STRUCTURING FEE AGREEMENT
, 2007
First Dominion Capital Corp.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, Xx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated (the
"Underwriting Agreement"), by and among Cornerstone Progressive Return Fund (the
"Fund"), Cornerstone Advisors, Inc. (the "Adviser") and First Dominion Capital
Corp., with respect to the issue and sale of the Fund's Common Shares, 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 Common Shares,
the Adviser shall pay a fee to you in the aggregate amount of $ (the "Fee"). The
Fee shall be paid on or before . Such payments shall be made by wire transfer to
the order of First Dominion Capital Corp.
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 Adviser agrees 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 INVESTMENT ADVISER; NO FIDUCIARY DUTY. The Adviser
acknowledges 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 Adviser hereby acknowledges that your engagement
under this Agreement is as an independent contractor and not in any other
capacity, including as a fiduciary. Furthermore, the Adviser agrees that it is
solely responsible for making its own judgments in connection with the matters
covered by this Agreement (irrespective of whether you have advised or are
currently advising the Adviser 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 managers).
6. ASSIGNMENT. This Agreement may not be assigned by any 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.
9. COUNTERPARTS. This Agreement may be executed in 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]
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This Agreement shall be effective as of the date first written above.
CORNERSTONE ADVISORS, INC.
By: __________________________
Name:
Title:
Agreed and Accepted:
FIRST DOMINION CAPITAL CORP.
By:
Name:
Title:
INDEMNIFICATION AGREEMENT
, 2007
First Dominion Capital Corp.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx XX 00000
Ladies and Gentlemen:
In connection with the engagement of First Dominion Capital Corp. (the "Bank")
to advise and assist the undersigned (together with its affiliates and
subsidiaries, referred to as the "Company") with the matters set forth in the
Structuring Fee Agreement dated , 2007 between the Company and the Bank (the
"Agreement"), in the event that the Bank 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 Company agrees to indemnify, defend
and hold the Bank harmless to the fullest extent permitted by law, from and
against any losses, claims, damages, liabilities and expenses 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 the Bank.
In addition, in the event that the Bank becomes involved in any capacity in any
Proceeding with respect to the services performed pursuant to and in accordance
with the Agreement, the Company will reimburse the Bank for its legal and other
expenses (including the cost of any investigation and preparation) as such
expenses are incurred by the Bank in connection therewith. Promptly after
receipt by the Bank of notice of the commencement of any Proceeding, the Bank
will, if a claim in respect thereof is to be made against the Bank under this
paragraph, notify the Company in writing of the commencement thereof; but the
failure so to notify the Company (i) will not relieve it from liability under
this paragraph unless and to the extent it did not otherwise learn of such
Proceeding and such failure results in the forfeiture by the Company of
substantial rights and defenses and (ii) will not, in any event, relieve the
Company from any obligations to the Bank other than the indemnification
obligation provided above. The Company shall be entitled to appoint counsel of
the Company's choice at the Company's expense to represent the Bank in any
Proceeding for which indemnification is sought (in which case the Company shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the Bank or parties except as set forth below); PROVIDED, HOWEVER,
that such counsel shall be satisfactory to the Bank. Notwithstanding the
Company's election to appoint counsel to represent the Bank in a Proceeding, the
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Bank shall have the right to employ separate counsel (including local counsel),
and the Company shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the Company to represent
the Bank would present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such Proceeding include both the
Bank and the Company and the Bank shall have reasonably concluded that there may
be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the Company, (iii) the
Company shall not have employed counsel satisfactory to the Bank to represent
the Bank within a reasonable time after notice of the institution of such
Proceeding or (iv) the Company shall authorize the Bank to employ separate
counsel at the expense of the Company.
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 stockholders
and affiliates and other constituencies, on the one hand, and the Bank, 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
Company and its stockholders 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 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 Company or its
stockholders 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 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 Company
contribute less than the amount necessary to assure that the Bank is 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 Company or other conduct by the Company (or its employees or
other agents), on the one hand, or by the Bank, on the other hand.
Notwithstanding the provisions of this paragraph, the Bank shall not be entitled
to contribution from the Company if it is determined that the Bank was guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
and the Company was not guilty of such fraudulent misrepresentation. The Company
will not settle any Proceeding in respect of which indemnity may be sought
hereunder, whether or not the Bank is an actual or potential party to such
Proceeding, without the Bank's prior written consent. For purposes of this
Indemnification Agreement, the Bank shall include 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, 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.
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The Company will not be liable to the Bank for any such losses, claims,
damages, liabilities or expenses arising from the sale of securities by
Cornerstone Progressive Return Fund to any person if a copy of a prospectus
required to be delivered in connection with such sale which has been furnished
to the underwriters of the offering of the securities (within a reasonable
amount of time prior to such sale) shall not have been sent, mailed or given to
such person, at or prior to the written confirmation of the sale of such
securities to such person, but only if and to the extent that such prospectus,
if so sent or delivered, would have cured the defect giving rise to, and been a
complete defense against the person asserting, such loss, claim, damage or
liability.
The Company agrees that neither the Bank 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 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 Company 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 COMPANY AND THE BANK 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 THE BANK OR ANY INDEMNIFIED PARTY. EACH OF
THE BANK AND THE COMPANY 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 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 the Bank's engagement. This
Indemnification Agreement may be executed in counterparts, each of which shall
be deemed an original, both of which shall constitute one and the same
agreement.
Very truly yours, CORNERSTONE
ADVISORS, INC.
By: __________________________
Name:
Title:
Accepted and agreed to as of the date first above written:
FIRST DOMINION CAPITAL CORP.
By:
Name:
Title:
