STRUCTURING FEE AGREEMENT
[ ], 2010
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated [ ],
2010 (the "Underwriting Agreement"), by and among First Trust High Income
Long/Short Fund, a Massachusetts business trust (the "Fund"), First Trust
Advisors L.P., an Illinois limited partnership, MacKay Xxxxxxx LLC, a Delaware
limited liability company (together, the "Advisers"), and each of the
Underwriters named in Schedule I therein, severally, with respect to the issue
and sale of the Fund's Securities (the "Offering"), as described therein.
Capitalized terms used herein and not otherwise defined shall have the meanings
given to them in the Underwriting Agreement.
1. Fee. In consideration of your services in offering advice relating to
the structure and design of the Fund and the organization of the Fund as well as
services related to the sale and distribution of the Fund's Securities,
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, which services
may be completed by your affiliate in your sole discretion, the Advisers shall
pay a fee to you in the aggregate amount of $[ ] (the "Fee"). The
Fee shall be paid on or before the Closing Date (as defined in the Underwriting
Agreement). The payment shall be made by wire transfer to the order of Citigroup
Global Markets Inc. The Advisers acknowledge that the Fee is in addition to any
compensation you earn in connection with your role as an underwriter to the Fund
in the Offering, which services are distinct from and in addition to the
marketing and structuring services described above.
2. Term. This Agreement shall terminate upon the payment of the entire
amount of the Fee, as specified in Section 1 hereof.
3. Indemnification. The Advisers agree 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.
4. Not an Adviser; No Fiduciary Duty. The Advisers acknowledge that you
are 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 you, and
you are not agreeing hereby, 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. The Advisers hereby acknowledge that your engagement
under this Agreement is as an independent contractor and not in any other
capacity, including as a fiduciary. Furthermore, the Advisers agree that they
are solely responsible for making their own judgments in connection with the
matters covered by this Agreement (irrespective of whether you have advised or
are currently advising the Advisers on related or other matters). In addition,
nothing in this Agreement shall be construed to constitute you as the agent or
employee of the Advisers or the Advisers as your agent or employee, and neither
party shall make any representation to the contrary. It is understood that you
are engaged hereunder solely to provide the services described above to the
Advisers and that you are not acting as an agent or fiduciary of, and you shall
not have any duties or liability to, the current or future partners, members or
equity owners of the Advisers or any other third party in connection with its
engagement hereunder, all of which are hereby expressly waived to the extent the
Advisers have the authority to waive such duties and liabilities.
5. Not Exclusive. Nothing herein shall be construed as prohibiting you or
your affiliates from acting as an underwriter or financial adviser or in any
other capacity for any other persons (including other registered investment
companies or other investment managers). Neither this Agreement nor the
performance of the services contemplated hereunder shall be considered to
constitute a partnership, association or joint venture between you and the
Advisers.
6. Assignment. This Agreement may not be assigned by either party without
prior written consent of the other parties.
7. Amendment; Waiver. No provision of this Agreement may be amended or
waived except by an instrument in writing signed by the parties hereto.
8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
[END OF TEXT]
This Agreement shall be effective as of the date first written above.
FIRST TRUST ADVISORS L.P.
By: _______________________________
Name:
Title:
MACKAY XXXXXXX LLC
By: _______________________________
Name:
Title:
Agreed and Accepted:
CITIGROUP GLOBAL MARKETS INC.
By: ______________________________
Name:
Title:
INDEMNIFICATION AGREEMENT
[ ], 2010
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Citigroup Global Markets Inc. (the
"Bank") 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 [ ], 2010 between the Companies and the Bank (the
"Agreement"), in the event that the Bank, any of its affiliates, each other
person, if any, controlling the Bank or any of its affiliates, their respective
officers, current and former directors, employees and agents or the successors
or assigns of any of the foregoing persons (the Bank and each such other person
or entity being referred to as an "Indemnified Party") 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 the
services performed pursuant to and in accordance with the Agreement, the
Companies agree to indemnify, defend and hold each Indemnified Party harmless to
the fullest extent permitted by law, from and against any losses, claims,
damages, liabilities and expenses, including the reasonable fees and expenses of
counsel to the Indemnified Parties, 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
such losses, claims, damages, liabilities and expenses resulted primarily from
the gross negligence or willful misconduct of such Indemnified Party. In
addition, in the event that an Indemnified Party 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 such
Indemnified Party for reasonable legal and other expenses (including the cost of
any investigation and preparation) as such expenses are incurred by such
Indemnified Party in connection therewith. Promptly as reasonably practicable
after receipt by an Indemnified Party of notice of the commencement of any
Proceeding, such Indemnified Party 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 so to notify the Companies (i) will not relieve the
Companies from liability under this paragraph to the extent they 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 the Indemnified Parties
shall be selected by the Bank. The Companies may participate at their own
expense in the defense of any such action; provided, however, that counsel to
the Companies shall not (except with the consent of the Indemnified Parties)
also be counsel to the Indemnified Parties. The Companies shall not, without the
prior written consent of the Indemnified Parties, 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 the Indemnified Parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each Indemnified Party 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 any Indemnified Party.
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, on the one hand, and the Indemnified Parties, 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
Indemnified Parties, 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 Indemnified Parties, on
the other hand, of a transaction as contemplated shall be deemed to be in the
same proportion that the total value received by or paid to or contemplated to
be received by or paid to 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 the Bank has been retained to perform services
bears to the fees paid to the Bank under the Agreement; provided, that in no
event shall the Companies contribute less than the amount necessary to assure
that the Indemnified Parties are not liable for losses, claims, damages,
liabilities and expenses in excess of the amount of fees actually received by
the Bank 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 the Bank, on the other hand. Notwithstanding the
provisions of this paragraph, an Indemnified Party shall not be entitled to
contribution from the Companies if it is determined that such Indemnified Party
was guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act of 1933, as amended) and the Companies were 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 an
Indemnified Party is an actual or potential party to such Proceeding, without
the Bank's prior written consent (which consent shall not be unreasonably
withheld). 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 no Indemnified Party 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 primarily from the
gross negligence or willful misconduct of the Bank 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 WITH RESPECT TO THE SERVICES PERFORMED PURSUANT TO
AND IN ACCORDANCE WITH THE 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 COMPANIES AND THE INDEMNIFIED PARTIES
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 INDEMNIFICATION AGREEMENT IS BROUGHT BY ANY THIRD PARTY AGAINST THE BANK OR
ANY INDEMNIFIED PARTY. EACH OF THE INDEMNIFIED PARTY 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
INDEMNIFICATION AGREEMENT. THE COMPANIES AGREE THAT A FINAL JUDGMENT IN ANY
PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS
INDEMNIFICATION AGREEMENT BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND
BINDING UPON THE COMPANIES AND MAY BE ENFORCED IN ANY OTHER COURTS TO THE
JURISDICTION OF WHICH THE COMPANIES ARE OR MAY BE SUBJECT, BY SUIT UPON SUCH
JUDGMENT.
The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of the Bank's engagement under the
Agreement. 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:
Agreed and Accepted:
CITIGROUP GLOBAL MARKETS INC.
By: ______________________________
Name:
Title:
