INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT made this 26th day of November, 2012, by
and between FIRST TRUST MLP AND ENERGY INCOME FUND, a Massachusetts business
trust (the "Trust"), and FIRST TRUST ADVISORS L.P., an Illinois limited
partnership (the "Adviser") and registered under the Investment Advisors Act of
1940, as amended (the "Advisers Act").
W I T N E S S E T H:
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. The Trust hereby engages the Adviser to act as the investment adviser
for, and to manage the investment and reinvestment of the assets of, the Trust
in accordance with the Trust's investment objectives and policies and
limitations, and to administer the Trust's affairs to the extent requested by
and subject to the supervision of the Board of Trustees of the Trust (the
"Board of Trustees") for the period and upon the terms herein set forth. The
investment of the Trust's assets shall be subject to the Trust's policies,
restrictions and limitations with respect to portfolio investments as set forth
in the Trust's then current registration statement under the Investment Company
Act of 1940 (the "1940 Act"), and all applicable laws and the regulations of
the Securities and Exchange Commission ("SEC") relating to the management of
registered closed-end management investment companies.
The Adviser accepts such employment and agrees during such period to
render such services, to furnish office facilities and equipment and clerical,
bookkeeping and administrative services (other than such services, if any,
provided by the Trust's transfer agent, administrator or other service
providers) for the Trust, to permit any of its officers or employees to serve
without compensation as trustees or officers of the Trust if elected or
appointed to such positions, and to assume the obligations herein set forth for
the compensation herein provided. The Adviser shall at its own expense furnish
all executive and other personnel, office space, and office facilities required
to render the investment management and administrative services set forth in
this Agreement. In the event that the Adviser pays or assumes any expenses of
the Trust not required to be paid or assumed by the Adviser under this
Agreement, the Adviser shall not be obligated hereby to pay or assume the same
or similar expense in the future; provided that nothing contained herein shall
be deemed to relieve the Adviser of any obligation to the Trust under any
separate agreement or arrangement between the parties.
2. The Adviser shall, for all purposes herein provided, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall neither have the authority to act for nor represent the Trust in any way,
nor otherwise be deemed an agent of the Trust.
3. For the services rendered, facilities provided and charges assumed and
paid by the Adviser hereunder, the Trust will pay to the Adviser, at the end of
each calendar month, and the Adviser agrees to accept as full compensation
therefor, an investment management fee equal to the annual rate of 1.00% of the
Trust's Managed Assets, as such term is defined herein. For purposes of
calculating the management fee, "Managed Assets" means the average daily gross
asset value of the Trust (which includes assets attributable to the Trust's
Preferred Shares of beneficial interest (as such term is defined in the Trust's
prospectus), if any, and the principal amount of any borrowings), minus the sum
of the Trust's accrued and unpaid dividends on any outstanding Preferred Shares
and accrued liabilities (other than the principal amount of any borrowings of
money incurred, or of commercial paper or notes issued by the Trust). For
purposes of determining Managed Assets, the liquidation preference of any
outstanding Preferred Shares of the Trust is not treated as a liability.
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 shall have been in effect during the month and year,
respectively. The services of the Adviser to the Trust under this Agreement are
not to be deemed exclusive, and the Adviser shall be free to render similar
services or other services to others so long as its services hereunder are not
impaired thereby.
4. The Adviser shall arrange for suitably qualified officers or employees
of the Adviser to serve, without compensation from the Trust, as trustees,
officers or agents of the Trust, if duly elected or appointed to such
positions, and subject to their individual consent and to any limitations
imposed by law.
5. For purposes of this Agreement, brokerage commissions paid by the Trust
upon the purchase or sale of the Trust's portfolio securities shall be
considered a cost of securities of the Trust and shall be paid by the Trust.
6. The Adviser is authorized to select the brokers or dealers that will
execute the purchases and sales of the Trust's securities on behalf of the
Trust, and is directed to use its commercially reasonable efforts to obtain
best execution, which includes most favorable net results and execution of the
Trust'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 Trust's Board
of Trustees and to the extent permitted by and in conformance with applicable
law and the rules and regulations thereunder (including Rule 17e-1 under the
1940 Act), the Adviser may select brokers or dealers affiliated with the
Adviser. It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust, or be in breach
of any obligation owing to the Trust under this Agreement, or otherwise, solely
by reason of its having caused the Trust to pay a member of a securities
exchange, a broker or a dealer a commission for effecting a securities
transaction for the Trust in excess of the amount of commission another member
of an exchange, broker or dealer would have charged if the Adviser determines
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 Adviser's overall
responsibilities with respect to its accounts, including the Trust, as to which
it exercises investment discretion.
In addition, the Adviser may, to the extent permitted by applicable law
and the rules and regulations thereunder, aggregate purchase and sale orders of
securities with similar orders being made simultaneously for other accounts
managed by the Adviser or its affiliates, if in the Adviser's reasonable
judgment such aggregation shall result in an overall economic benefit to the
Trust, 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 Trust occurs as part of any aggregate sale or purchase orders, the
objective of the 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 Trust and other accounts in an equitable
manner. Nevertheless, the Trust acknowledges that under some circumstances,
such allocation may adversely affect the Trust with respect to the price or
size of the securities positions obtainable or salable. Whenever the Trust and
one or more other investment advisory clients of the Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in a manner believed by the 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 Adviser and its affiliates may purchase securities of an
issuer for one client and at approximately the same time recommend selling or
sell the same or similar types of securities for another client.
The Adviser will not arrange purchases or sales of securities between the
Trust and other accounts advised by the Adviser or its affiliates unless (a)
such purchases or sales are in accordance with applicable law and the rules and
regulations thereunder (including Rule 17a-7 under the 0000 Xxx) and the
Trust's policies and procedures, (b) the Adviser determines the purchase or
sale is in the best interests of the Trust, and (c) the Trust's Board of
Trustees has approved these types of transactions.
To the extent the Trust seeks to adopt, amend or eliminate any objectives,
policies, restrictions or procedures in a manner that modifies or restricts the
Adviser's authority regarding the execution of the Trust's portfolio
transactions, the Trust agrees to use commercially reasonable efforts to
consult with the Adviser regarding the modifications or restrictions prior to
such adoption, amendment or elimination.
The Adviser will communicate to the officers and trustees of the Trust
such information relating to transactions for the Trust as they may reasonably
request. In no instance will portfolio securities be purchased by or sold to
the Adviser or any affiliated person of either the Trust or the Adviser, except
as may be permitted under the 1940 Act, the rules and regulations thereunder or
any applicable exemptive orders.
The 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 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 Trust and communicated
to the Adviser and, (iii) conduct its activities under this Agreement in all
material respects in accordance with any applicable regulations of any
governmental authority pertaining to its investment advisory activities;
(c) will report regularly to the Board of Trustees (generally on a
quarterly basis) and will make appropriate persons available for the purpose of
reviewing with representatives of the Board of Trustees on a regular basis at
reasonable times the management of the Trust, including, without limitation,
review of the general investment strategies of the Trust, the performance of
the Trust'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 Board of
Trustees; and
(d) will prepare and maintain such books and records with respect to the
Trust's securities and other transactions as required under applicable law and
will prepare and furnish the Trust's Board of Trustees such periodic and
special reports as the Board of Trustees may reasonably request. The Adviser
further agrees that all records which it maintains for the Trust are the
property of the Trust and the Adviser will surrender promptly to the Trust any
such records upon the request of the Trust (provided, however, that Adviser
shall be permitted to retain copies thereof); and shall be permitted to retain
originals (with copies to the Trust) to the extent required under Rule 204-2
under the Investment Advisers Act of 1940 or other applicable law and the rules
and regulations thereunder.
7. The Adviser agrees to pay (i) all organization costs and (ii) all
offering costs of the Trust (other than sales load but including the
reimbursement of underwriting expenses as described in the Trust's prospectus)
that exceed $.04 per Common Share (as described in the Trust's prospectus). The
terms "organization costs" and "offering costs" shall have the meanings
ascribed to them in Sections 8.17-8.25 of the AICPA Audit and Accounting Guide,
Audits for Investment Companies, with Conforming Changes as of [May 1, 2007].
8. Subject to applicable statutes and regulations, it is understood that
officers, trustees, or agents of the Trust are, or may be, interested persons
(as such term is defined in the 1940 Act and rules and regulations thereunder)
of the Adviser as officers, directors, agents, shareholders or otherwise, and
that the officers, directors, shareholders and agents of the Adviser may be
interested persons of the Trust otherwise than as trustees, officers or agents.
9. The Adviser shall not be liable for any loss sustained by reason of the
purchase, sale or retention of any security, whether or not such purchase, sale
or retention shall have been based upon the investigation and research made by
any other individual, firm or corporation, if such recommendation shall have
been selected with due care and in good faith, except loss resulting from
willful misfeasance, bad faith, or gross negligence on the part of the Adviser
in the performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
10. Subject to obtaining the initial and periodic approvals required under
Section 15 of the 1940 Act (provided shareholder approval will not be required
if an exemption by rule, order or other applicable law is available), the
Adviser may retain one or more sub-advisers at the Adviser's own cost and
expense for the purpose of furnishing one or more of the services described in
Section 1 hereof with respect to the Trust. Retention of a sub-adviser shall in
no way reduce the responsibilities or obligations of the Adviser under this
Agreement and the Adviser shall be responsible to the Trust for all acts or
omissions of any sub-adviser in connection with the performance of the
Adviser's duties hereunder.
11. The Trust acknowledges that the Adviser now acts, and intends in the
future to act, as an investment adviser to other managed accounts and as
investment adviser or investment sub-adviser to one or more other investment
companies. In addition, the Trust acknowledges that the persons employed by the
Adviser to assist in the Adviser's duties under this Agreement will not devote
their full time to such efforts. It is also agreed that the Adviser may use any
supplemental research obtained for the benefit of the Trust in providing
investment advice to its other investment advisory accounts and for managing
its own accounts.
12. This Agreement shall be effective on the date provided above, provided
it has been approved in the manner required by the 1940 Act. This Agreement
shall continue in effect until the two-year anniversary of the date of its
effectiveness, unless and until terminated by either party as hereinafter
provided, and shall continue in force from year to year thereafter, but only as
long as such continuance is specifically approved, at least annually, in the
manner required by the 1940 Act.
This Agreement shall automatically terminate in the event of its
assignment, and may be terminated at any time without the payment of any
penalty by the Trust or by the Adviser upon sixty (60) days' written notice to
the other party. The Trust may effect termination by action of the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Trust, accompanied by appropriate notice. This Agreement may be terminated, at
any time, without the payment of any penalty, by the Board of Trustees, or by
vote of a majority of the outstanding voting securities of the Trust, in the
event that it shall have been established by a court of competent jurisdiction
that the Adviser, or any officer or director of the Adviser, has taken any
action which results in a breach of the material covenants of the Adviser set
forth herein. Termination of this Agreement shall not affect the right of the
Adviser to receive payments on any unpaid balance of the compensation,
described in Section 3, earned prior to such termination and for any additional
period during which the Adviser serves as such for the Trust, subject to
applicable law. The terms "assignment" and "vote of the majority of outstanding
voting securities" shall have the same meanings set forth in the 1940 Act and
the rules and regulations thereunder.
13. This Agreement may be amended or modified only by a written instrument
executed by both parties.
14. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.
15. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for receipt of such notice.
16. All parties hereto are expressly put on notice of the Trust'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. This Agreement is executed
on behalf of the Trust by the Trust's officers as officers and not individually
and the obligations imposed upon the Trust by this Agreement are not binding
upon any of the Trust's Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Trust, and persons dealing
with the Trust must look solely to the assets of the Trust for the enforcement
of any claims.
17. This Agreement shall be construed in accordance with applicable
federal law and (except as to Section 16 hereof, which shall be construed in
accordance with the laws of Massachusetts) the laws of the State of Illinois.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement
to be executed on the day and year above written.
FIRST TRUST MLP AND ENERGY INCOME FUND
By: __________________________________
Name:
Title:
ATTEST: _________________________
Name:
Title:
FIRST TRUST ADVISORS L.P.
By: __________________________________
Name:
Title:
ATTEST: _________________________
Name:
Title:
