the right to refuse to transfer or repurchase
Membership Interests until it is satisfied that the requested transfer
or repurchase is legally authorized, and it shall incur no liability for
the refusal, in good faith, to make transfers or repurchases which
Investor Services Group, in its good judgement, deems improper or
unauthorized, or until it is reasonably satisfied that there is no basis
to any claims adverse to such transfer or repurchase.

- - When Membership Interests are redeemed, Investor Services Group shall,
upon receipt of the instructions and documents in proper form, deliver
to the Custodian and the Fund or its designee a notification setting
forth the number of Membership Interests to be repurchased. Such
repurchased Membership Interests shall be reflected on appropriate
accounts maintained by Investor Services Group reflecting outstanding
Membership Interests of the Fund and Membership Interests attributed to
individual accounts.

- - Investor Services Group shall upon receipt of the monies provided to
it by the Custodian for the repurchase of Membership Interests, pay such
monies as are received from the Custodian, all in accordance with the
procedures described in the written instruction received by Investor
Services Group from the Fund.

- - Investor Services Group shall not process or effect any repurchase
with respect to Membership Interests of the Fund after receipt by
Investor Services Group or its agent of notification of the suspension
of the determination of the net asset value of the Fund.

(g)Dividends.

- - Upon the declaration of each dividend and each capital gains
distribution by the Board of Trustees of the Fund with respect to
Membership Interests of the Fund, the Fund shall furnish or cause to be
furnished to Investor Services Group Written Instructions setting forth
the date of the declaration of such dividend or distribution, the ex-
dividend date, the date of payment thereof, the record date as of which
Members entitled to payment shall be determined, the amount payable per
Membership Interest to the Members of record as of that date, the total
amount payable on the payment date and whether such dividend or
distribution is to be paid in Membership Interests at net asset value.

- - On or before the payment date specified in such resolution of the
Board of Trustees, the Fund will provide Investor Services Group with
sufficient cash to make payment to the Members of record as of such
payment date.

- - If Investor Services Group does not receive sufficient cash from the
Fund to make total dividend and/or distribution payments to all Members
of the Fund as of the record date, Investor Services Group will, upon
notifying the Fund, withhold payment to all Members of record as of the
record date until sufficient cash is provided to Investor Services Group.

(i) Cash Management Services.

Page 20

(a)Investor Services Group shall establish demand deposit accounts
(DDA's) with a cash management provider to facilitate the receipt of
purchase payments and the processing of other Member-related
transactions. Investor Services Group shall retain any excess balance
credits earned with respect to the amounts in such DDA's ("Balance
Credits") after such Balance Credits are first used to offset any
banking service fees charged in connection with banking services
provided on behalf of the Fund. Balance Credits will be calculated and
applied toward the Fund's banking service charges regardless of the
withdrawal of DDA balances described in Section (b) below.

(b)DDA balances which cannot be forwarded on the day of receipt may be
withdrawn on a daily basis and invested in U.S. Treasury and Federal
Agency obligations, money market mutual funds, repurchase agreements,
money market preferred securities (rated A or better), commercial paper
(rated A1 or P1), corporate notes/bonds (rated A or better) and/or
Eurodollar time deposits (issued by banks rated A or better). Investor
Services Group bears the risk of loss on any such investment and shall
retain any earnings generated thereby. Other similarly rated investment
vehicles may be used, provided however, Investor Services Group shall
first notify the Fund of any such change.

(c)Investor Services Group may facilitate the payment of distributions
from the Fund which are made by check ("Distributions") through the "IPS
Official Check" program. "IPS Official Check" is a product and service
provided by Investor Services Group's affiliate, Integrated Payment
Systems ("IPS"). IPS is licensed and regulated as an "issuer of payment
instruments". In the event the IPS Official Check program is utilized,
funds used to cover such Distributions shall be forwarded to and held by
IPS. IPS may invest such funds while awaiting presentment of items for
payment. In return the services provided by IPS, IPS imposes a per item
charge which is identified in the Schedule of Out-of-Pocket Expenses
attached hereto and shall retain, and share with Investor Services
Group, the benefit of the revenue generated from its investment
practices.

(j)Lost Members.Investor Services Group shall perform such services as
are required in order to comply with Rules 17a-24 and 17Ad-17 of the 34
Act (the Lost Member Rules"), including, but not limited to those set
forth below. Investor Services Group may, in its sole discretion, use
the services of a third party to perform the some or all such services.

- - documentation of electronic search policies and procedures;
- - execution of required searches;
- - creation and mailing of confirmation letters;
- - taking receipt of returned verification forms;
- - providing confirmed address corrections in batch via electronic media;;
- - tracking results and maintaining data sufficient to comply with the
Lost Member Rules; and
- - preparation and submission of data required under the Lost Member Rules.

II. ADMINISTRATION SERVICES

Regulatory Compliance

A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. investment advisory contracts
b. fidelity bond
c. underwriting contracts
d. administration contracts
e. accounting contracts
f. custody administration contracts
g. transfer agent and shareholder services
h. 12b-1 plan
2. Filings

Page 21

a. N-SAR (semi-annual report)
b. N-1A (prospectus), post-effective amendments and
supplements ("stickers")
c. filing fidelity bond under 17g-1
d. filing Member reports under Rule 30b2-1
3. Annual up-dates of biographical information
and questionnaires for Trustees and Officers

Corporate Business and Member/Public Information

A. Trustees/Management
1. Preparation of meetings
a. agendas - all necessary items of compliance
b. arrange and conduct meetings
c. prepare minutes of meetings
d. keep attendance records
e. maintain corporate records/minute book
B. Coordinate Proposals
1. Auditors
2. Insurance
C. Maintain Corporate Calendars and Files
D. Release Corporate Information
1. To Members
2. To financial and general press
3. To industry publications upon approval of the Fund
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. Fund performance
4. Respond to:
a. financial press
b. miscellaneous Members inquiries
c. industry questionnaires
E. Communications to Members
1. Coordinate printing and distribution of annual, semi-annual reports

Financial and Management Reporting

A. Income and Expenses
1. Monitoring of expense accruals, budgets, expense payments and expense
caps
2. Approve and coordinate payment of expenses
3. Establish Funds' operating expense checking account and perform
monthly reconciliation of checking account
4. Calculation of advisory fee and reimbursements to Fund, (if applicable)
5. Authorize the recording and amortization of organizational costs and
pre-paid expenses (supplied by Advisor), for start-up funds and
reorganizations
6. Calculation of average net assets

Page 22

7. Expense ratios calculated
B. Distributions to Members
1. Calculations of dividends and capital gain distributions (in
conjunction with the Fund and their auditors)
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940
2. Book/Tax identification and adjustments at required distribution
periods (in conjunction with the Funds' auditors)
C. Financial Reporting
1. Liaison between Fund management, independent auditors and printers for
semi-annual and annual Member reports
2. Preparation of semi-annual and annual reports to Members
3. Preparation of semi-annual and annual NSAR's (Financial Data)
4. Preparation of Financial Statements for required SEC Post Effective
filings (if applicable)
5. Preparation of required performance graph (annually) (based on Advisor
supplied indices)
D. Other Financial Analyses
1. Upon request from Fund management, other budgeting and analyses can be
constructed to meet a Fund's specific needs (additional fees may apply)
2. Sales information, portfolio turnover (monthly)
3. Work closely with independent auditors on tax reporting schedules
prepared by Investor Services Group on return of capital presentation,
excise tax calculation
4. Performance (total return) calculation (monthly)
5. 1099 Miscellaneous - prepared and filed for Directors/Trustees (annual)
6. Analysis of interest derived from various Government obligations
(annual) (if interest income was distributed in a calendar year)
7. Analysis of interest derived, by state, for municipal bonds
8. Review and characterize 1099-Dividend Forms
9. Prepare and coordinate with printer the printing and mailing of 1099-
Dividend Insert Cards
E. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper update
2. Perform various reviews to ensure accuracy of Accounting (the monthly
expense analysis) and Custody (review of daily bank statements to ensure
accurate expense money movement for expense payments)
3. Review accruals, budgets and expenditures (where applicable)
4. 817(h) compliance
G. Preparation and distribution of monthly operational reports to
management by 10th business day

Page 23

1. Management Statistics (Recap)
a. portfolio summary
b. book gains/losses/per Membership Interest
c. net income, book income/per Membership Interest
d. capital stock activity
e. distributions
2. Performance Analysis (faxed to Fund 1st workday of month)
a. total return
b. monthly, quarterly, year to date, average annual
3. Expense Analysis
a. schedule
b. summary of due to/from advisor
c. expenses paid
d. expense cap
e. accrual monitoring
f. advisory fee
4. Portfolio Turnover
a. market value
b. cost of purchases
c. net proceeds of sales
d. average market value
5. Activity Summary
a. Membership Interests sold, redeemed and reinvested
b. change in investment

H. Provide rating agencies statistical data as requested (monthly/quarterly)

I. Standard schedules for Board Package (Quarterly)
1. Activity Summary (III-G-7 from above)
2. Expense analysis
3. Other schedules can be provided (additional fees may apply)

Special Issues Related to Foreign Securities

A. Financial Reporting
1. Review and provide reports on the treatment of currency gain/loss and
capital gain/loss in conjunction with the Funds' Independent Auditors
a. Section 988 transactions
b. Section 1256 contracts
c. Section 1092 deferrals
2. Tax Reporting (depending on the level of assistance required by the
Funds' independent auditors, additional fees may apply)
a. Analyze tax treatment of foreign investments based on the Fund's
elections and their impact on:
1. 817(h)
2. Taxable income and capital gains
3. Prepare excise tax worksheets
b. Calculate distributions to Members
1. Monitor character and impact of realized currency gain/loss on
distribution amount
3. Assist the Advisor and work with the Independent Auditors in
identification of PFIC's (by providing a list of potential PFIC's that
the fund may be holding).

Page 24

III.FUND ACCOUNTING SERVICES

Daily Accounting Services

1) Calculate Net Asset Value ("NAV"):

- - Update the daily market value of securities held by the Fund using
Investor Services Group's standard agents for pricing equity, bond and
foreign securities as approved by the Board of Trustees.

- - Enter limited number of manual prices supplied by First Trust Advisors
and/or broker.

- - Prepare NAV proof sheet. Review components of change in NAV for
reasonableness.

- - Review variance reporting on-line and in hard copy for price changes
in individual securities using variance levels established by First
Trust Advisors. Verify U.S. dollar security prices exceeding variance
levels by notifying First Trust Advisors and pricing sources of noted
variances.

- - Complete daily variance analysis on foreign exchange rates and local
foreign prices. Notification of changes exceeding established levels
for First Trust Advisors verification. (First Trust Advisors should
establish tolerance levels for each country/currency so that local price
changes and foreign exchange rate changes exceeding this tolerance are
identified and NAV problems minimized).

- - Review for ex-dividend items indicated by pricing sources; trace to
Fund's general ledger for agreement.

- - Communicate pricing information (NAV) to First Trust Advisors, Fund's
Transfer Agent and, electronically, to NASDAQ.

2)Determine and Report Cash Availability to First Trust Advisors by
approximately 9:30 a.m. Eastern Time:

- - Receive daily cash and transaction statements from the Custodian by
8:30 a.m. Eastern time.

- - Receive previous day Member activity reports from the Transfer Agent
by 8:30 a.m. Eastern time.

- - Fax hard copy cash availability calculations with all details to First
Trust Advisors.

- - Supply First Trust Advisors with 3-day cash projection report.

- - Prepare daily bank cash reconciliations. Notify the Custodian and
First Trust Advisors of any reconciling items.

- - For Money Market Funds, the Fund's Transfer Agent will also supply
First Trust Advisors with receipt of timely cash information.

3)Reconcile and Record All Daily Expense Accruals:

- - Accrue expenses based on budget supplied by First Trust Advisors
either as percentage of net assets or specific dollar amounts.

- - If applicable, monitor expense limitations established by First Trust
Advisors.

- - If applicable, accrue daily amortization of organizational expense.

- - If applicable, complete daily accrual of 12b-1 expenses.

4)Verify and Record All Daily Income Accruals for Debt Issues:

Page 25

- - Review and verify all system generated Interest and Amortization
reports.

- - Establish unique security codes for bond issues to permit segregated
trial balance income reporting.

5)Monitor Securities Held for Cash Dividends, Corporate Actions and
Capital Changes such as splits, mergers, spinoffs, etc. and process
appropriately.

- - Monitor electronically received information from pricing vendors for
securities held in the Fund.

- - Review current daily security trades for dividend activity.

- - Monitor collection and postings of corporate actions, dividends and
interest.

- - Process international dividend and capital change information received
from the Custodian and Advisor.

- - Provide mark-to-market analysis for currency exchange rate
fluctuations on unsettled dividends and interest.

6)Enter All Security Trades on Accounting System based on written
instructions from the Fund's Advisor.

- - Review system verification of trade and interest calculations.

- - Verify settlement through statements supplied by the Custodian.

- - Maintain security ledger transaction reporting.

- - Maintain tax lot holdings.

- - Determine realized gains or losses on security trades.

- - Provide broker commission reporting.

- - Provide foreign currency exchange rate realized and unrealized
gains/losses detail.

7)Enter All Fund Membership Interest Transactions on Accounting System:

- - Process activity identified on reports supplied by the Transfer Agent.

- - Verify settlement through statements supplied by the Custodian.

- - Reconcile to the Investor Services Group's Transfer Agent report
balances.

8)Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance
(listing all asset, liability, equity, income and expense accounts).

- - Post manual entries to the general ledger.

- - Post Custodian activity.

- - Post security transactions.

- - Post and verify system generated activity, i.e. income and expense
accruals.

- - Segregate foreign tax expense.

- - Prepare general ledger net cash proof used in NAV calculation.

- - Prepare daily mark-to-market analysis for all unrealized foreign
currency exchange rate gains/losses by asset/liability category.

9)Review and Reconcile with Custodian Statements:

- - Verify all posted interest, dividends, expenses and Member and
security payments/receipts, etc. (Discrepancies will be reported to the
Custodian).

- - Post all cash settlement activity to the trial balance.

- - Reconcile to ending cash balance accounts.

- - Clear subsidiary reports with settled amounts.

Page 26

- - Track status of past due items and failed trades as reported by the
Custodian.

10)Submission of Daily Accounting Reports to First Trust Advisors:
(Additional reports readily available)

- - Trial Balance.

- - Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of portfolio
comprised of each security).

- - NAV Calculation Report.

- - Cash Availability.

- - 3-day Cash Projection Report.

Monthly Accounting Services

1)Full Financial Statement Preparation (automated Statements of Assets
and Liabilities, of Operations and of Changes in Net Assets) and
submission to First Trust Advisors by 10th business day.

2)Submission of Monthly Automated Accounting Reports to First Trust
Advisors:

- - Security Purchase/Sales Journal.
- - Interest and Maturity Report.
- - Brokers Ledger (Commission Report).
- - Security Ledger Transaction Report with Realized Gains/Losses.
- - Security Ledger Tax Lot Holdings Report.
- - Additional reports available upon request.

3)Submit Reconciliation of Accounting Asset Listing to Custodian Asset
Listing:

- - Report any security balance discrepancies to the Custodian/First Trust
Advisors.

4)Provide Monthly Analysis and Reconciliation of Additional Trial
Balance Accounts, such as:

- - Security cost and realized gains/losses.
- - Interest/dividend receivable and income.
- - Payable/receivable for securities purchased and sold.
- - Payable/receivable for fund Membership Interests; issued and redeemed.
- - Expense payments and accruals analysis.
- - Unrealized and realized currency gains/losses.

5)If Appropriate, Prepare and Submit to First Trust Advisors
(additional fees may apply):

- - Income by state reporting.
- - Standard Industry Code Valuation Report.
- - Alternative Minimum Tax Income segregation schedule.
- - SEC yield reporting (non-money market funds with domestic and ADR
securities only).

Annual (and Semi-Annual) Accounting Services

1) Annually assist and supply Fund's auditors with schedules supporting
securities and Member transactions, income and expense accruals, etc.
during the year in accordance with standard audit assistance requirements.

2)Provide N-SAR Reporting (Accounting Questions) on a Semi-Annual Basis:

Page 27

If applicable, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62, 63,
64B, 71, 72, 73, 74, 75 and 76

NOTE:All N-SAR questions are completed by Investor Services Group when
Investor Services Group's Administration Group is retained.

Performing fund accounting and bookkeeping services (including the
maintenance of such accounts, books and records of the Fund as may be
required by Section 31(a) of the 1940 Act) as follows:

IV.CUSTODY ADMINISTRATION SERVICES

Custody services to be provided include:

- - Assign a Custody Administrator to accept, control and process daily
portfolio transactions through on-line real time link with Custodian
Banks and provide centralized point of contact for inquiries on
portfolio related items.

- - Provide clients with established procedures, controls and a
communication network already in place with the Custodian Banks and
other operational areas, both internal and external.

- - Custody Administration provides a comprehensive program that audits
transactions, monitors and evaluates the Custodian performance and
recommends changes that strenghten a service or improve controls on Fund
cash and asset movements.

- - Generate various Domestic and Global reports daily, i.e. Cash Reports,
Pending/Fail Reports, Account Transaction Detail from Custodian Banks
and distribute to Fund Accounting Unit and client by 8:30 AM.

- - Monitor and review prior day Custodian cash balances daily. Identify
any overdrafts and their reason by 9:30 AM and document.

- - Communicate and coordinate portfolio trades from client to Fund
Accounting for booking within proper time frames. Provide trade
authorization to Fund Accounting on all security trades placed by the
Funds no later than 12:30 PM Eastern time on settlement\value date for
Short Term Money Market securities issues (assuming that trade date
equals settlement date) and by 11:00 AM Eastern time on trade date plus
one for non-Money Market securities.

- - Maintain client specific trade-control cover sheets to ensure all
trades received.

- - Input and affirm Domestic and Global trades into the Custodian Bank
system within the proper guidelines and time limits.

- - Review clients authorizations and match with DTC ID's for correctness
and affirmation and resolve differences with client. All trade
revisions must be communicated to Fund Accounting ASAP.

Page 28

- - Communicate and process Global trades and FCC's from client with
Custodian Bank and communicate to Fund Accounting by stated deadlines.
Provide FX price. Follow-up with Fund Accounting and Custodian on tax
reclaims. Match Global confirmations with client authorizations and
review for correctness.

- - Maintain and review all trades for client specific authorized
signatures.

- - Communicate Corporate Actions, capital changes and interest rate
changes received from Custodian Bank to Fund Accounting and client.
Follow-up with client, Fund Accounting and Custodian to make sure all
necessary actions and/or paperwork are completed.

- - Handle the differences and inquiries between Custodian Bank, Broker,
Fund Accounting and client (delivery problems, fails, dividend and
interest differences, etc.). Turnaround time required same day to 48
hours.

- - Work with Fund Accounting and Custodian on asset reconciliations to
ensure any discrepancies are resolved in a timely manner. Provide Fund
Accounting with monthly (and on request) Asset List Holdings by the 1st
or 2nd business day of the month.

- - Assist client in offering cash management trades through Custodian,
such as Commercial Paper, Repurchase Agreements, Sweep vehicles.

- - Special attention and care given to times sensitive trades, i.e. Tri-
Party Agreements, Money Market trades, Global FX trades and Corporate
Actions.

- - Arrange for special services offered by Custodian Banks, such as
securities lending, line of credit and or letter of credit, DDA
relationships, etc.

- - Supply and support Fund's auditors with all trade related and broker
confirmations to expedite Fund's annual audit.

- - Maintain monthly statement activity and asset holding reports from
Custodian Bank for use by auditors and for research.

- - Investor Services Group shall be entitled to retain any excess balance
credits or fee reductions or other concessions or benefits earned or
generated by or associated with the Fund's custodial accounts or made
available by the institution at which such accounts are maintained after
such benefits are first applied towards banking service fees charged to
the Fund by such institution.

SCHEDULE C

FEE SCHEDULE

Page 29

1. FUND ADMINISTRATION, FUND ACCOUNTING, CUSTODY ADMINISTRATION AND
TRANSFER AGENCY (1/12th payable monthly)

.0010 On the First $ 1 Billion of Average Net Assets
.0008 On the Next $ 1 Billion of Average Net Assets
.0006 Over $ 2 Billion of Average Net Assets

The above fee schedule is applicable to Total Net Assets of all
portfolios within the group. The Annual minimum fee is $600,000 for the
first 12 portfolios as described above. Additional portfolios will be
serviced for a minimum of $50,000 per portfolio.

NOTE: As the Fund will start with 12 portfolios initially, the minimum
will be reduced to $600,000 and when other portfolios are added the
minimum of $50,000 per additional portfolio will apply.

CUSTODY ADMINISTRATION FEE
$6,000 per portfolio per year

PRICING SERVICES QUOTATION FEE
Specific costs will be identified based upon options selected by the
Fund and will be billed monthly.

<TABLE>
<CAPTION>
Muller Data Interactive J.J. Kenny Co.,
Security Types Corp.* Data Inc.*
______________ ____________ ___________ ______________
<S> <C> <C> <C>
Government Bonds $ .50 $ .50 $ .25 (a)
Mortgage-Backed (evaluated, seasoned, closing) .50 .50 .25 (a)
Corporate Bonds (short and long term) .50 .50 .25 (a)
U.S. Municipal Bonds (short and long term) .55 .80 .50 (b)
CMO's/ARM's/ABS 1.00 .80 1.00 (a)
Convertible Bonds .50 .50 1.00 (a)
High Yield Bonds .50 .50 1.00 (a)
Mortgage-Backed Factors (per Issue per Month) 1.00 n/a n/a
U.S. Equities .15 .15 n/a
U.S. Options .15 .15 n/a
Domestic Dividends & Capital Changes (d) 3.50 n/a
(per Issue per Month)
Foreign Securities .50 .50 n/a
Foreign Securities Dividends & Capital Changes 2.00 4.00 n/a
(per Issue per Month)
Set-up Fees n/a n/a (e) .25 (c)
All Added Items n/a n/a .25 (c)
</TABLE>

Page 30

*Based on current Vendor costs, subject to change. Costs are quoted
based on individual security CUSIP/identifiers and are per issue per day.

(a) $35.00 per day minimum
(b) $25.00 per day minimum
(c) $1.00, if no CUSIP
(d) Interactive Data also charges monthly transmission costs and disk
storage charges.

A) Futures and Currency Forward Contracts$2.00 per Issue per Day

B) Dow Jones Markets (formerly Telerate Systems, Inc.)* (if applicable)

*Based on current vendor costs, subject to change.

Specific costs will be identified based upon options selected by the
client and will be billed monthly.

C) Reuters, Inc.*

*Based on current vendor costs, subject to change.

Specific costs will be identified based upon options selected by the
client and will be billed monthly.

D) Municipal Market Data* (if applicable)

*Based on current vendor costs, subject to change.

Specific costs will be identified based upon options selected by the
client and will be billed monthly.

2. Lost Member Search/Reporting: $2.75 per account search*

* The per account search fee shall be waived until June 2000 so long as
the Fund retains Keane Tracers, Inc. ("KTI") to provide the Fund with
KTI's "In-Depth Research Program" services.

3. Print/Mail Fees.(If needed)

(a) Standard Pricing:

Implementation Fee: $5000.00
Testing Application or Data Requirements: $3.00/fax
Work Order: $15.00 per workorder
Daily Work (Confirms):
Hand: $71/K with $75.00 minimum (includes BRE or CRE)
$0.07/each additional insert
Machine: $42/K with $50.00 minimum (includes BRE or CRE)
$0.01/each additional insert
Daily Checks*:
Hand: $91/K with $100.00 minimum daily (includes 1 insert)
$0.08/each additional insert
Machine: $52/K with $75.00 minimum (includes 1 insert)
$0.01/each additional insert

Page 31

* There is a $3.00 charge for each 3606 Form sent.

Statements:
Hand: $78/K with $75.00 minimum (includes BRE or CRE)
$0.08/each additional insert
$125/K for intelligent inserting
Machine: $52/K with $75.00 minimum (includes BRE or CRE)
$0.01 each additional insert
$58/K for intelligent inserting

Periodic Checks:
Hand: $91/K with $100.00 minimum (includes 1 insert)
$0.08/each additional insert
Machine: $52/K with $100.00 minimum (includes 1 insert)
$0.01/each additional insert

12B1/Dealer Commission Checks/Statements: $0.78/each envelope with
$100.00 minimum

Spac Reports/Group Statements: $78/K with $75.00 minimum

Listbills: $0.78 per envelope with $75.00 minimum

Printing Charges: (price ranges dependent on volumes)
$0.08/per confirm/statement/page
$0.10/per check

Folding (Machine): $18/K

Folding (Hand): $.12 each

Presort Charge: postage rate
$0.035 per piece

Courier Charge: $15.00 for each on call courier
trip/or actual cost for on
demand

Overnight Charge: $3.50 per package service
charge plus Federal Express/
Airborne charge

Inventory Storage: $20.00 for each inventory
location as of the 15th of
the month

Inventory Receipt: $20.00 for each SKU / Shipment

Hourly work; special projects, opening envelopes, etc...: $24.00 per hour

Special Pulls: $2.50 per account pull

Boxes/Envelopes: Shipping boxes $0.85 each
Oversized Envelopes $0.45 each

Forms Development/Programming Fee: $100/hr

Systems Testing: $85/hr

Cutting Charges: $10.00/K

Page 32

(b) Special Mailings:

Special mailing pricing is based on appropriate notification (standard
of 30 day notification) and scheduling for special mailings. Scheduling
requirements include having collateral arrive at agreed upon times in
advance of deadlines. Mailings which arise with shorter time frames and
turns will be billed at a premium based on turn around requirements.

Work Order: $30.00 per Workorder

Daily Work (Confirms):
Hand: $135.00 to create an admark tape
$10.00/K to zip + 4 data enhance/$125.00 minimum
$80.00/hr for any data manipulation
$10.00/K combo charge
Admark & Machine Insert
#10, #11, 6x9: $62/K to admark envelope and machine insert 1
piece/$125.00 min
$2.50/K for each additional insert
$38/K to admark only with $75.00 minimum
$25.00/K hand sort
9x12: $135/K to admark envelope and machine insert 1
piece/$125.00 min
$5.00/K for each additional insert
$38/K to admark only/$75.00 minimum
$0.08 for each hand insert
Admark & Hand Insert:
#10, #11, 6x9: $0.08 for each hand insert
$25.00/K hand sort
9x12: $0.09 for each hand insert
$35.00/K hand sort
Pressure/Sensitive Labels:
$0.32 each to create, affix and hand insert 1 piece/$75.00 minimum
$0.08 for each hand insert
$0.10 to affix labels only
$0.10 to create labels only

Legal Drop: $150.00 / compliant legal drop per job and processing fees

Create Mailing List: $0.40 per entry with $75.00 minimum

Presort Fee: $0.035 per piece

4.Investor Services Group shall be entitled to the following fee for the
performance of any Special Legal Services as described in Schedule B in
accordance with the Written Instructions of the Fund: $185 per hour
subject to certain project caps as may be agreed to by Investor Services
Group and the Fund. Services and charges may vary based on volume.

5.Miscellaneous Charges. The Fund shall be charged for the following
products and services as applicable:

- - Ad hoc reports
- - Ad hoc SQL time

Page 33

- - COLD Storage
- - Digital Recording
- - Banking Services, including incoming and outgoing wire charges
- - Microfiche/microfilm production
- - Magnetic media tapes and freight
- - Manual Pricing
- - Materials for Rule 15c-3 Presentations
- - Pre-Printed Stock, including business forms, certificates, envelopes,
checks and stationary

6.Fee Adjustments. After the one year anniversary of the effective
date of this Agreement, Investor Services Group may adjust the fees
described in the above sections once per calendar year, upon thirty (30)
days prior written notice in an amount not to exceed the cumulative
percentage increase in the Consumer Price Index for All Urban Consumers
(CPI-U) U.S. City Average, All items (unadjusted) - (1982-84=100),
published by the U.S. Department of Labor since the last such adjustment
in the Client's monthly fees (or the Effective Date absent a prior such
adjustment).

7.Programming Costs.The following programming rates are subject to an
annual 5% increase after the one year anniversary of the effective date
of this Agreement.

(a) Dedicated Team: Programmer: $100,000 per annum
BSA: $ 85,000 per annum
Tester: $ 65,000 per annum
(b) System Enhancements (Non Dedicated Team): $150.00 per/hr per programmer

Page 34

SCHEDULE D

OUT-OF-POCKET EXPENSES

The Fund shall reimburse Investor Services Group monthly for applicable
out-of-pocket expenses, including, but not limited to the following items:

- - Postage - direct pass through to the Fund
- - Telephone and telecommunication costs, including all lease,
maintenance and line costs
- - Proxy solicitations, mailings and tabulations
- - Shipping, Certified and Overnight mail and insurance
- - Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- - Duplicating services
- - Distribution and Redemption Check Issuance
- - Courier services
- - Federal Reserve charges for check clearance
- - Overtime, as approved by the Fund
- - Temporary staff, as approved by the Fund
- - Travel and entertainment, as approved by the Fund
- - Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- - Third party audit reviews
- - Insurance
- - Pricing services (or services used to determine Fund NAV)
- - Vendor set-up charges for Blue Sky and other services
- - Blue Sky filing or registration fees
- - EDGAR filing fees
- - Vendor pricing comparison
- - Such other expenses as are agreed to by Investor Services Group and
the Fund

The Fund agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with Investor Services Group. In
addition, the Fund will promptly reimburse Investor Services Group for
any other unscheduled expenses incurred by Investor Services Group
whenever the Fund and Investor Services Group mutually agree that such
expenses are not otherwise properly borne by Investor Services Group as
part of its duties and obligations under the Agreement.

Page 35

SCHEDULE E

FUND DOCUMENTS

- - Certified copy of the Certificate of Formation of the Fund, as amended

- - Certified copy of the Limited Liability Company Agreement and
Operating By-Laws of the Fund, as amended

- - Copy of the resolution of the Board of Trustees authorizing the
execution and delivery of this Agreement

- - Copies of all agreements between the Fund and its service providers

- - Specimens of the certificates for Membership Interests of the Fund, if
applicable, in the form approved by the Board of Managers Trustees of
the Fund, with a certificate of the Secretary of the Fund as to such
approval

- - All account application forms and other documents relating to Member
accounts or to any plan, program or service offered by the Fund

- - Certified list of Members of the Fund with the name, address and
taxpayer identification number of each Member, and the number of
Membership Interests of the Fund held by each, certificate numbers and
denominations (if any certificates have been issued), lists of any
accounts against which stop transfer orders have been placed, together
with the reasons therefore, and the number of Membership Interests
redeemed by the Fund

- - All notices issued by the Fund with respect to the Membership
Interests in accordance with and pursuant to the Certificate of
Formation, Limited Liability Company Agreement or Operating By-Laws of
the Fund or as required by law and shall perform such other specific
duties as are set forth in the Certificate of Formation, Limited
Liability Company Agreement and Operating By-Laws including the giving
of notice of any special or annual meetings of Members and any other
notices required thereby.

- - A listing of all jurisdictions in which each Portfolio is registered
and lawfully available for sale as of the date of this Agreement and all
information relative to the monitoring of sales and registrations of
Fund Membership Interests in such jurisdictions

- - Each Fund's most recent post-effective amendment to its Registration
Statement

- - Each Fund's most recent prospectus and statement of additional
information, if applicable, and all amendments and supplements thereto

Page 36

ADMINISTRATIVE SERVICES AGREEMENT

This AGREEMENT is made this 1st day of October, 1999 by and between
First Trust Defined Portfolio Fund, LLC (the "Fund"), a Delaware limited
liability company, and American Skandia Life Assurance Corporation
("American Skandia"), a stock life insurance company domiciled in
Connecticut.

WHEREAS, the Fund is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Fund is authorized to issue interests ("Shares") in
separate portfolios with each such portfolios representing interests in
a separate portfolio of securities and other assets; and

WHEREAS, the Fund initially established a number of portfolios, and may
establish other portfolios in the future (each a "Portfolio" and
collectively the "Portfolios"); and

WHEREAS, the Fund is currently available to offer shares of one or more
of its Portfolios to a separate account of American Skandia that fund
variable annuity contracts ("Variable Contracts") and, therefore, to
serve as an underlying investment medium for Variable Contracts offered
by American Skandia; and

WHEREAS, pursuant to an Investment Advisory and Management Agreement
between the Fund and First Trust Advisors L.P. ("First Trust") dated
October 1, 1999 ("Management Agreement"), the Fund has retained First
Trust to furnish investment advisory and management services and certain
administrative services (collectively, "management services") with
respect to the Portfolios in the manner and on the terms thereinafter
set forth; and

WHEREAS, the Fund wishes to retain American Skandia to provide certain
administrative services to the Fund with respect to the Portfolios in
the manner and on the terms hereinafter set forth, and

WHEREAS, American Skandia is willing to furnish such services in the
manner and on the terms hereinafter set forth;

NOW, THEREFORE in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:

1.Appointment. The Fund hereby appoints American Skandia as the
administrator (the "Administrator") to provide certain administrative
and other services with respect to the Portfolios for the period and on
the terms set forth in this agreement. The Administrator accepts such
appointment and agrees during such period to render the services herein
set forth for the compensation herein provided.

Page 1

In the event the Fund establishes and designates additional portfolios
with respect to which it desires to retain the Administrator to render
the administrative and other services hereunder, it shall notify the
Administrator in writing. If the Administrator is willing to render such
services it shall notify the Fund in writing, whereupon such additional
portfolios shall become a Portfolio hereunder.

2.Duties. Subject to the general supervision of the Trustees, the
Administrator shall provide those administrative services reasonably
necessary for the operation of the Portfolios other than the management
services provided by First Trust pursuant to the Management Agreement.

(a)The services hereunder shall also include the following: (i)
coordinating matters relating to the operation of the Separate Account
with the Portfolios, including any necessary coordination with the
custodian, transfer agent, dividend disbursing agent, recordkeeping
agent, accountants, attorneys, and other parties performing services or
operational functions for the Portfolios; (ii) coordinating the
preparation of the necessary documents with the SEC and other federal
and state regulatory authorities as may be required; (iii) taking such
other action as may be required by applicable law, with respect to the
foregoing, including without limitation the rules and regulations of the
SEC and of state insurance authorities and other regulatory agencies;
and (iv) coordinating with First Trust regarding investment limitations
and parameters imposed on funding vehicles for variable annuities by the
insurance laws of the various states and by the Internal Revenue Code.

(b)The Administrator shall also make its officers and employees
available to the Trustees and officers of the Fund for consultation and
discussions regarding the operations of the Separate Account and the
Variable Contracts in connection with the administration of the
Portfolios and services provided to the Portfolios under this agreement.

(c)In performing these services, the Administrator:

(i)Shall conform with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and regulations,
with any applicable procedures adopted by the Fund's Trustees, and with
the provisions of the Fund's Registration Statement filed on Form N-1A
as supplemented or amended from time to time.

(ii)Will make available to the Fund, promptly upon request, appropriate
books and records as are maintained under this agreement, and will
furnish to regulatory authorities having the requisite authority any
such books and records and any information or reports in connection with
the Administrator's services under this agreement that may be requested.

(iii)Will regularly report to the Fund's Trustees on the services
provided under this agreement and will furnish the Fund's Board of
Trustees with respect to the Portfolios such periodic and special
reports with respect to such services as the Trustees may reasonably
request.

Page 2

3.Documentation. The Fund has delivered copies of each of the following
documents to the Administrator and will deliver to it all future
amendments and supplements thereto, if any:

(a)the Fund's Registration Statement as filed with the SEC and any
amendments thereto; and

(b)exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration
Statement described above.

4.Independent Contractor. The Administrator shall for all purposes
herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Board of
Trustees of the Fund from time to time, have no authority to act for or
represent the Fund in any way or otherwise be deemed its agent.

5.Administrative Fee. As compensation for the services rendered under
this agreement, the Fund shall pay to the Administrator a fee at an
annual rate of 0.325% of the average daily net assets of each Portfolio
that were invested in such Portfolio through the Separate Account. The
fee payable to the Administrator for all of the Portfolios shall be
computed and accrued daily and paid [quarterly]. If the Administrator
shall serve for less than any whole month, the foregoing compensation
shall be prorated.

6.Non-Exclusivity. It is understood that the services of the
Administrator hereunder are not exclusive, and the Administrator shall
be free to render similar services to other investment companies and
other clients.

7.Expenses. During the term of this agreement, the Administrator will
pay all ordinary expenses incurred by it in connection with its
obligations under this agreement.

8.Standard of Care. The Administrator shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or the reckless disregard by it of
its obligations and duties under this agreement.

9.Terms and Continuation. This agreement shall take effect as of the
date indicated above, and shall remain in effect, unless sooner
terminated as provided herein, for two years from such date, and shall
continue thereafter on an annual basis with respect to the Portfolios
provided that such continuance is specifically approved at least
annually (a) by the vote of a majority of the Board of Trustees of the
Fund, or (b) by vote of a majority of the outstanding voting shares of
the Portfolios, and provided continuance is also approved by the vote of
the majority of the Board of Trustees of the Fund who are not parties to
this agreement or "interested persons" (as defined in the 1940 Act) of
the Fund, or the Administrator, cast in person at a meeting called for
the purpose of voting on such approval.

This agreement may be terminated:

Page 3

(a)by the Fund at any time with respect to the services provided by the
Administrator, by vote of a majority of the entire Board of Trustees of
the Fund or by a vote of a majority of the outstanding voting shares of
the Fund or, with respect to a particular" Portfolio, by vote of a
majority of the outstanding voting shares of such Portfolio, on sixty
(60) days' written notice to the Administrator;

(b)by the Administrator at any time, without the payment of any penalty,
upon sixty (60) days' written notice to the Fund.

10.Notice. Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of such
party set forth below or at such other address as such party may from
time to time specify in writing to the other party.

If to the Administrator:

American Skandia Life Assurance Company
One Corporate Drive
P.O. Box 883
Shelton, Connecticut 06484-0883
Attention: Scott Richardson

If to the Fund:

First Trust Defined Portfolio Fund, LLC
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
Attention: General Counsel

11.Fund Obligations. The Certificate of Formation of the Fund on file
with the Secretary of State of the State of Delaware was executed on
behalf of the Fund by its authorized person, and any obligation of the
Fund shall be binding only upon the assets of the Fund (or applicable
series thereof) and shall not be binding upon any trustee, officer,
employee, agent, member or shareholder of the Fund. Neither the
authorization of any action by any trustee, officer, employee, agent,
member or shareholder of the Fund nor the execution of this agreement on
behalf of the Fund shall impose any liability upon any trustee, officer,
employee, agent, member or shareholder of the Fund.

12.Counterparts. This agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.

13.Miscellaneous. (a) This agreement shall be governed by Illinois law
(without regard to principles of conflicts of law) except for Section
11, which shall be governed by Delaware law; provided that nothing
herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the Securities and Exchange Commission
thereunder.

Page 4

(b)If any provision of this agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
agreement shall not be affected thereby.

(c)The captions in this agreement are included for convenience only and
in no way define any of the provisions hereof or otherwise affect their
construction or effect.

(d)This agreement may not be assigned (as defined under the 1940 Act) by
the Fund or the Administrator without the consent of the other party.

(e)This agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective successors.

Page 5

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first
above written.

FIRST TRUST DEFINED PORTFOLIO FUND, LLC,
a Delaware limited liability company

AMERICAN SKANDIA LIFE ASSURANCE CORPORATION,
a Connecticut stock life insurance company

Page 6

September 30, 1999

First Defined Portfolio Fund, LLC
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532

Re: First Defined Portfolio Fund, LLC

Gentlemen:

We have served as counsel for the First Defined Portfolio Fund, LLC (the
"Fund"), which proposes to offer and sell membership interests of eleven
series (collectively, the "Interests") in the manner and on the terms
set forth in Pre-Effective Amendment No. 2 to its registration statement
on Form N-1A to be filed on or about September 30, 1999 (the
"Amendment") with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended. The Fund consists of the following series: The DowSM
Target 5 Portfolio, The DowSM DART 10 Portfolio, Global Target 15
Portfolio, S&P Target 10 Portfolio, NASDAQ Target 15 Portfolio, First
Trust 10 Uncommon Values Portfolio, First Trust Energy Portfolio, First
Trust Financial Services Portfolio, First Trust Pharmaceutical
Portfolio, First Trust Technology Portfolio, and First Trust Internet
Portfolio.

In connection therewith, we have examined such pertinent records and
documents and matters of law, including the opinions of Potter Anderson
& Corroon LLP upon which we have relied as they relate to the laws of
the State of Delaware, as we have deemed necessary in order to enable us
to express the opinion hereinafter set forth.

Based upon the foregoing, we are of the opinion that:

The Interests of the Fund, which are currently being registered by the
Amendment referred to above, may be legally and validly issued from time
to time in accordance with the Fund's Limited Liability Company
Agreement dated as of January 8, 1999, the Fund's Operating By-Laws, the
Fund's Amended and Restated Establishment and Designation of Series of
Membership Interests, and the Amendment, and subject to compliance with
the Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and applicable state laws regulating the sale of
securities and the receipt by the Fund of a purchase price of not less
than the net asset value per Interest and such Interests, when so issued
and sold, will be legally issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 333-72447) relating to the Interests
referred to above, to the use of our name and to the reference to our
firm in said Registration Statement.

Respectfully submitted,

Chapman and Cutler

September 30, 1999

Re: First Defined Portfolio Fund, LLC

Ladies and Gentlemen:

We have acted as special Delaware counsel for First Defined Portfolio
Fund, LLC, a Delaware limited liability company (the "Company"). You
have requested this opinion in connection with the matters set forth
below. Terms used herein and not otherwise defined herein shall have
the meanings set forth in that certain Limited Liability Company
Agreement (the "LLC Agreement") dated as of January 8, 1999 by James A.
Bowen (the "Member").

For purposes of giving the opinions hereinafter set forth, we have
examined:

1. A certified copy of the Certificate of Formation of the Company dated
as of January 8, 1999 as filed with the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on January 8, 1999;

2. A certified copy of the Certificate of Amendment to the Company's
Certificate of Formation dated April 27, 1999 as filed with the
Secretary of State on June 8, 1999;

3. A certified copy of the Company's Amended and Restated Certificate of
Formation dated as of September 20, 1999 as filed with the Secretary of
State on September 27, 1999 (the "Company's Certificate");

4. The LLC Agreement;

5. The Establishment and Designation of Series adopted by the Company's
sole Trustee on June 18, 1999;

6. The Amended and Restated Establishment and Designation of Series (the
"Designation") adopted by the Company's Board of Trustees on September
20, 1999 (the Membership Interests so designated therein being the
"Designated Membership Interests");

7. The Membership Interest Transfer Agreement by and between James A.
Bowen and American Skandia Life Assurance Corporation Variable Account B
(the "Transfer Agreement");

8. A Long Form Certificate of Good Standing for the Company dated as of
September 30, 1999, obtained from the Secretary of State;

9. Certified Resolutions of the Sole Trustee dated June 21, 1999,
increasing the size of the Board of Trustees; and

10. Certified Resolutions of the Board of Trustees dated September 20,
1999, approving the issuance of certain Designated Membership Interests
and an Amended Schedule A to the LLC Agreement.

As to certain facts material to the opinions expressed herein, we have
relied upon the representations and warranties contained in the
documents examined by us.

Based upon the foregoing, and upon an examination of such questions of
law of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations
and exceptions set forth herein, we are of the opinion that:

1.The Company has been duly formed and is validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware.

2.The Designated Membership Interests have been duly authorized by the
LLC Agreement and the Designation.

3.Assuming (i) the payment of such consideration, if any, as the Board
of Trustees shall require, and (ii) reflection on an amended Exhibit B
to the LLC Agreement, such Schedule A having been duly adopted by the
Board of Trusteees, the Designated Membership Interests are legally
issued, fully paid, and non-assessable Membership Interests of the
Company.

In addition to the assumptions and qualifications set forth above, all
of the foregoing opinions contained herein are subject to the following
assumptions, qualifications, limitations and exceptions:

a.The foregoing opinions are limited to the laws of the State of
Delaware presently in effect, excluding the securities laws thereof. We
have not considered and express no opinion on the laws of any other
jurisdiction, including, without limitation, federal laws and rules and
regulations relating thereto.

b.We have assumed the due execution, authorization and delivery by each
party thereto of each document examined by us. We have assumed the
legal capacity of any individual party to any document examined by us.

c.We have assumed that all signatures on documents examined by us are
genuine, that all documents submitted to us as originals are authentic
and that all documents submitted to us as copies conform with the
originals.

d.We have assumed that (i) no event of dissolution, termination or
liquidation under the LLC Agreement has occurred (ii) there has been no
transfer by the Member of its Membership Interests (except with respect
to any transfer of Membership Interests to American Skandia Life
Assurance Corporation Variable Account B in accordance with Section
2.7(a) of the LLC Agreement and the Transfer Agreement (if so reflected
on Exhibit B to the LLC Agreement)), (iii) there has been no decree of
dissolution under Section 18-802 of the Act with respect to the Company,
and (iv) the Member has made all required capital contributions under
the LLC Agreement.

e.We have assumed that LLC Agreement constitutes the legal, valid,
binding and enforceable obligation of each of the parties thereto
enforceable against such parties in accordance with its terms.

f.We have assumed that the Company's Certificate, the LLC Agreement, and
the Designation constitute the entire agreement of the parties to the
LLC Agreement with respect to the creation, operation, dissolution and
winding-up of, and admission of members to, the Company.

g.We have assumed that all Membership Interests are and will be issued
in accordance with the LLC Agreement and the Designation.

This opinion is rendered solely for your benefit and for the benefit of
any Assignee in connection with the matters set forth herein. In
particular, you may rely on this opinion with respect to the matters set
forth herein in connection with your opinion being delivered on even
date herewith. This opinion may not be furnished (except that it may be
furnished to any federal, state or local regulatory agencies or
regulators having appropriate jurisdiction and entitled to such
disclosure) or quoted to, or relied upon by, any other person or entity
for any purpose without our prior written consent. However, we consent
to the filing of this opinion as an exhibit to that certain Pre-
effective Amendment No. 2 to the Company's Registration Statement filed
on Form N-1A with the Securities and Exchange Commission.

Very truly yours,

FIRST DEFINED PORTFOLIO FUND, LLC

12b-1 SERVICE PLAN

The following 12b-1 Service Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, as amended (the
"1940 Act"), by First Defined Portfolio Fund, LLC (the "Company") for
its series (each a "fund" and collectively, the "funds") listed on
Schedule A attached hereto. The Plan has been approved by a majority of
the Company's Trustees, including a majority of the Trustees who are not
interested persons of the Company (as defined in the 1940 Act) and who
have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan (the "non-interested
Trustees"), cast in person at a meeting called for the purpose of voting
on such Plan.

Section 1. ANNUAL FEES.

Each fund shall compensate Nike Securities L.P. (the "Distributor") a
service fee not to exceed 0.25% (1/4 of 1%) per annum of the average
daily net assets of each fund which is to be paid on a monthly basis.

The Distributor may use the service fee to compensate American Skandia
Life Assurance Corporation (the "Servicer") and others for providing
account services to policy owners. These services include (i)
establishing and maintaining policy owner accounts, (ii) answering
inquiries, (iii) providing other personal services to policy owners,
(iv) providing information periodically to contract owners showing,
their interest in the Separate Account or subaccounts thereof that
invest in the Company or any Funds thereof, (v) addressing inquiries of
contract owners relating to investing, exchanging or transferring, or
redeeming interests under the Variable Contracts, which inquiries may
relate to the Company or any Funds thereof, (vi) providing explanations
to contract owners regarding fund investment objectives and policies and
other information about the Company or any Funds thereof, including the
performance of the funds, (vii) delivering any prospectuses, statements
of additional information or annual or semi-annual reports relating to
the Company, and (viii) delivering any notices of interest-holder
meetings and proxy statements accompanying such notices in connection
with general and special meetings of interest-holders of the Company
under which contract owners may have voting rights and tabulating the
votes of contract owners tendering voting instructions to the Separate
Account.

Section 2. EXPENSES NOT COVERED BY THE PLAN.

First Trust Advisors, L.P. may use any portion of its advisory fee to
compensate the Distributor for expenses incurred in connection with the
sales and distribution of a fund's interests including, without
limitation, compensation of its sales force, expenses of printing and
distributing prospectuses to persons other than interest holders or
policy owners, expenses of preparing, printing and distributing
advertising and sales literature and reports to interests holders and
policy owners used in connection with the sale of a fund's interests,
certain other expenses associated with the distribution of interests of
the funds, and any distribution-related expenses that may be authorized
from time to time by the Board of Trustees.

All such expenses covered by the Plan shall be deemed incurred whether
paid directly by the Distributor or by a third party to the extent
reimbursed therefor by the Distributor.

Page 1

Section 3. WRITTEN REPORTS.

The Distributor shall furnish to the Trustees, for their review, on a
quarterly basis, a written report of the monies paid by any Fund under
the Plan or any related agreement and the purposes therefor, and shall
furnish the Trustees with such other information as the Trustees may
reasonably request in connection with payments made by any Fund under
the Plan or any related agreement in order to enable the Trustees to
make an informed determination of whether the Plan should be continued.

Section 4. TERMINATION.

The Plan may be terminated at any time with respect to any fund, without
penalty, by a vote of a majority of the non-interested Trustees or by
vote of a majority of the outstanding voting interests of any fund, and
any distribution agreement under the Plan may be likewise terminated on
not more than sixty (60) days' written notice. Once terminated, no
further payments shall be made under the Plan notwithstanding the
existence of any unreimbursed current or carried forward distribution
expenses.

Section 5. AMENDMENTS.

The Plan may not be amended to increase materially the amount to be
spent for distribution and servicing of fund interests without approval
by a majority of the outstanding voting interests of the fund. All
material amendments to the Plan and any related distribution agreement
shall be approved by the Trustees and the non-interested Trustees cast
in person at a meeting called for the purpose of voting on any such
amendment.

Section 6. SELECTION OF INDEPENDENT TRUSTEES.

So long as the Plan is in effect, the selection and nomination of the
Trustees who are not interested Trustees of the Company shall be
committed to the discretion of those Trustees who are not interested
persons of the Company.

Section 7. EFFECTIVE DATE OF PLAN.

The Plan shall take effect as of the date hereof and, unless sooner
terminated, shall continue in effect for a period of more than one year
from the date of its execution only so long as such continuance is
specifically approved at least annually by the Trustees, including the
non-interested Trustees, cast in person at a meeting called for the
purpose of voting on such continuance.

Section 8. PRESERVATION OF MATERIALS.

The Company will preserve copies of the Plan, any agreements relating to
the Plan and any report made pursuant to Section 4 above, for a period
of not less than six years (the first two years in an easily accessible
place) from the date of the Plan, agreement or report.

Section 9. MEANINGS OF CERTAIN TERMS.

As used in the Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the same meaning
that those terms have under the 1940 Act and the rules and regulations
under the 1940 Act, subject to any exemption that may be granted to the
Company under the 1940 Act by the Securities and Exchange Commission.

Adopted:

Page 2

SCHEDULE

Page 3

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned constitutes and
appoints Thomas Calabria, Esq., Carolyn Mead, Esq., David Peters, Esq.,
W. Scott Jardine, Esq. and James A. Bowen and each of them, with full
power to act without the other, as a true and lawful attorney-in-fact
and agent, with full and several power of substitution, to take any
appropriate action to execute and file with the U.S. Securities and
Exchange Commission, any amendment to the registration statement of
First Defined Portfolio Fund, LLC (the "Company"), to file any request
for exemptive relief from state and federal regulations, to perform on
behalf of the Company any and all such acts as such attorneys-in-fact
may deem necessary or advisable in order to comply with the applicable
laws of the United States, and in connection therewith to execute and
file all requisite papers and documents, including, but not limited to,
applications, reports, surety bonds, irrevocable consents and
appointments of attorneys for service of process; granting to such
attorneys-in-fact and agents, and each of them, full power and authority
to do and perform each and every act requisite and necessary to be done
in connection therewith, as fully as each might or could do in person,
hereby ratifying and confirming all that such attorneys-in-fact and
agents or any of them, or their substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 21st day of June, 1999.

By: /s/ Richard E. Erickson
Name: Richard E. Erickson

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 21st day of June, 1999.

By: /s/ Patrick M. Fitzgerald
Name: Patrick M. Fitzgerald

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 21st day of June, 1999.

By: /s/ James A. Bowen
Name: James A. Bowen

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 21st day of June, 1999.

By: /s/ Niel B. Nielson
Name: Niel B. Nielson

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
on the 21st day of June, 1999.

By: /s/ Robert J. Bartel
Name: Robert J. Bartel