MARKETING AND STRUCTURING
FEE AGREEMENT
[ ], 2010
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This agreement is between First Trust Advisors L.P., an Illinois limited
partnership, MacKay Xxxxxxx LLC, a Delaware limited liability company (together,
the "Companies") and Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") with
respect to First Trust High Income Long/Short Fund, a Massachusetts business
trust (the "Fund").
1. Fee. (a) In consideration of advice to the Companies relating to, but
not limited to, the design and structuring and the organization of, and
marketing assistance with respect to, the Fund and the distribution of its
common shares of beneficial interest (the "Shares"), 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 Companies shall pay a
fee to Xxxxxx Xxxxxxx in the aggregate amount of $[ ] (the "Fee").
Subject to paragraph (b), the Fee paid to Xxxxxx Xxxxxxx shall not exceed
[ ]% of the total price to the public of the Shares sold by the
Fund in its initial public offering (the "Offering").
(b) Notwithstanding paragraph (a), in the event that the Companies (or the
Fund or any person or entity affiliated with the Companies or the Fund or acting
on behalf of or at the direction of any of the foregoing) compensates or agrees
to compensate any other broker or dealer participating in the Offering (each, an
"Other Broker") for any services or otherwise in connection with the Offering or
with respect to the Fund or its Shares (excluding for this purpose any
compensation paid directly to the entire underwriting syndicate, as a group,
pursuant to the principal underwriting agreement (the "Underwriting Agreement")
relating to the Offering), whether such compensation be denominated as a fee, an
expense reimbursement, a set-off, a credit or otherwise (such compensation with
respect to any Other Broker, such Other Broker's "Other Compensation"), then the
amount of the Fee shall be increased as and to the extent necessary so that the
Fee payable to Xxxxxx Xxxxxxx hereunder, expressed as a percentage of the
aggregate price to the public of the Shares sold by Xxxxxx Xxxxxxx in the
Offering (including any Shares over-allotted by Xxxxxx Xxxxxxx in the Offering
regardless of whether the over-allotment option in the Offering is exercised),
is no less than the Other Compensation, expressed as a percentage of the
aggregate price to the public of the Shares sold by such Other Broker in the
Offering. For purposes of this paragraph (b), the number of Shares sold by
Xxxxxx Xxxxxxx shall be deemed to include one half of the number of Shares sold
by Xxxxxx Xxxxxxx Xxxxx Xxxxxx LLC, and Citigroup Global Markets Inc. shall be
deemed to have sold the other half.
(c) The Companies shall pay the Fee to Xxxxxx Xxxxxxx on or before the
Closing Date (as defined in the Underwriting Agreement) by wire transfer to the
order of Xxxxxx Xxxxxxx. The Companies acknowledge that the Fee is in addition
to any compensation Xxxxxx Xxxxxxx earns in connection with its 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 payment of the entire
amount of the Fee, as specified in Section 1 hereof.
3. Indemnification. The Companies 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 Advisor. The Companies acknowledge that Xxxxxx Xxxxxxx 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 Xxxxxx Xxxxxxx, and Xxxxxx
Xxxxxxx is 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. In addition, nothing in this Agreement shall be construed
to constitute Xxxxxx Xxxxxxx as the agent or employee of the Companies or the
Companies as the agent or employee of Xxxxxx Xxxxxxx, and neither party shall
make any representation to the contrary. It is understood that Xxxxxx Xxxxxxx is
engaged hereunder solely to provide the services described above to the
Companies and that Xxxxxx Xxxxxxx is not acting as an agent or fiduciary of, and
Xxxxxx Xxxxxxx shall not have any duties or liability to, the current or future
partners, members or equity owners of the Companies or any other third party in
connection with its engagement hereunder, all of which are hereby expressly
waived to the extent the Companies have the authority to waive such duties and
liabilities.
5. Not Exclusive. Nothing herein shall be construed as prohibiting
Xxxxxx Xxxxxxx or its affiliates from acting as an underwriter or financial
advisor 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
Xxxxxx Xxxxxxx and the Companies.
6. Assignment. This Agreement may not be assigned by either party
without prior written consent of the other party.
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 applicable to contracts
executed in and to be performed in that state.
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.
This Agreement shall be effective as of the date first written above.
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 above
written:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
----------------------------------
Name:
Title:
INDEMNIFICATION AGREEMENT
[ ], 2010
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxx Xxxxxxx & Co. Incorporated
("Xxxxxx Xxxxxxx") to advise and assist the undersigned (together with their
affiliates and subsidiaries, referred to as the "Companies") with the matters
set forth in the Marketing and Structuring Fee Agreement dated [ ],
2010 between the Companies and Xxxxxx Xxxxxxx (the "Marketing and Structuring
Fee Agreement"), in the event that Xxxxxx Xxxxxxx 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) with respect to the services performed pursuant to and
in accordance with the Marketing and Structuring Fee Agreement, the Companies
have agreed to indemnify and hold harmless Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxx'x
affiliates and their respective officers, directors, employees and agents and
each other person, if any, controlling Xxxxxx Xxxxxxx or any of Xxxxxx Xxxxxxx'x
affiliates (Xxxxxx Xxxxxxx and each such other person being an "Indemnified
Person") from and against any losses, claims, damages or liabilities related to,
arising out of or in connection with the activities (the "Activities") performed
by any Indemnified Person in connection with, or arising out of, or based upon,
the Marketing and Structuring Fee Agreement and/or any action taken by any
Indemnified Person in connection therewith (including, without limitation, any
presentation given by the Companies and an Indemnified Person relating to the
shares of common stock (the "Shares") of First Trust High Income Long/Short Fund
(the "Fund")), and will reimburse each Indemnified Person for all reasonable
expenses (including fees and expenses of counsel) as they are incurred in
connection with investigating, preparing, pursuing or defending any claim, suit,
action, proceeding, investigation or inquiry related to, arising out of or in
connection with the Activities, whether or not pending or threatened and whether
or not any Indemnified Person is a party. The Companies will not, however, be
responsible for any losses, claims, damages, liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of any Indemnified Person. The Companies also agree
that no Indemnified Person shall have any liability (whether direct or indirect,
in contract or tort or otherwise) to the Companies for or in connection with the
Activities, except for any such liability for losses, claims, damages or
liabilities incurred by the Companies that are finally judicially determined to
have resulted from the bad faith or gross negligence of such Indemnified Person.
Notwithstanding the foregoing, in no event shall the Companies be
responsible for any losses, claims, damages or liabilities to any Indemnified
Person arising from any such claim, suit, action, proceeding, investigation or
inquiry in excess of the gross proceeds received by the Fund from the initial
public offering of the Shares of the Fund (the "Offering"); provided, however,
that the Companies shall, as set forth above, indemnify and be responsible for,
regardless of the gross proceeds received by the Fund from the Offering, all
expenses (including fees and expenses of counsel) reasonably incurred in
connection with investigating, preparing, pursuing or defending any claim, suit,
action, proceeding, investigation or inquiry related to, arising out of or in
connection with the Activities, whether or not pending or threatened and whether
or not any Indemnified Person is a party, as set forth above.
The Companies will not, without Xxxxxx Xxxxxxx'x prior written consent,
which consent shall not be unreasonably withheld or delayed, settle, compromise,
consent to the entry of any judgment in or otherwise seek to terminate any
claim, suit, action, proceeding, investigation or inquiry in respect of which
indemnification may be sought hereunder (whether or not any Indemnified Person
is a party thereto) unless such settlement, compromise, consent or termination
includes a release of each Indemnified Person from any liabilities arising out
of such claim, suit, action, proceeding, investigation or inquiry. No
Indemnified Person seeking indemnification, reimbursement or contribution under
this agreement (the "Indemnification Agreement") will, without the Companies'
prior written consent, settle, compromise, consent to the entry of any judgment
in or otherwise seek to terminate any claim, suit, action, proceeding,
investigation or inquiry referred to in the first paragraph of this
Indemnification Agreement.
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 (including the net
proceeds from the Shares sold by Xxxxxx Xxxxxxx in the Offering before deducting
expenses) and their partners and affiliates and other constituencies, on the one
hand, and Xxxxxx Xxxxxxx, on the other hand, in the matters contemplated by the
Marketing and Structuring Fee 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 partners 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 Companies agree that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Companies and their partners 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 by or paid to or contemplated to be received by or paid to the
Companies or their partners 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 Xxxxxx Xxxxxxx has been retained to perform financial
services bears to the fees paid to Xxxxxx Xxxxxxx under the Marketing and
Structuring Fee Agreement; provided that in no event shall the Companies
contribute less than the amount necessary to assure that Xxxxxx Xxxxxxx is not
liable for losses, claims, damages, liabilities and expenses in excess of the
amount of fees actually received by Xxxxxx Xxxxxxx pursuant to the Marketing and
Structuring Fee 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 Xxxxxx Xxxxxxx, on the other hand.
This Indemnification Agreement, together with the Marketing and
Structuring Fee Agreement, any contemporaneous written agreements and any prior
written agreements (to the extent not superseded by this agreement) that relate
to the Offering of the Shares, represents the entire agreement between the
Companies and the Indemnified Parties with respect to the marketing and
structuring fee paid to Xxxxxx Xxxxxxx under the Marketing and Structuring Fee
Agreement.
The Companies acknowledge that in connection with the Offering of the
Shares: (i) Xxxxxx Xxxxxxx has acted at arms length, is not an agent of, and
owes no fiduciary duties to, the Companies, the Fund or any person affiliated
with the Fund or the Companies, (ii) Xxxxxx Xxxxxxx owes the Companies only
those duties and obligations set forth in this Indemnification Agreement and
(iii) Xxxxxx Xxxxxxx may have interests that differ from those of the Companies.
The Companies waive to the full extent permitted by applicable law any claims
any of the Companies, the Fund or any person affiliated with the Companies or
the Fund may have against Xxxxxx Xxxxxxx arising from an alleged breach of
fiduciary duty in connection with the offering of the Shares.
The provisions of this Indemnification Agreement shall apply to the
Activities and any modification thereof and shall remain in full force and
effect regardless of any termination or the completion of Xxxxxx Xxxxxxx'x
services under the Marketing and Structuring Fee Agreement.
This Indemnification Agreement may not be assigned by either party without
prior written consent of the other parties. No provision of this Indemnification
Agreement may be amended or waived except by an instrument in writing signed by
the parties hereto. This Indemnification Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts executed in and to be performed in that state. This Indemnification
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 Indemnification
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof.
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 above
written:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-----------------------------------
Name:
Title:
