CORPORATE FINANCE SERVICES AND CONSULTING AGREEMENT
This CORPORATE FINANCE SERVICES AND CONSULTING AGREEMENT (the
"Agreement"), dated as of April [ ], 2004, between X.X. Xxxxxxx & Sons, Inc.
("X.X. Xxxxxxx") and First Trust Advisors, L.P. ("First Trust Advisors").
WHEREAS, First Trust/Value Line(R) & Ibbotson Equity Allocation Fund
(the "Fund") is a diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and its common shares of beneficial interest, par value $0.01 per share
(the "Common Shares"), are registered under the Securities Act of 1933, as
amended;
WHEREAS, the Fund has made the public offering of the Fund's Common
Shares (the "Offering");
WHEREAS, First Trust Advisors is the investment adviser of the Fund;
WHEREAS, First Trust Advisors desires to retain X.X. Xxxxxxx, who acted
as lead underwriter in the Offering, to provide certain corporate finance and
consulting services to First Trust Advisors and to the Fund on an ongoing basis,
and X.X. Xxxxxxx is willing to render such services; and
WHEREAS, First Trust Advisors desires to provide compensation to X.X.
Xxxxxxx for providing 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 Advisors hereby employs X.X. Xxxxxxx, for the
period and on the terms and conditions set forth herein, to
provide the following services: (i) Provide relevant
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 Advisors in connection
therewith; (ii) At the request of First Trust Advisors,
provide certain economic research and statistical information
and reports, if reasonably obtainable, on behalf of First
Trust Advisors or the Fund and consult with representatives of
First Trust Advisors or the Fund, and/or Trustees of the Fund
in connection therewith, which information and reports shall
include: (a) statistical and financial market information with
respect to the Fund's market performance; and (b) comparative
information regarding the Fund and other closed-end management
investment companies with respect to (x) the net asset value
of their respective shares (as made publicly available by the
Fund and such investment companies), (y) the respective market
performance of the Fund and such other companies, and (z)
other relevant performance indicators; and (iii) Provide First
Trust Advisors with such other services in connection with the
Common Shares relating to the trading price and market price
thereof upon which First Trust Advisors and X.X. Xxxxxxx
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shall, from time to time, agree, including after-market
services designed to maintain the visibility of the Fund in
the market.
(b) At the request of First Trust Advisors, X.X. Xxxxxxx shall
limit or cease any action or service provided hereunder to the
extent and for the time period requested by First Trust
Advisors; provided, however, that pending termination of this
Agreement as provided for in Section 7 hereof, any such
limitation or cessation shall not relieve First Trust Advisors
of its payment obligations pursuant to Section 2 hereof.
(c) X.X. Xxxxxxx will promptly notify First Trust Advisors in
writing if it learns of any material inaccuracy or
misstatement in, or material omission from, any written
information provided by X.X. Xxxxxxx to First Trust Advisors
in connection with the performance of services by X.X. Xxxxxxx
under this Agreement. X.X. Xxxxxxx agrees that in performing
its services under this Agreement, it shall comply in all
material respects with all applicable laws, rules and
regulations.
2. First Trust Advisors shall pay to X.X. Xxxxxxx a fee payable quarterly
in arrears commencing on the date hereon at an annualized rate of 0.15%
of the Fund's average daily net assets for a term as described in
Section 7 hereof. All quarterly fees payable hereunder shall be paid to
X.X. Xxxxxxx within 15 days following the end of each quarter. Such fee
payments shall be subject to the sales charge limits of the National
Association of Securities Dealer, Inc. (the "NASD"), and shall not
exceed [ ]% of the aggregate offering price of the Common Shares in the
Offering (the "Maximum Fee Amount").
3. First Trust Advisors 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 Fee Amount described in
paragraph 2 above.
4. First Trust Advisors acknowledges that the services of X.X. Xxxxxxx
provided for hereunder do not include any advice as to the value of
securities or regarding the advisability of purchasing or selling any
securities, in each case 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 X.X. Xxxxxxx, and X.X. Xxxxxxx is
not agreeing, to: (i) furnish any advice or make any recommendations
regarding the purchase or sale of portfolio securities or (ii) render
any opinions, valuations of portfolio securities or recommendations of
any kind in connection with providing the services described in Section
1 hereof, to the extent that any such services would constitute
investment advisory or investment banking services, it being understood
between the parties hereto that any such investment advisory or
investment banking services if, and to the extent, agreed to be
performed by X.X. Xxxxxxx, shall be the subject of a separate agreement
with First Trust Advisors.
5. Nothing herein shall be construed as prohibiting X.X. Xxxxxxx or any of
its respective affiliates from providing similar or other services to
any other clients (including other registered investment companies or
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other investment advisers), so long as X.X. Xxxxxxx'x services to First
Trust Advisors are not impaired thereby. Neither this Agreement nor the
performance of the services contemplated hereunder shall be considered
to constitute a partnership, association or joint venture between X.X.
Xxxxxxx and First Trust Advisors. In addition, nothing in this
Agreement shall be construed to constitute X.X. Xxxxxxx as the agent or
employee of First Trust Advisors or First Trust Advisors as the agent
or employee of X.X. Xxxxxxx, and neither party shall make any
representation to the contrary. It is understood that X.X. Xxxxxxx is
being engaged hereunder solely to provide the services described above
to First Trust Advisors and that X.X. Xxxxxxx is not acting as an agent
or fiduciary of, and X.X. Xxxxxxx shall not have any duties or
liability to the current or future shareholders of the Fund or any
other third party in connection with its engagement hereunder, all of
which are hereby expressly waived to the extent First Trust Advisors
has the authority to waive such duties and liabilities.
6. First Trust Advisors will furnish X.X. Xxxxxxx with such information as
X.X. Xxxxxxx reasonably believes appropriate to the performance of its
obligations hereunder (all such information so furnished being the
"Information"). First Trust Advisors recognizes and confirms that X.X.
Xxxxxxx (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 Advisors' knowledge, the
Information to be furnished by First Trust Advisors 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.
First Trust Advisors will promptly notify X.X. Xxxxxxx if it learns of
any material inaccuracy or misstatement in, or material omission from,
any Information delivered to such party.
7. The term of this Agreement shall commence upon the date referred to
above and shall be in effect only so long as First Trust Advisors (or
any affiliate or successor in interest) acts as the investment adviser
to the Fund pursuant to the Advisory Agreement (as such term is defined
in the Underwriting Agreement, dated April [ ], 2004, by and among the
Fund, First Trust Advisors and each of the Underwriters named therein),
as such Advisory Agreement (or other subsequent advisory agreement with
First Trust Advisors or any successor thereto) may be renewed from time
to time pursuant to the 1940 Act; provided, however, that this
Agreement may be terminated by X.X. Xxxxxxx upon 60 days notice to
First Trust Advisors following a determination in good faith by X.X.
Xxxxxxx that the continuing receipt of the fees provided for would
exceed the Maximum Fee Amount.
8. First Trust Advisors agrees that X.X. Xxxxxxx shall not have any
liability to First Trust Advisors or the Fund for any act or omission
to act by X.X. Xxxxxxx in the course of its performance under this
Agreement, in the absence of gross negligence or willful misconduct on
the part of X.X. Xxxxxxx. First Trust Advisors agrees that it shall
provide indemnification to X.X. Xxxxxxx as set forth in the
Indemnification Agreement appended hereto.
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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 Advisors and
X.X. Xxxxxxx consent to the jurisdiction of such courts and personal
service with respect thereto. Each of First Trust Advisors and X.X.
Xxxxxxx 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. Each of First Trust Advisors and X.X.
Xxxxxxx agrees that a final judgment in any proceeding or counterclaim
brought in any such court shall be conclusive and binding upon such
party and may be enforced in any other courts to the jurisdiction of
which such party 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 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 First
Trust Advisors and X.X. Xxxxxxx.
13. All notices required or permitted to be sent under this Agreement shall
be sent, if to First Trust Advisors:
First Trust Advisors, L.P.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx--General Counsel
or if to X.X. Xxxxxxx:
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attention: Investment Banking--Corporate Finance
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.
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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Corporate Finance Services and Consulting Agreement as of the date first above
written.
FIRST TRUST ADVISORS, L.P. A.G. XXXXXXX & SONS, INC.
By: _____________________________ By: ___________________________
Name: Name:
Title: Title:
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INDEMNIFICATION AGREEMENT
-------------------------
X.X. Xxxxxxx & Sons, Inc.
Xxx Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
In connection with the engagement of X.X. Xxxxxxx & Sons, Inc.
("X.X. Xxxxxxx") to provide services to the undersigned (together with its
affiliates and subsidiaries, referred to as the "Company") in connection with
the matters set forth in the Corporate Finance Services and Consulting Agreement
dated April [ ], 2004 (the "Agreement"), between the Company and X.X. Xxxxxxx,
in the event that X.X. 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)
(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, including, without limitation, related services and activities
prior to the date of the Agreement, the Company agrees to indemnify, defend and
hold X.X. Xxxxxxx 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, 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 such losses, claims, damages, liabilities and expenses
resulted from the gross negligence or willful misconduct of X.X. Xxxxxxx. In
addition, in the event that X.X. Xxxxxxx 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,
including, without limitation, related services and activities prior to the date
of the Agreement, the Company will reimburse X.X. Xxxxxxx for its legal and
other expenses (including the cost of any investigation and preparation) as such
expenses are reasonably incurred by X.X. Xxxxxxx 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 shareholders and affiliates and
other constituencies, on the one hand, and X.X. Xxxxxxx, on the other hand, in
the matters contemplated by the Agreement or (ii) if (but only if and to the
extent that) 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 shareholders 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 shareholders 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
shareholders or affiliates and other constituencies, as the case may be, as a
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result of or in connection with the transaction (whether or not consummated) for
which X.X. Xxxxxxx has been retained to perform services bears to the fees paid
to X.X. Xxxxxxx under the Agreement; provided, that in no event shall the
Company contribute less than the amount necessary to assure that X.X. Xxxxxxx is
not liable for losses, claims, damages, liabilities and expenses in excess of
the amount of fees actually received by X.X. Xxxxxxx 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 Company or other conduct by the Company (or its
employees or other agents), on the one hand, or by X.X. Xxxxxxx, on the other
hand. The Company shall not be liable under this Indemnification Agreement to
X.X. Xxxxxxx regarding any settlement or compromise or consent to the entry of
any judgment with respect to any Proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the Company is an actual
or potential party to such Proceeding) unless such settlement, compromise or
judgment is consented to by the Company. The Company shall not, without the
prior written consent of X.X. Xxxxxxx, settle or compromise or consent to the
entry of any judgment with respect to any Proceeding in respect of which
indemnification or contribution could be sought under this Indemnification
Agreement (whether or not X.X. Xxxxxxx is an actual or potential party thereto),
unless such settlement, compromise or consent (i) includes an unconditional
release of X.X. Xxxxxxx from all liability arising out of such Proceeding 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 X.X. Xxxxxxx. For purposes of this
Indemnification Agreement, X.X. Xxxxxxx shall include any of its affiliates,
each other person, if any, controlling X.X. Xxxxxxx 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 X.X. Xxxxxxx 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 X.X. Xxxxxxx'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 from the gross
negligence or willful misconduct of X.X. Xxxxxxx in performing the services that
are the subject of the Agreement.
Notwithstanding any provision contained herein, in no event shall
X.X. Xxxxxxx be entitled to indemnification by the Company hereunder from and
against any losses, claims, damages, liabilities or expenses in respect of which
indemnity may be sought under Section 9 of the Underwriting Agreement.
For clarification, the parties to this Indemnification Agreement
agree that the term "affiliate" as used in the definition of "Company" herein
does not include any registered investment company for which First Trust
Advisors, L.P. serves as investment adviser.
Page 7
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 X.X. XXXXXXX 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 X.X. XXXXXXX OR ANY INDEMNIFIED PARTY. X.X. XXXXXXX AND THE
COMPANY WAIVE 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 X.X. Xxxxxxx'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:
X.X. XXXXXXX & SONS, INC.
By: _______________________
Name:
Title:
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