STRUCTURING FEE AGREEMENT
[ ], 2010
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 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 (the "FUND"), First Trust Advisors L.P. (the "ADVISER"), MacKay
Xxxxxxx LLC (the "SUBADVISER", together with the Adviser, the "ADVISERS") and
each of the Underwriters named therein, severally, with respect to the issue and
sale of the Fund's common shares of beneficial interest (the "COMMON SHARES")
(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 assisting the Advisers with respect 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 Common 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 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 Fee shall be paid by wire transfer to the order of
Xxxxx Fargo Securities, LLC.
In the event that the Advisers (or the Fund or any person or entity
affiliated with the Advisers 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 Common Shares (excluding for this purpose any compensation paid
directly to the entire underwriting syndicate, as a group, pursuant to the
Underwriting Agreement), and whether such compensation be denominated 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 you hereunder, expressed as a percentage of the aggregate price
to the public of the Common Shares sold by you in the Offering (including any
Common Shares over-allotted by you 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 Common Shares sold by such Other Broker in the Offering.
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).
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 advisers).
6. Assignment.This Agreement may not be assigned by any party without
prior written consent of the other parties.
7. Amendment; Xxxxxx.Xx 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.
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:
XXXXX FARGO SECURITIES, LLC
By: ______________________________
Name: Xxxxx Xxxx
Title: Managing Director
INDEMNIFICATION AGREEMENT
[ ], 2010
Xxxxx Fargo Securities, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxx Fargo Securities, LLC (the
"BANK") to assist the undersigned, First Trust Advisors L.P. and MacKay Xxxxxxx
LLC (together with their affiliates and subsidiaries, the "COMPANIES") with
respect to the matters set forth in the Structuring Fee Agreement dated [(black
circle)], 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 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 its 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. 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 the Indemnified Parties) also be counsel to the
Indemnified Party. No indemnifying party shall, 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
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 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 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 AGREEMENT. THE
COMPANIES AGREE 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 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:
XXXXX FARGO SECURITIES, LLC
By: ______________________________
Name: Xxxxx Xxxx
Title: Managing Director
