ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of May
[___], 2004, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated ("Xxxxxxx Xxxxx") and First Trust Advisors L.P. ("First
Trust").
WHEREAS, First Trust/Four Corners Senior Floating Rate Income Fund II
(including any successor by merger or otherwise, the "Fund") is a
non-diversified, closed-end management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), and its common
shares are registered under the Securities Act of 1933, as amended;
WHEREAS, First Trust is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of
the Fund's common shares;
WHEREAS, First Trust desires to provide additional compensation to
Xxxxxxx Xxxxx for acting as lead underwriter in an offering of the Fund's common
shares; and
WHEREAS, First Trust desires to retain Xxxxxxx Xxxxx to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Xxxxxxx Xxxxx is willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. (a) First Trust hereby employs Xxxxxxx Xxxxx, for the period and on
the terms and conditions set forth herein, to provide the following
services at the reasonable request of First Trust:
(1) after-market support services designed to maintain the
visibility of the Fund on an ongoing basis;
(2) relevant information, including statistical and financial
market information and comparative information, studies or
reports regarding general trends in the closed-end
investment company and asset management industries, if
reasonably obtainable, and consult with representatives of
First Trust in connection therewith; and
(3) information to and consult with First Trust with respect to
applicable strategies designed to address market value
discounts, if any.
(b) At the request of First Trust, Xxxxxxx Xxxxx shall limit or cease
any action or service provided hereunder to the extent and for the
time period requested by First Trust; provided, however, that
pending termination of this Agreement as provided for in Section 6
hereof, any such limitation or cessation shall not relieve First
Trust of its payment obligations pursuant to Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify First Trust if it learns of any
material inaccuracy or misstatement in, or material omission from,
any written information, as of the date such information was
published, provided by Xxxxxxx Xxxxx to First Trust in connection
with the performance of services by Xxxxxxx Xxxxx under this
Agreement.
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2. First Trust shall pay Xxxxxxx Xxxxx a fee computed weekly and payable
quarterly in arrears commencing June 30, 2004 at an annualized rate of
0.15% of the Fund's Managed Assets (as defined below) for a term as
described in Section 6 hereof; provided that the sum total amount of the
fee hereunder, shall not exceed 4.05571% of the total price to the
public of the Fund's common shares offered by the prospectus dated May
[___], 2004 (the "Prospectus") (including all Initial Securities and
Option Securities as such terms are described in the Purchase Agreement,
dated May [___], 2004, by and among the Fund, First Trust, Four Corners
Capital Management, LLC and each of the Underwriters named therein (the
"Purchase Agreement")). The sum total of this fee, the incentive fee
payable to Xxxxxxx Xxxxx & Associates, Inc., the contingent
reimbursement amount payable to First Trust Portfolios, L.P., plus
the amounts paid by the Fund as the $.00667 per common share partial
reimbursement to the Underwriters, shall not exceed 4.5% of the total
price of the Trust's common shares offered by the Prospectus. "Managed
Assets" is defined as the total assets of the Fund (including any assets
attributable to any Preferred Shares that may be outstanding or
otherwise attributable to the use of leverage) minus the sum of accrued
liabilities (other than debt representing financial leverage). All
quarterly fees payable hereunder shall be paid to Xxxxxxx Xxxxx within
15 days following the end of each calendar quarter.
3. First Trust shall be permitted to discharge all or a portion of its
payment obligations hereunder upon prepayment in full or in part of the
remaining balance due of the maximum additional commission amount
described in paragraph 2 above.
4. First Trust acknowledges that the services of Xxxxxxx Xxxxx provided for
hereunder do not include any advice as to the value of securities or
regarding the advisability of purchasing or selling any securities for
the Fund's portfolio. No provision of this Agreement shall be considered
as creating, nor shall any provision create, any obligation on the part
of Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx is not hereby agreeing, to: (i)
furnish any advice or make any recommendations regarding the purchase or
sale of portfolio securities or (ii) render any opinions, valuations or
recommendations of any kind or to perform any such similar services in
connection with providing the services described in Section 1 hereof.
5. Nothing herein shall be construed as prohibiting Xxxxxxx Xxxxx or its
affiliates from providing similar or other services to any other clients
(including other registered investment companies or other investment
advisors), so long as Xxxxxxx Xxxxx'x services to First Trust are not
impaired thereby.
6. The term of this Agreement shall commence upon the date referred to
above and shall be in effect so long as First Trust acts as the
investment advisor to the Fund pursuant to the Investment Management
Agreement (as such term is defined in the Purchase Agreement) or other
subsequent advisory agreement.
7. First Trust will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx
Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). First Trust
recognizes and confirms that Xxxxxxx Xxxxx (a) will use and rely
primarily on the Information and on information available from generally
recognized public sources in performing the services contemplated by
this Agreement without having independently verified the same and (b)
does not assume responsibility for the accuracy or completeness of the
Information and such other information. To the best of First Trust's
knowledge, the Information to be furnished by First Trust, when
delivered, will be true and correct in all material respects and will
not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements contained therein not
misleading. First Trust will promptly notify Xxxxxxx Xxxxx if it learns
of any material inaccuracy or misstatement in, or material omission
from, any Information delivered to Xxxxxxx Xxxxx.
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8. First Trust agrees that Xxxxxxx Xxxxx shall have no liability to First
Trust or the Fund for any act or omission to act by Xxxxxxx Xxxxx in the
course of its performance under this Agreement, in the absence of gross
negligence or willful misconduct on the part of Xxxxxxx Xxxxx. First
Trust agrees to the indemnification and other agreements set forth in
the Indemnification Agreement attached hereto, the provisions of which
are incorporated herein by reference and shall survive the termination,
expiration or supersession of this Agreement.
9. This Agreement and any claim, counterclaim or dispute of any kind or
nature whatsoever arising out of or in any way relating to this
Agreement ("Claim") shall be governed by and construed in accordance
with the laws of the State of New York.
10. No Claim may be commenced, prosecuted or continued in any court other
than the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern
District of New York, which courts shall have exclusive jurisdiction
over the adjudication of such matters, and First Trust and Xxxxxxx Xxxxx
consent to the jurisdiction of such courts and personal service with
respect thereto. Each of Xxxxxxx Xxxxx and First Trust waives all right
to trial by jury in any proceeding (whether based upon contract, tort or
otherwise) in any way arising out of or relating to this Agreement.
First Trust agrees that a final judgment in any proceeding or
counterclaim brought in any such court shall be conclusive and binding
upon First Trust and may be enforced in any other courts to the
jurisdiction of which First Trust is or may be subject, by suit upon
such judgment.
11. This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. This Agreement (including the attached Indemnification Agreement)
embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or any
other provision of this Agreement, which will remain in full force and
effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both Xxxxxxx Xxxxx
and First Trust.
13. All notices required or permitted to be sent under this Agreement shall
be sent, if to First Trust:
First Trust Advisors L.P.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attention: W. Xxxxx Xxxxxxx
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx
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or such other name or address as may be given in writing to the other
parties. Any notice shall be deemed to be given or received on the third
day after deposit in the US mail with certified postage prepaid or when
actually received, whether by hand, express delivery service or
facsimile transmission, whichever is earlier.
14. This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute
one and the same agreement.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Additional Compensation Agreement as of the date first above written.
FIRST TRUST ADVISORS X.X. XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: By:
----------------------------- ---------------------------------
Name: Name:
Title: Title:
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XXXXXXX XXXXX & CO. INDEMNIFICATION AGREEMENT
May [___], 2004
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") to advise and assist the
undersigned (together with its affiliates and subsidiaries, referred to as the
"Company") with the matters set forth in the Additional Compensation Agreement
dated May [___], 2004 between the Company and Xxxxxxx Xxxxx (the "Agreement"),
in the event that Xxxxxxx Xxxxx becomes involved in any capacity in any claim,
suit, action, proceeding, investigation or inquiry (including, without
limitation, any shareholder or derivative action or arbitration proceeding)
(collectively, a "Proceeding") in connection with any matter in any way relating
to or referred to in the Agreement or arising out of the matters contemplated by
the Agreement, the Company agrees to indemnify, defend and hold Xxxxxxx Xxxxx
harmless to the fullest extent permitted by law, from and against any losses,
claims, damages, liabilities and expenses in connection with any matter in any
way relating to or referred to in the Agreement or arising out of the matters
contemplated by the Agreement, except to the extent that it shall be determined
by a court of competent jurisdiction in a judgment that has become final in that
it is no longer subject to appeal or other review, that such losses, claims,
damages, liabilities and expenses resulted solely from the gross negligence or
willful misconduct of Xxxxxxx Xxxxx. In addition, in the event that Xxxxxxx
Xxxxx becomes involved in any capacity in any Proceeding in connection with any
matter in any way relating to or referred to in the Agreement or arising out of
the matters contemplated by the Agreement, the Company will reimburse Xxxxxxx
Xxxxx for its legal and other expenses (including the cost of any investigation
and preparation) as such expenses are incurred by Xxxxxxx Xxxxx in connection
therewith. If such indemnification were not to be available for any reason, the
Company agrees to contribute to the losses, claims, damages, liabilities and
expenses involved (i) in the proportion appropriate to reflect the relative
benefits received or sought to be received by the Company and its stockholders
and affiliates and other constituencies, on the one hand, and Xxxxxxx Xxxxx, on
the other hand, in the matters contemplated by the Agreement or (ii) if (but
only if and to the extent) the allocation provided for in clause (i) is for any
reason held unenforceable, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) but also the relative fault
of the Company and its stockholders and affiliates and other constituencies, on
the one hand, and the party entitled to contribution, on the other hand, as well
as any other relevant equitable considerations. The Company agrees that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Company and its stockholders and affiliates, on the one hand,
and the party entitled to contribution, on the other hand, of a transaction as
contemplated shall be deemed to be in the same proportion that the total value
received or paid or contemplated to be received or paid by the Company or its
stockholders or affiliates and other constituencies, as the case may be, as a
result of or in connection with the transaction (whether or not consummated) for
which Xxxxxxx Xxxxx has been retained to perform financial services bears to the
fees paid to Xxxxxxx Xxxxx under the Agreement; provided, that in no event shall
the Company contribute less than the amount necessary to assure that Xxxxxxx
Xxxxx is not liable for losses, claims, damages, liabilities and expenses in
excess of the amount of fees actually received by Xxxxxxx Xxxxx pursuant to the
Agreement. Relative fault shall be determined by reference to, among other
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things, whether any alleged untrue statement or omission or any other alleged
conduct relates to information provided by the Company or other conduct by the
Company (or its employees or other agents), on the one hand, or by Xxxxxxx
Xxxxx, on the other hand. The Company will not settle any Proceeding in respect
of which indemnity may be sought hereunder, whether or not Xxxxxxx Xxxxx is an
actual or potential party to such Proceeding, without Xxxxxxx Xxxxx'x prior
written consent. For purposes of this Indemnification Agreement, Xxxxxxx Xxxxx
shall include Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, any of its affiliates, each other person, if any, controlling
Xxxxxxx Xxxxx or any of its affiliates, their respective officers, current and
former directors, employees and agents, and the successors and assigns of all of
the foregoing persons. The foregoing indemnity and contribution agreement shall
be in addition to any rights that any indemnified party may have at common law
or otherwise.
The Company agrees that neither Xxxxxxx Xxxxx nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company in connection with or as a result of either Xxxxxxx Xxxxx'x engagement
under the Agreement or any matter referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Company resulted solely from the gross
negligence or willful misconduct of Xxxxxxx Xxxxx in performing the services
that are the subject of the Agreement.
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET FORTH BELOW,
NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER THAN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH
COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS,
AND THE COMPANY AND XXXXXXX XXXXX CONSENT TO THE JURISDICTION OF SUCH COURTS AND
PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY HEREBY CONSENTS TO PERSONAL
JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM ARISING OUT OF
OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST
XXXXXXX XXXXX OR ANY INDEMNIFIED PARTY. EACH OF XXXXXXX XXXXX AND THE COMPANY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY PROCEEDING OR CLAIM
ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY SUCH
COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND MAY BE ENFORCED IN
ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT,
BY SUIT UPON SUCH JUDGMENT.
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The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of Xxxxxxx Xxxxx'x engagement. This
Indemnification Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.
Very truly yours,
FIRST TRUST ADVISORS L.P.
By: ______________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By ______________________
Name:
Title:
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