STRUCTURING FEE AGREEMENT
STRUCTURING FEE AGREEMENT (the "Agreement"), dated as of [ ],
2010 between Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx
Xxxxx"), First Trust Advisors L.P. ("First Trust Advisors") and MacKay Xxxxxxx
LLC ("XxxXxx", and together with First Trust Advisors, the "Advisors").
WHEREAS, First Trust High Income Long/Short Fund (the "Fund") is a
newly-organized, diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and certain common shares of beneficial interest, par value $0.01 per
share (the "Common Stock"), are registered under the Securities Act of 1933, as
amended;
WHEREAS, First Trust Advisors is the investment adviser of the Fund;
WHEREAS, MacKay is the sub-advisor of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as an underwriter in an offering of the
Fund's Common Stock; and
WHEREAS, the Advisors desire to provide additional compensation to Xxxxxxx
Xxxxx for providing the advice and services described below;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. In consideration of Xxxxxxx Xxxxx'x providing advice relating to the
structure and design and the organization of the Fund as well as services
related to the sale and distribution of the Fund's Common Stock, including
without limitation, views from an investor market and distribution
perspective on (i) investment policies to consider in light of today's
market, (ii) the amount and nature of economic and/or financial leverage
that could be accepted by the potential investor community, (iii)
marketing issues with respect to investments in non-investment grade
securities, (iv) marketing issues with respect to utilization of a
long/short strategy and (v) the overall marketing and positioning for the
Fund's initial public offering, the Advisors shall pay Xxxxxxx Xxxxx a fee
in the aggregate amount of $[ ], which is equal to [(black
circle)]% of the total price to the public of the Fund's Common Stock sold
by Xxxxxxx Xxxxx pursuant to the prospectus dated [ ], 2010
(the "Prospectus") (the "Fee"). The Fee shall be paid on or before the
Closing Date (as defined in the Underwriting Agreement, dated [(black
circle)], 2010, by and among the Fund, the Advisors and each of the
Underwriters named therein (the "Underwriting Agreement")).The fee
hereunder shall not exceed [ ]% of the total price to the
public of the Fund's Common Stock issued by the Fund pursuant to the
Prospectus. The sum total of this Fee, plus the structuring fees and sales
incentive fee paid to certain other underwriters in connection with this
offering, plus the underwriters' counsel fees paid by the Fund and
commissions paid to certain registered personnel of its broker-dealer
affiliates shall not exceed [ ]% of the total price of the
Fund's Common Stock sold by the Fund pursuant to the Prospectus.
2. The Advisors acknowledge that Xxxxxxx Xxxxx did not provide and is not
providing any advice hereunder 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 the transactions contemplated herein.
3. 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
advisers).
4. This Agreement shall terminate upon the payment of the entire amount of
the Fee, as specified in Section 1 hereof or upon the termination of the
Underwriting Agreement without common shares having been delivered and
paid for. If this Agreement is terminated the Fund shall reimburse Xxxxxxx
Xxxxx only for all of its accountable out-of-pocket expenses actually
incurred in connection with this Agreement.
5. The Advisors have furnished Xxxxxxx Xxxxx with such information as Xxxxxxx
Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). The Advisors recognize
and confirm that Xxxxxxx Xxxxx (a) has used and relied 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. The Information furnished by the Advisors, when
delivered, was true and correct in all material respects and did not
contain any material misstatement of fact or omit to state any material
fact necessary to make the statements contained therein not misleading.
The Advisors will promptly notify Xxxxxxx Xxxxx if they learn of any
material inaccuracy or misstatement in, or material omission from, any
Information delivered to Xxxxxxx Xxxxx. Xxxxxxx Xxxxx agrees to keep such
Information confidential to the extent permitted by law.
6. The Advisors agree that Xxxxxxx Xxxxx shall have no liability to the
Advisors 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. The
Advisors agree to the terms 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.
7. 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.
8. 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 Advisors and Xxxxxxx Xxxxx consent
to the jurisdiction of such courts and personal service with respect
thereto. Each of Xxxxxxx Xxxxx and the Advisors 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. The Advisors and
Xxxxxxx Xxxxx agree that a final judgment in any proceeding or
counterclaim brought in any such court shall be conclusive and binding
upon the Advisors and Xxxxxxx Xxxxx and may be enforced in any other
courts to the jurisdiction of which the Advisors and Xxxxxxx Xxxxx are or
may be subject, by suit upon such judgment.
9. This Agreement may not be assigned by either party without the prior
written consent of the other parties.
10. 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 the Advisors.
11. All notices required or permitted to be sent under this Agreement shall be
sent, if to First Trust Advisors:
[ ]
Attention: [ ]
or if to MacKay Xxxxxxx
[ ]
Attention: [ ]
or if to Xxxxxxx Xxxxx:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxx, Director, Global Wealth Management
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 U.S. mail with certified postage prepaid or when
actually received, whether by hand, express delivery service or facsimile
transmission, whichever is earlier.
12. 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.
IN WITNESS WHEREOF, the parties hereto have duly executed this Structuring
Fee Agreement as of the date first above written.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: _______________________________
Name:
Title:
FIRST TRUST ADVISORS L.P.
By: _______________________________
Name:
Title:
MACKAY XXXXXXX LLC
By: _______________________________
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
INDEMNIFICATION AGREEMENT
[ ], 2010
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, First Trust Advisors L.P. and MacKay Xxxxxxx LLC, (together with
their affiliates and subsidiaries, referred to as the "Companies") with respect
to the matters set forth in the Structuring Fee Agreement dated [(black
circle)], 2010 between the Companies 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") with respect to services performed pursuant to and in accordance
with the Agreement, the Companies agree 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 with respect to services
performed pursuant to and in accordance with 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 with
respect to the services performed pursuant to and in accordance with the
Agreement, the Companies will reimburse Xxxxxxx Xxxxx for its reasonable legal
and other expenses (including the cost of any investigation and preparation) as
such expenses are incurred by Xxxxxxx Xxxxx in connection therewith. Promptly as
reasonably practicable after receipt by Xxxxxxx Xxxxx of notice of the
commencement of any Proceeding, Xxxxxxx Xxxxx will, if a claim in respect
thereof is to be made under this paragraph, notify the Companies in writing of
the commencement thereof; but the failure to so notify the Companies (i) will
not relieve the Companies from liability under this paragraph to the extent the
Companies are not materially prejudiced as a result thereof and (ii) in any
event shall not relieve the Companies from any liability which they may have
otherwise than on account of this Indemnification Agreement. Counsel to Xxxxxxx
Xxxxx shall be selected by Xxxxxxx Xxxxx. An indemnifying party may participate
at its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of Xxxxxxx
Xxxxx) also be counsel to Xxxxxxx Xxxxx. No indemnifying party shall, without
the prior written consent of Xxxxxxx Xxxxx, settle or compromise or consent to
the entry of any judgment with respect to any litigation, or any investigation
or proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution could
be sought hereunder (whether or not Xxxxxxx Xxxxx is an actual or potential
party thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of Xxxxxxx Xxxxx from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of Xxxxxxx Xxxxx. If such indemnification were not to be available for
any reason, the Companies agree 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 Companies and
their 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 Companies and their stockholders and affiliates, on the
one hand, and the party entitled to contribution, on the other hand, as well as
any other relevant equitable considerations. The Companies agree that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Companies and their 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
Companies or their stockholders or affiliates, 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 services bears to the fees paid to
Xxxxxxx Xxxxx under the Agreement; provided, that in no event shall the
Companies 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 things, whether
any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Companies or other conduct by the Companies (or
their employees or other agents), on the one hand, or by Xxxxxxx Xxxxx, on the
other hand. Notwithstanding the provisions of this paragraph, Xxxxxxx Xxxxx
shall not be entitled to contribution from the Companies if it is determined
that Xxxxxxx Xxxxx was guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act of 1933, as amended) and each of
the Companies was not guilty of such fraudulent misrepresentation. The Companies
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 Companies agree that neither Xxxxxxx Xxxxx nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Companies or any person asserting claims on behalf of or in right of the
Companies with respect to the services performed pursuant to and in accordance
with 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 Companies 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 WITH
RESPECT TO THE SERVICES PERFORMED PURSUANT TO AND IN ACCORDANCE WITH THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 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 COMPANIES AND
XXXXXXX XXXXX CONSENT TO THE JURISDICTION OF SUCH COURTS AND PERSONAL SERVICE
WITH RESPECT THERETO. THE COMPANIES HEREBY CONSENT 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 COMPANIES 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. EACH
OF XXXXXXX XXXXX AND THE COMPANIES 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 XXXXXXX XXXXX AND
THE COMPANIES, AS THE CASE MAY BE, AND MAY BE ENFORCED IN ANY OTHER COURTS TO
THE JURISDICTION OF WHICH XXXXXXX XXXXX AND THE COMPANIES, AS THE CASE MAY BE,
IS OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
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:
MACKAY XXXXXXX LLC
By: ______________________________
Name:
Title:
Accepted and agreed to as of
the date first written above:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: ______________________________
Name:
Title:
