INTERIM INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 14th day of September, 2007 by and
among Energy Income and Growth Fund, a Massachusetts business
trust (the "Fund"), First Trust Advisors L.P., an Illinois
limited partnership and a registered investment adviser with the
Securities and Exchange Commission ("SEC") (the "Manager"), and
Energy Income Partners, LLC, a Delaware limited liability
company and a registered investment adviser with the SEC (the
"Sub-Adviser").
WHEREAS, the Fund is a closed-end management investment
company registered under the Investment Company Act of 1940, as
amended (the "1940 Act");
WHEREAS, the Fund has retained the Manager to serve as the
investment manager for the Fund pursuant to an Investment
Management Agreement between the Manager and the Fund (as such
agreement may be modified from time to time, the "Management
Agreement");
WHEREAS, the Management Agreement provides that the Manager
may, subject to the initial and periodic approvals required
under Section 15 of the 1940 Act, appoint a sub-adviser at its
own cost and expense for the purpose of furnishing certain
services required under the Management Agreement;
WHEREAS, in accordance with Rule 15a-4(b)(1) under the 1940
Act, the Fund and the Manager desire to retain the Sub-Adviser
to furnish investment advisory services for the Fund's
investment portfolio, upon the terms and conditions hereafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
1. Appointment. The Fund and the Manager hereby appoint
the Sub-Adviser to provide certain sub-investment advisory
services to the Fund for the period and on the terms set forth
in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the
compensation herein provided. The Sub-Adviser shall, for all
purposes herein provided, be deemed an independent contractor
and, unless otherwise expressly provided or authorized, shall
have no authority to act for nor represent the Fund or Manager
in any way, nor otherwise be deemed an agent of the Fund or the
Manager.
2. Services to Be Performed. Subject always to the
supervision of the Fund's Board of Trustees and the Manager, the
Sub-Adviser will act as sub-adviser for, and manage on a
discretionary basis the investment and reinvestment of the
assets of the Fund, furnish an investment program in respect of,
make investment decisions for, and place all orders for the
purchase and sale of securities for the Fund's investment
portfolio, all on behalf of the Fund and as described in the
Fund's most recent effective registration statement on Form N-2
as declared effective by the SEC, and as the same may thereafter
be amended from time to time. In the performance of its duties,
the Sub-Adviser will in all material respects (a) satisfy any
applicable fiduciary duties it may have to the Fund, (b) monitor
the Fund's investments, and (c) comply with the provisions of
the Fund's Declaration of Trust and By-laws, as amended from
time to time and communicated by the Fund or the Manager to the
Sub-Adviser in writing, and the stated investment objectives,
policies and restrictions of the Fund as such objectives,
policies and restrictions may subsequently be changed by the
Fund's Board of Trustees and communicated by the Fund or the
Manager to the Sub-Adviser in writing. The Fund or the Manager
has provided the Sub-Adviser with current copies of the Fund's
Declaration of Trust, By-laws, prospectus, statement of
additional information and any amendments thereto, and any
objectives, policies or limitations not appearing therein as
they may be relevant to the Sub-Adviser's performance under this
Agreement.
The Sub-Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio
investments for the Fund, and is directed to use its
commercially reasonable efforts to obtain best execution, which
includes most favorable net results and execution of the Fund's
orders, taking into account all appropriate factors, including
price, dealer spread or commission, size and difficulty of the
transaction and research or other services provided. Subject to
approval by the Fund's Board of Trustees and compliance with the
policies and procedures adopted by the Board of Trustees for the
Fund and to the extent permitted by and in conformance with
applicable law (including Rule 17e-1 of the 1940 Act), the Sub-
Adviser may select brokers or dealers affiliated with the
Sub-Adviser. It is understood that the Sub-Adviser will not be
deemed to have acted unlawfully, or to have breached a fiduciary
duty to the Fund, or be in breach of any obligation owing to the
Fund under this Agreement, or otherwise, solely by reason of its
having caused the Fund to pay a member of a securities exchange,
a broker or a dealer a commission for effecting a securities
transaction for the Fund in excess of the amount of commission
another member of an exchange, broker or dealer would have
charged if the Sub-Adviser determined in good faith that the
commission paid was reasonable in relation to the brokerage or
research services provided by such member, broker or dealer,
viewed in terms of that particular transaction or the Sub-
Adviser's overall responsibilities with respect to its accounts,
including the Fund, as to which it exercises investment
discretion.
In addition, the Sub-Adviser may, to the extent permitted
by applicable law, aggregate purchase and sale orders of
securities placed with respect to the assets of the Fund with
similar orders being made simultaneously for other accounts
managed by the Sub-Adviser or its affiliates, if in the Sub-
Adviser's reasonable judgment such aggregation shall result in
an overall economic benefit to the Fund, taking into
consideration the selling or purchase price, brokerage
commissions and other expenses. In the event that a purchase or
sale of an asset of the Fund occurs as part of any aggregate
sale or purchase orders, the objective of the Sub-Adviser and
any of its affiliates involved in such transaction shall be to
allocate the securities so purchased or sold, as well as
expenses incurred in the transaction, among the Fund and other
accounts in a fair and equitable manner. Nevertheless, the Fund
and the Manager acknowledge that under some circumstances, such
allocation may adversely affect the Fund with respect to the
price or size of the securities positions obtainable or salable.
Whenever the Fund and one or more other investment advisory
clients of the Sub-Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated
in a manner believed by the Sub-Adviser to be equitable to each,
although such allocation may result in a delay in one or more
client accounts being fully invested that would not occur if
such an allocation were not made. Moreover, it is possible that
due to differing investment objectives or for other reasons, the
Sub-Adviser and its affiliates may purchase securities or loans
of an issuer for one client and at approximately the same time
recommend selling or sell the same or similar types of
securities or loans for another client.
The Sub-Adviser will not arrange purchases or sales of
securities between the Fund and other accounts advised by the
Sub-Adviser or its affiliates unless (a) such purchases or sales
are in accordance with applicable law (including Rule 17a-7 of
the 0000 Xxx) and the Fund's policies and procedures, (b) the
Sub-Adviser determines the purchase or sale is in the best
interests of the Fund, and (c) the Fund's Board of Trustees has
approved these types of transactions.
The Fund may adopt policies and procedures that modify or
restrict the Sub-Adviser's authority regarding the execution of
the Fund's portfolio transactions provided herein. Such
policies and procedures and any amendments thereto will be
communicated by the Manager to the Sub-Adviser.
The Sub-Adviser will communicate to the officers and
trustees of the Fund such information relating to transactions
for the Fund as they may reasonably request. In no instance
will the Fund's portfolio securities be purchased from or sold
to the Manager, the Sub-Adviser or any affiliated person of
either the Fund, the Manager, or the Sub-Adviser, except as may
be permitted under the 1940 Act.
The Sub-Adviser further agrees that it:
(a) will use the same degree of skill and care in
providing such services as it uses in providing services to
other fiduciary accounts for which it has investment
responsibilities;
(b) will (i) conform in all material respects to all
applicable rules and regulations of the SEC, (ii) comply in
all material respects with all policies and procedures
adopted by the Board of Trustees for the Fund and
communicated to the Sub-Adviser in writing and, (iii)
conduct its activities under this Agreement in all material
respects in accordance with any applicable law and
regulations of any governmental authority pertaining to its
investment advisory activities;
(c) will report to the Manager and to the Board of
Trustees of the Fund on a quarterly basis and will make
appropriate persons available for the purpose of reviewing
with representatives of the Manager and the Board of
Trustees on a regular basis at such times as the Manager or
the Board of Trustees may reasonably request in writing
regarding the management of the Fund, including, without
limitation, review of the general investment strategies of
the Fund, the performance of the Fund's investment
portfolio in relation to relevant standard industry indices
and general conditions affecting the marketplace and will
provide various other reports from time to time as
reasonably requested by the Manager or the Board of
Trustees of the Fund; and
(d) will prepare and maintain such books and records
with respect to the Fund's securities and other
transactions for the Fund's investment portfolio as
required for registered investment advisers under
applicable law or as otherwise requested by the Manager
and will prepare and furnish the Manager and Fund's Board
of Trustees such periodic and special reports as the Board
or the Manager may reasonably request. The Sub-Adviser
further agrees that all records that it maintains for the
Fund are the property of the Fund and the Sub-Adviser will
surrender promptly to the Fund any such records upon the
request of the Manager or the Fund (provided, however, that
the Sub-Adviser shall be permitted to retain copies
thereof); and shall be permitted to retain originals (with
copies to the Fund) to the extent required under Rule 204-2
of the Investment Advisers Act of 1940 or other applicable
law.
3. Expenses. During the term of this Agreement, the Sub-
Adviser will pay all expenses incurred by it in connection with
its activities under this Agreement other than (i) the cost of
securities and other assets purchased for the Fund, and (ii) the
costs directly associated with purchasing and selling securities
and other assets for the Fund, if any, including, but not
limited to, brokerage commissions, stamps, duties, taxes and
custody fees related to transfers.
4. Compensation. For the services provided and the
expenses assumed pursuant to this Agreement, the Manager will
pay the Sub-Adviser, and the Sub-Adviser agrees to accept as
full compensation therefor, a portfolio management fee (the
"Management Fee") equal to the annual rate of 0.50% of the
Fund's Managed Assets (as defined below). For purposes of
calculating the Management Fee, Managed Assets means the average
daily gross asset value of the Fund (including assets
attributable to the Fund's preferred shares, if any, and the
principal amount of borrowings), minus the sum of the Fund's
accrued and unpaid dividends on any outstanding preferred shares
and accrued liabilities (other than the principal amount of any
borrowings incurred, commercial paper or notes or other forms of
indebtedness issued by the Fund and the liquidation preference
of any outstanding preferred shares). The Management Fee shall
be payable in arrears on or about the first day of each month
during the term of this Agreement.
For the month and year in which this Agreement becomes
effective or terminates, there shall be an appropriate proration
on the basis of the number of days that the Agreement is in
effect during the month and year, respectively.
5. Services to Others. The Fund and the Manager
acknowledge that the Sub-Adviser now acts, or may in the future
act, as an investment adviser to other managed accounts and as
investment adviser or sub-investment adviser to one or more
other investment companies that are not a series of the Fund.
In addition, the Fund and Manager acknowledge that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's
duties under this Agreement will not devote their full time to
such efforts. It is also agreed that the Sub-Adviser may use
any supplemental research obtained for the benefit of the Fund
in providing investment advice to its other investment advisory
accounts and for managing its own accounts.
6. Limitation of Liability. The Sub-Adviser shall not be
liable for, and the Fund and Manager will not take any action
against the Sub-Adviser to hold the Sub-Adviser liable for, any
error of judgment or mistake of law or for any loss suffered by
the Fund or the Manager (including, without limitation, by
reason of the purchase, sale or retention of any security) in
connection with the performance of the Sub-Adviser's duties
under this Agreement, except for a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser in the performance of its duties under this
Agreement, or by reason of its reckless disregard of its
material obligations and duties under this Agreement.
7. Term; Termination; Amendment. This Agreement shall
become effective with respect to the Fund on September 14, 2007
(the "Effective Date") (it being understood that the Manager
shall notify the Sub-Adviser of the date of effectiveness as
soon as reasonably practical after effectiveness) and shall
remain in full force for (i) 150 days following the Effective
Date or (ii) until a "vote of a majority of the outstanding
voting securities" (as defined in the 0000 Xxx) of the Fund have
approved a new sub-advisory agreement with Sub-Adviser or (iii)
unless sooner terminated as hereinafter provided, whichever
occurs first.
This Agreement (a) shall automatically terminate in the
event of its assignment and (b) may be terminated at any time
without the payment of any penalty by the Manager or the
Sub-Adviser upon sixty (60) days' written notice to the other
parties. This Agreement may also be terminated by the Fund by
action of the Board of Trustees of the Fund or by a vote of a
majority of the outstanding voting securities of such Fund upon
sixty (60) days' written notice to the Sub-Adviser by the Fund
without payment of any penalty.
This Agreement may be terminated at any time without the
payment of any penalty by the Manager, the Board of Trustees of
the Fund or by vote of a majority of the outstanding voting
securities of the Fund in the event that it shall have been
established by a court of competent jurisdiction that the Sub-
Adviser or any officer or director of the Sub-Adviser has taken
any action that results in a breach of the material covenants of
the Sub-Adviser set forth herein.
The terms "assignment" and "vote of a majority of the
outstanding voting securities" shall have the meanings set forth
in the 1940 Act and the rules and regulations thereunder.
Termination of this Agreement shall not affect the right of
the Sub-Adviser to receive payments on any unpaid balance of the
compensation described in Section 4 earned prior to such
termination and for any additional period during which Sub-
Adviser serves as such for the Fund, subject to applicable law.
8. Compliance Certification. From time to time the Sub-
Adviser shall provide such certifications with respect to Rule
38a-1 under the 1940 Act, as are reasonably requested by the
Fund or Manager. In addition, the Sub-Adviser will, from time
to time, provide a written assessment of its compliance program
in conformity with current industry standards that is reasonably
acceptable to the Fund to enable the Fund to fulfill its
obligations under Rule 38a-1 of the 1940 Act.
9. Notice. Any notice under this Agreement shall be
sufficient in all respects if given in writing and delivered by
commercial courier providing proof of delivery and addressed as
follows or addressed to such other person or address as such
party may designate for receipt of such notice.
If to the Manager or the Fund:
If to the Sub-Adviser:
Energy Income and Growth Fund
First Trust Advisors
0000 Xxxxxxxxxxx Xxxx, Xxxxx
000
Xxxxx, Xxxxxxxx 00000
Attention: Secretary
If by Facsimile: (630) 241-
8650
ENERGY INCOME PARTNERS, LLC
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention:
___________________]
If by Facsimile:
[______________]
10. Limitations on Liability. All parties hereto are
expressly put on notice of the Fund's Declaration of Trust and
all amendments thereto, a copy of which is on file with the
Secretary of the Commonwealth of Massachusetts, and the
limitation of shareholder and trustee liability contained
therein and a copy of which has been provided to the Sub-Adviser
prior to the date hereof. This Agreement is executed on behalf
of the Fund by the Fund's officers in their capacity as officers
and not individually and are not binding upon any of the
Trustees, officers, or shareholders of the Fund individually but
the obligations imposed upon the Fund by this Agreement are
binding only upon the assets and property of the Fund, and
persons dealing with the Fund must look solely to the assets of
the Fund and those assets belonging to the subject Fund, for the
enforcement of any claims.
11. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define
or delimit any of the provisions hereof or otherwise affect
their construction or effect. This Agreement will be binding
upon and shall inure to the benefit of the parties hereto and
their respective successors.
12. Applicable Law. This Agreement shall be construed in
accordance with applicable federal law and (except as to Section
10 hereof which shall be construed in accordance with the laws
of Massachusetts) the laws of the State of Illinois.
13. Amendment, Etc. This Agreement may only be amended, or
its provisions modified or waived, in a writing signed by the
party against which such amendment, modification or waiver is
sought to be enforced.
14. Authority. Each party represents to the others that it
is duly authorized and fully empowered to execute, deliver and
perform this Agreement. The Fund represents that engagement of
the Sub-Adviser has been duly authorized by the Fund and is in
accordance with the Fund's Declaration of Trust and other
governing documents of the Fund.
15. Severability. Each provision of this Agreement is
intended to be severable from the others so that if any
provision or term hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the
validity of the remaining provisions and terms hereof; provided,
however, that the provisions governing payment of the Management
Fee described in Section 4 are not severable.
16. Entire Agreement. This Agreement constitutes the sole
and entire agreement of the parties hereto with respect to the
subject matter expressly set forth herein.
IN WITNESS WHEREOF, the Fund, Manager and the Sub-Adviser have
caused this Agreement to be executed as of the day and year
first above written.
FIRST TRUST ADVISORS L.P. ENERGY INCOME PARTNERS, LLC
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Title: President Title: CEO
ENERGY INCOME AND GROWTH FUND
By: /s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Title: President
