MARKETING AND STRUCTURING FEE AGREEMENT
---------------------------------------
[ ], 2006
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
This agreement is between Xxxxxx Xxxxxxx Investment Management Inc. (the
"Company") and Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx Xxxxxxx") with respect
to the Xxxxxx Xxxxxxx China A Share Fund, Inc. (the "Fund").
1. Fee. (a) In consideration of advice to the Company relating to, but not
limited to, the design, structure, corporate finance and marketing of the Fund
and for assistance in connection with distribution of the Fund as a closed-end
investment company, the Company shall pay a fee to you calculated based on
1.25% of the aggregate price to public of the common shares of beneficial
interest of the Fund sold by Xxxxxx Xxxxxxx in the Fund's initial public
offering (the "Offering") (including any common shares of the Fund over-allotted
by Xxxxxx Xxxxxxx in the Offering regardless of whether the over-allotment
option in the Offering is exercised), equal to $[ ] (the "Fee").
(b) Notwithstanding Section 1(a), in the event that the Company (or the
Fund or any person or entity affiliated with the Company or the Fund or acting
on behalf of or at the direction of the Company or the Fund, including Xxxxxx
Xxxxxxx Investment Management Company or any of its affiliates) compensates or
agrees to compensate any 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 (excluding for this purpose any compensation paid
directly to the entire underwriting syndicate, as a group, pursuant to the
principal 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 public of
the common shares of the Fund sold by Xxxxxx Xxxxxxx in the Offering (including
any common shares of the Fund 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 public of the common shares of the Fund sold by such Other
Broker in the Offering.
(c) The Fee paid to Xxxxxx Xxxxxxx shall not exceed [ ]% of the total
price to the public of the common shares sold in the Offering. The Fee shall be
paid on or before [ ], 2006 and shall be made by wire transfer to the
order of Xxxxxx Xxxxxxx. The Company acknowledges that the Fee is in addition to
any compensation you earn in connection with your role as an underwriter to the
Fund in its initial public offering, which services are distinct from and in
addition to the market 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 Company 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 Advisor. The Company 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.
5. Not Exclusive. Nothing herein shall be construed as prohibiting you or
your 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 Company. In addition, nothing in this Agreement shall be construed to
constitute Xxxxxx Xxxxxxx as the agent or employee of the Company or the Company
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 Company 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 of the
Company or any other third party in connection with its engagement hereunder,
all of which are hereby expressly waived to the extent the Company has the
authority to waive such duties and liabilities.
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.
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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.
[END OF TEXT]
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XXXXXX XXXXXXX INVESTMENT
MANAGEMENT INC.
By:
------------------------------------------
Name:
Title:
Agreed and Accepted:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Director
INDEMNIFICATION AGREEMENT
-------------------------
[ ], 2006
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 its
affiliates and subsidiaries, referred to as the "Company") with the matters set
forth in the Marketing and Structuring Fee Agreement dated [ ], 2006
between the Company 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 Company has 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 arise out of, or based upon, the
Marketing and Structuring Fee Agreement and/or any action taken by any
Indemnified Person in connecting therewith {including, without limitation, any
presentation given by the Company and an Indemnified Person relating to the
common shares of beneficial interest (the "Common Shares") of Xxxxxx Xxxxxxx
China A Share Fund, Inc. (the "Fund")), and will reimburse each Indemnified
Person for all 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 Company
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
Company also agrees that no Indemnified Person shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company for or in
connection with the Activities, except for any such liability for losses,
claims, damages or liabilities incurred by the Company that are finally
judicially determined to have resulted from the had faith or gross negligence of
such Indemnified Person.
Notwithstanding the foregoing, in no event shall the Company 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 Company from the initial public
offering of the Common Shares of the Fund (the "Offering"); provided, however,
that the Company shall, as set forth above, indemnify and be responsible for,
regardless of the gross proceeds received by the Company from the Offering, all
expenses (including fees and expenses of counsel) 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 Company will not, without Xxxxxx Xxxxxxx'x 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 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 our 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 preceding paragraph.
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 (including the net
proceeds from the Common Shares sold by Xxxxxx Xxxxxxx in the Offering before
deducting expenses) and its 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
Company and its 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 Company agrees that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Company and its 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 or paid or contemplated to be received or paid by the Company or its
partners or affiliates and other constituencies, as the case may be, as a result
of or in connection with the transaction (whether or not
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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 Company
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 emission 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 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 Common Shares, represents the entire agreement between the
Company and the Indemnified Parties with respect to the marketing and
structuring fee paid to Xxxxxx Xxxxxxx under the Marketing and Structuring Fee
Agreement.
The Company acknowledges that in connection with the Offering of the Common
Shares: (i) Xxxxxx Xxxxxxx has acted at arms length, is not an agent of, and
owes no fiduciary duties to, the Company, the Fund or any person affiliated with
the Fund or the Company, (ii) Xxxxxx Xxxxxxx owes the Company only those duties
and obligations set forth in this Indemnification Agreement and (iii) Xxxxxx
Xxxxxxx may have interests that differ from those of the Company. The Company
waives to the full extent permitted by applicable law any claims any of them may
have against Xxxxxx Xxxxxxx arising from an alleged breach of fiduciary duty in
connection with the offering of the Common 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 and Marketing and Structuring Fee 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 two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same agreement.
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Very truly yours,
XXXXXX XXXXXXX INVESTMENT
MANAGEMENT INC.
By:
------------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Director
