Exhibit (K)(7)
FORM OF STRUCTURING FEE AGREEMENT
[ ], 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated the date hereof
(the "Underwriting Agreement"), by and among Xxxxx Xxxxx Tax-Managed Diversified
Equity Income Fund (the "Fund"), Xxxxx Xxxxx Management (the "Adviser"), Rampart
Investment Management Company, Inc. (the Sub-Adviser) and each of the
Underwriters named therein, 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,
which services may be completed by your affiliate in your sole discretion, the
Adviser shall pay a fee to you in the aggregate amount of $[ ] (the "Fee"). The
Fee shall be paid on or before [ ], 2006. The payment shall be made by wire
transfer to the order of Citigroup Global Markets Inc.
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 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.
[END OF TEXT]
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This Agreement shall be effective as of the date first written above.
XXXXX XXXXX MANAGEMENT
By:
--------------------------------
Name:
Title:
Agreed and Accepted:
CITIGROUP GLOBAL MARKETS INC.
By:
--------------------------------
Name:
Title:
[Structuring Fee Agreement]
INDEMNIFICATION AGREEMENT
[ ], 2006
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Citigroup Global Markets Inc. (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 [ ], 2006 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 reasonably satisfactory to the Bank. Notwithstanding
the Company's election to appoint counsel to represent the Bank in a Proceeding,
the Bank shall have the right to employ one 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
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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. In no event shall the Company be liable for the fees and expenses
of more than one counsel (in addition to any local counsel) separate from their
own counsel for the Bank and/or the other Underwriters (as defined in the
Underwriting Agreement) (taken as a group) that have entered into a structuring
fee agreement, an additional compensation agreement or similar agreement
pursuant to which the Company pays additional compensation to the respective
Underwriter in connection with the offering contemplated in the Underwriting
Agreement, in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances.
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, 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, 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, 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 (which consent shall not be
unreasonably withheld). 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
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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 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 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,
XXXXX XXXXX MANAGEMENT.
By:
-------------------------------
Name:
Title:
Accepted and agreed to as of the date first above written:
CITIGROUP GLOBAL MARKETS INC.
By:
---------------------------
Name:
Title:
[Indemnification Agreement]
