EXHIBIT 2.2
LICENSE AND CONSULTING AGREEMENT
This License and Consulting Agreement ("Agreement") is made and entered
into this 1st day of February, 1999 (the "Effective Date"), by and between
Lightstone Capital Management LLC, having an address at Suite 301, 00 Xxxxxxxxxx
Xxxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000-0000 ("LCM") whose President and employee
is Xxxx X. Xxxxxxxxxx ("Xxxxxxxxxx") and Xxxx Xxxxxx Xxxxxxxx Inc., having an
address at 0 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("DWR").
RECITALS
WHEREAS, DWR desires to engage LCM, and, through LCM, Lightstone as a
consultant on the terms and conditions provided in this Agreement; and
WHEREAS, LCM desires to accept such engagement, including providing
Lightstone, to render consulting services to DWR on the terms and conditions
provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations herein, DWR agrees with LCM, and LCM agrees with DWR as follows:
DWR hereby engages LCM, and, through LCM, Lightstone, as a consultant in
connection with the development, sponsorship and supervision by DWR of certain
unit investment trusts, and DWR's marketing, offering and sale of units of such
trusts. The proposed trusts developed with the assistance of LCM (the "LCM
Trusts" as defined below) shall be investment companies which invest in
securities that have been selected pursuant to the selection criteria of certain
elements and rules (a "Substrategy" as defined below). Units of LCM Trusts will
be registered, as necessary, pursuant to applicable registration statements
("Registration Statements") filed with the Securities and Exchange Commission.
I. DEFINITIONS.
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The terms defined in this Section shall, for purposes of this Agreement,
have the meanings specified in this Section:
1. "Affiliate" means an entity controlled by, under control of, or under
common control with, another entity.
2. "Business Day" is any day on which major commercial banks in New York
City are open for business.
3. "DWR Information" is the trade secrets, intellectual property and
other proprietary or confidential information of DWR, including but
not limited to business plans relating to LCM Trusts, that is subject
to the provisions of Exhibit A.
4. "Exhibit A" is the Trade Secret and Confidentiality Agreement, as
defined below.
5. "LCM Information" is the trade secrets, intellectual property and
other proprietary or confidential information of LCM, including but
not limited to Substrategies, that is subject to the provisions of
Exhibit A.
6. "LCM Trust" is a Unit Investment Trust that is substantially based
upon, or uses a Substrategy and/or the consulting service of LCM in
the selection of a majority of the securities in its Portfolio and the
units of which are offered and sold by DWR, its Affiliates or any of
their sub-licensees.
7. "Portfolio" is a combined holding of one or more securities by a LCM
Trust.
8. "Proposed LCM Trust" is a proposed Unit Investment Trust that will be
a LCM Trust once it is registered with the Securities and Exchange
Commission, and which is actually offered to the public during the
term of this Agreement or within six (6) months after this Agreement
terminates.
9. "Substrategy" is a series of specified elements or rules developed and
owned by LCM that are used to target securities for a UIT. Substrategy
does not include any investment strategy developed by DWR
independently of LCM and without utilizing LCM Information or
information derived therefrom.
10. "Substrategy Letter" is the LCM Information defining a particular
Substrategy in letter form and offered to DWR. A form of a Substrategy
Letter is attached at Exhibit A-2.
11. "Trade Secret and Confidentiality Agreement" is the agreement
governing, among other things, restrictions on access to DWR
Information and LCM Information, executed by the parties hereto along
with this Agreement, and which forms a part of this Agreement. The
Trade Secret and Confidentiality Agreement is attached hereto as
Exhibit A.
12. "Unit Investment Trust" or "UIT" is an investment company, as defined
in the Investment Company Act of 1940, as amended (the "1940 Act").
II. LICENSE TO BENEFIT FROM AND RIGHT OF USE OF SUBSTRATEGIES.
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1. LCM hereby grants to DWR and its Affiliates an exclusive, world-wide
license to benefit from and right of use of any Substrategy created by
LCM for use in a UIT. LCM shall not license any Substrategy for use in
any UIT other than to DWR. DWR shall use its best efforts to promote
and market LCM Trusts, either through DWR and its Affiliates' own
offering of LCM Trusts and/or through sub-licensing the right of use
of a Substrategy to a sub-licensee. This right shall be
non-transferable, except that DWR and its Affiliates may sub-license
to a sub-licensee provided such sub-licensee is approved by LCM in
advance, which approval shall not be unreasonably withheld, for use by
DWR and its Affiliates and their sub-licensees with regard to LCM
Trusts. In the event that DWR sub-licenses the right to use of and
benefit from a Substrategy to a sub-licensee. DWR shall pay to LCM the
compensation related to the value of net assets on deposit of any
sub-licensee LCM Trust in accordance with Section IX. Each
sub-licensee shall be advised that the LCM Information is being
disclosed subject to the terms of this Agreement and may not be
disclosed or accessed other than pursuant to the terms hereof,
including any applicable Access Restrictions. Before any sub-licensee
is given access to LCM Information, it must agree in writing to be
bound by the provisions of this Agreement relating to sub-licensees by
executing a Certification in the form annexed as Schedule B.
2. When requested by DWR, LCM shall provide Substrategies and/or
Portfolios generated therefrom to DWR, provided that DWR shall allow
LCM a reasonable period of time to provide such Substrategies and/or
Portfolios.
3. LCM agrees that DWR and its Affiliates and their sub-licensees may
create one or more series of the LCM Trusts based on the
Substrategies.
4. LCM agrees that, upon the request and as requested by DWR, it will
provide the consulting services of Lightstone to DWR, and Lightstone
has agreed with LCM to perform such services on behalf of LCM, related
to such right of use of the Substrategies licensed herein.
5. After LCM provides a Substrategy and/or Portfolios to DWR, any
additional value in the LCM Trusts created by DWR and its Affiliates
and their sub-licensees through the actions of DWR and its Affiliates
or persons retained by DWR and its Affiliates shall belong solely to
DWR and LCM shall have no right to or interest to such added value nor
be entitled to any compensation therefor.
6. Notwithstanding any other provision of this Agreement, the
compensation provisions of this Agreement do not apply to any other
products and services, other than the LCM Trusts and related
consulting services or as otherwise approved in writing by LCM and
DWR, offered by DWR and its Affiliates and their sub-licensees, and
DWR and its Affiliates and their sub-licensees agree not to use any
LCM Information or information derived therefrom in any other products
and services, other than the LCM Trusts, offered by DWR and its
Affiliates and their sub-licensees absent written agreement with LCM.
III. LICENSE TO BENEFIT FROM AND RIGHT OF USE OF LCM MARKS.
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1. With the prior approval and consent of LCM, which consent shall not be
unreasonably withheld so long as the quality and manner of use is
equivalent to the quality and manner in which DWR uses its own
trademarks and trade names, DWR may use the trade names and/or
trademarks of LCM, including but not limited to: "LIGHTSTONE,"
"LIGHTSTONE CAPITAL MANAGEMENT," "XXXX XXXXXXXXXX," "LCM," "LCM
INVESTMENT SERVICES" and the like (the "LCM Marks"), in conjunction
with a LCM Trust.
2. If requested by DWR, LCM will consent to the use of LCM Marks in any
Registration Statement and/or filing related to a LCM Trust with the
SEC or other regulatory agency and in the name of any LCM Trust and
the filing of such consent as part of the Registration Statement.
3. DWR Marketing Material.
a) DWR and its Affiliates and their sub-licensees will have sole
responsibility for developing its own marketing material. In
connection with Proposed LCM Trusts and LCM Trusts, DWR and its
Affiliates and their sub-licensees may, with the prior approval and
consent of LCM as provided above, which approval and consent shall not
be unreasonably withheld, include the LCM Marks and/or a description
of the consulting services provided by LCM or Lightstone pursuant to
this Agreement in prospectuses, Registration Statements, offering
documents, filings, sales literature, advertisements and
correspondence related thereto and the like ("Marketing Materials").
b) DWR and its Affiliates and their sub-licensees may also, with the
prior approval and consent of LCM as noted above, include references
to the consulting services provided by LCM or Lightstone whether or
not the LCM Marks are specifically mentioned in Marketing Materials,
provided that, with regard to references to the consulting services
provided by LCM or Lightstone, any such Marketing Materials developed
by DWR and its Affiliates that references such consulting services
provided by LCM or Lightstone shall be subject to LCM's five (5)
business day review period and approval (such approval not to be
unreasonably delayed or denied) prior to dissemination by DWR and its
Affiliates. Notwithstanding the above, language that has been approved
by LCM in the past will not need approval for use in new Marketing
Materials where the context of the reference remains the same and the
Marketing Materials are used for the same or similar purpose as the
prior approved use.
c) LCM shall make Lightstone available, subject to scheduling conflicts
and reasonable advance notice, to appear and participate in seminars
and presentations relating to marketing LCM Trusts for up to thirty
(30) days per calendar year without payment of any additional fees
therefor other than as provided in this Agreement in Section IX,
Paragraph 1. Reasonable expenses incurred by LCM in connection with
such participation shall be payable by DWR. The availability of
Lightstone for additional days may be subject to a per diem fee.
IV. TERM OF AGREEMENT.
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1. This Agreement shall continue from the Effective Date hereof and for a
period of five (5) years, unless earlier terminated as provided
herein.
2. On each anniversary of the Effective Date, the five (5) year period
will begin anew unless either party gives written notice to the other
party at least 60 days prior to that anniversary that it does not wish
to extend the term of this Agreement. In the event that such notice is
given by either party, the contract will extend for five (5) years
from the next anniversary of the Effective Date after the date of such
notice.
3. Notwithstanding the above, DWR may in its sole discretion for any
reason terminate this agreement immediately at any time by providing
notice and a termination payment of $160,000 within thirty (30) days
of such notice. In the event of a termination pursuant to this
Paragraph, Section XII Paragraphs (3) and (4) shall apply.
V. RIGHT OF FIRST OFFER AND EXCLUSIVITY.
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1. LCM and through LCM, Lightstone, agree that during the term of this
Agreement, LCM will first offer to DWR the exclusive right to the use
of and benefit, from any investment strategy it creates for any other
equity investment product apart form UITs. DWR shall have thirty (30)
days from such offer to give written notice to LCM that DWR wishes to
accept the exclusive right to the use of and benefit from such
investment strategy, and thereafter DWR shall use its best efforts to
agree to terms of an agreement with LCM in a timely manner. If DWR
does not give a written notice of acceptance or if DWR and LCM have
not come to an agreement within ninety (90) days from such offer, LCM
shall be free to offer such investment strategy to any other party.
VI. IDENTIFICATION OF SECURITIES FOR LCM TRUSTS.
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1. During the term of this Agreement, LCM will provide to DWR, upon the
request of DWR, a Substrategy relating to a series of LCM Trusts. DWR
shall have the right to use the Substrategy and the consulting
services of LCM to choose securities for inclusion in the LCM Trust's
Portfolio. Notwithstanding the above, Portfolio selection will be in
the sole discretion of DWR based upon all information available to it,
including the results from the Substrategy selection process, market
capitalization and liquidity requirements, among other factors, and
DWR shall be solely responsible for providing Portfolios and LCM
Trusts and that are in compliance with applicable regulatory
requirements. LCM shall provide the data needed in DWR's discretion to
comply with applicable regulatory requirements.
2. Furthermore, DWR or the trustee of a LCM Trust shall determine, in
their sole discretion and based upon all information available to
them, whether, it is in the interest of the LCM Trusts to retain,
sell, redeem, liquidate or dispose of a particular Portfolio Security.
3. LCM's obligation to deliver any Substrategy or Portfolio to DWR shall
be subject to LCM's receipt of sufficient data in a timely fashion
from a reliable data gathering institution, the identity of which
shall be mutually agreed upon by both parties.
VII. DISCLOSURE OF INFORMATION.
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1. LCM shall provide DWR with sufficient and complete information about
each Substrategy, including a Substrategy Letter defining a given
Substrategy, for use by DWR in choosing securities for inclusion in a
Portfolio for a LCM Trust and in conducting due diligence,
back-testing and in preparing offering document disclosure,
Registration Statement, Marketing Materials and nay other LCM Trust or
offering document. LCM shall also provide DWR with information about
LCM's business and operations reasonably necessary for such purposes.
2. LCM shall be afforded the opportunity to comment upon those provisions
of a LCM Trust's prospectus and marketing materials specifically
referring to or describing LCM, Lightstone or the consulting services
provided herein, or using the LCM trade names and/or trademarks.
3. LCM hereby warrants and covenants that the information provided by LCM
for inclusion in a Registration Statement, offering materials and
Marketing Materials and the like of any LCM Trust, will not contain
any untrue statement of a material fact nor omit to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
4. LCM shall provide information for inclusion in the Registration
Statement, offering document, sales literature or marketing document
for a LCM Trust, as determined by DWR or counsel thereto or as
requested by the Staff at the Securities and Exchange Commission
("SEC") or National Association of Securities Dealers ("NASD").
5. DWR shall determine the disclosure to be provided to the SEC, NASD
and/or included in a document relating to the LCM Trust and LCM shall
provide such information for such disclosure.
6. With respect to the above, both parties shall use their best efforts
to preserve the confidentiality of LCM Information in any such
disclosure.
VIII. EXCLUSIVE SERVICES.
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1. DWR agrees, during the term of this Agreement, for any LCM Trust, to
retain LCM to provide the consulting services described herein with
respect to such series of LCM Trusts.
2. LCM agrees, during the term of this Agreement, for any LCM Trust, to
provide the consulting services described herein with respect to such
series of LCM Trusts.
3. During the term of this Agreement, no one other than DWR and its
Affiliates and their sub-licensees may offer, sponsor, sell or
distribute, directly or indirectly, any UITs based on LCM information
or data and DWR, its Affiliates and their sub-licensees may do so only
in accordance with the terms of this Agreement.
IX. COMPENSATION.
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1. During the term of this Agreement, DWR shall pay LCM $80,000.00 per
year for consulting services performed in connection with this
Agreement. Such payment shall be made in quarterly installments
payable on the first Business Day of each calendar quarter, starting
on January 4, 1999, with the first payment due within ten (10)
business days of the execution of this Agreement.
2. DWR, its Affiliates or their sub-licensees as the case may be, or the
LCM Trust shall pay LCM a fee equal to fifteen basis points (0.15%) of
the total value of the net assets deposited in the LCM Trust, at the
time of deposit, at the end of the primary offering period (the
"Deposit Fee").
3. DWR, its Affiliates or their sub-licensees as the case may be, or the
LCM Trust shall pay LCM a fee equal to ten basis points (0.10%) of the
total value of assets, at the time of the move, moved by unit holders
form one LCM Trust to another LCM Trust (a "Rollover"), which assets
shall be excluded from the net assets for purposes of determining the
Deposit Fee.
4. Any fees payable to LCM based on the value of the net assets deposited
in a LCM Trust shall be payable by DWR or a LCM Trust within 30 days
after the end of the primary offering period and shall include a
statement detailing the amount of net assets deposited in and
Rollovers for such LCM Trust.
5. LCM or its representatives shall have the right to audit the books and
records of DWR and any LCM Trust once within any twelve (12) month
period, upon reasonable notice, during normal business hours. Such
audit shall be limited to determining the amount of any fees payable
to LCM which are based on the value of the net assets deposited in any
LCM Trust. In the event that such determination shows that any fees
actually paid to LCM with respect to a LCM Trust are at least 10% less
than the fees that should have been paid, in addition to DWR paying
such difference to LCM, DWR shall also reimburse LCM for the
reasonable costs of such audit.
X. EXPENSES.
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1. Each party shall be responsible for all of its own expenses incurred
in connection with this Agreement; provided, however, that in the
event that LCM incurs reasonable travel expenses in connection with
the promotion of the LCM Trusts at the request of DWR, then DWR shall
reimburse LCM for all such reasonable expenses.
2. Expenses incurred for the acquisition of data to be utilized in the
creation of the Substrategies and Portfolios shall be the sole
responsibility of DWR. LCM shall be free to use the data so acquired
for any further use it sees fit.
XI. CONFIDENTIALITY.
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1. The terms of this Agreement, and all confidential, proprietary
information provided by any party (the "Disclosing Party") to the
other (the "Receiving Party"), including but not limited to DWR
Information and LCM Information, shall be considered confidential
information ("Confidential Information").
2. Confidential Information includes, without limitation, business
operations or business plans, proprietary technology, non-public
information, trade secrets and know-how, whether presented in writing
or in any other tangible medium, or presented verbally, that the
Disclosing Party has identified as, or which the Receiving Party has a
reasonable basis to know is, confidential, a secret, or not public
information, or if the information relates to the intellectual
property or the business of a party.
3. No information shall be treated as Confidential Information if the
Receiving Party can show that such information was (i) prior to
receipt from the Disclosing Party, in the possession of the Receiving
Party, or (ii) in the public domain at the time of its disclosure or
subsequently came into the public domain other than by a breach of
this paragraph by it, or (iii) after disclosure hereunder, was
received from a third person or entity that did not obtain it from a
party hereto and is under no obligation to maintain the information in
secret, or (iv) independently developed by the Receiving Party without
the benefit of the Confidential Information. Each party agrees that it
will hold and protect all Confidential Information in a confidential
manner, and will take appropriate action to preserve such
confidentiality by instruction or agreement with its agents and
representatives who will be, have or have been permitted access to the
information. Further, each party agrees to not make use of any
Confidential Information except to use it in accordance with the terms
of this Agreement.
a) The Receiving Party agrees not to disclose Confidential Information or
any information derived therefrom, to any person or entity except as
requested by a judicial, quasi-judicial or regulatory agency, or
deemed necessary by DWR or its counsel with respect to a legal or
regulatory process, provided however, after consultation between the
parties, the Disclosing Party has a fair opportunity to contest such
requested disclosure.
b) Notwithstanding the above, however, the Disclosing Party shall
cooperate in the establishment and maintenance of a candid and
congenial relationship with any such judicial, quasi-judicial or
regulatory agency requesting disclosure of Confidential Information.
It may become important that information that would otherwise be
deemed Confidential Information or Trade Secret Information be
disclosed to the Securities and Exchange Commission or in an offering
document for an LCM Trust. Before doing so, DWR will consult with LCM
as to the divulgence of such disclosure. If the parties agree to such
divulgence, then the information which becomes public as a result of
such disclosure will be deemed not to be Confidential Information or
Trade Secret Information.
4. Any disclosure of information in a Registration Statement, offering
document, sales literature, regulatory agency filing or communication
by DWR and its Affiliates and their sub-licensees shall be deemed a
permitted public disclosure and divulgence of such information, and
not a breach of these confidentiality provisions, even if such
information would have otherwise been Confidential Information.
5. Each party agrees not to copy any Confidential Information provided by
another party except as necessary to comply with the terms of this
Agreement.
6. Each party agrees not to reverse engineer any Confidential Information
provided by another party.
7. Each party agrees that it shall acquire no rights to or an interest in
or divulge any Confidential Information about any or all of the
business operations of the other party except as necessary to comply
with the terms of this Agreement.
8. Except in connection with the LCM Trusts, each party agrees that it
shall not make use of any audit report or other analysis performed or
obtained by the other party or persons retained by such other party
relating to a Substrategy performance. Notwithstanding the above, any
such audit report or other analysis that is published in any publicly
available medium (without breaching the confidentiality provisions of
this Agreement) shall thereafter not be Confidential Information.
9. The Confidential Information and Trade Secret Information identified
in Exhibit A shall also be subject to additional restrictions and
provisions as disclosed in Exhibit A. Where Exhibit A conflicts with
the provisions of this Section, the provisions of Exhibit A shall
control, except that the disclosure provisions of Section VII and
Section XI, Paragraph 3 and 4 shall in all cases take precedence.
10. The confidentiality obligations imposed on the parties pursuant to
this Agreement shall survive termination of this Agreement for ten
(10) years.
XII. TERMINATION.
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1. In addition to the termination provisions under Section IV, this
Agreement shall continue in full force and effect until the
termination by a party at any time upon six (6) days written notice
after the occurrence with respect to the other party of:
a) Notice of a Change in Control of the other party, as that term is
defined below, it being understood that each party is obligated herein
to provide the other party with notice of such Change in Control as
soon as it is reasonably aware that such Change in Control is imminent
and is allowed to divulge that information; or
b) The breach of any provision of this Agreement, willful misconduct, bad
faith or any continuing disregard of the other party's obligations and
duties hereunder, provided such other party has been given written
notice of such breach or failure to satisfy its obligations and duties
and has failed to cure or remedy such failure to satisfy its
obligations and duties within fifteen (15) days of such notice.
2. For purposes of this Section, "Change in Control" shall mean (i) the
sale, transfer or assignment of a majority of a party's outstanding
voting securities, and (ii) with respect to LCM, the death,
resignation, retirement or incapacity of Lightstone or the termination
of Lightstone's employment from LCM, provided however, Change in
Control shall not include (ii) if a suitable replacement for
Lightstone is made available to DWR by LCM and such replacement is
approved by DWR, such approval to not be withheld if DWR in good faith
believes such replacement can fulfill the obligations of this
Agreement.
3. Upon the occurrence of a termination pursuant to this Section or in
the event that this Agreement terminates pursuant to Section IV, DWR
and its Affiliates and their sub=licensees shall not create nor
register any new LCM Trusts other than the Proposed LCM Trusts. In
such case, DWR's right to use of and benefit from the Substrategies
and LCM Information for existing LCM Trusts and Proposed LCM Trusts
shall be a non-exclusive basis.
4. Upon the occurrence of a termination pursuant to this Section or in
the event that this Agreement terminates pursuant to Section IV, LCM
shall be paid any and all fees based on net assets deposited in any
LCM Trusts accrued through the Termination Date within thirty (30)
business days after such termination. In the event of termination of
this Agreement pursuant to this Section XII, Paragraphs 1(a) and 1(b),
LCM shall not be paid the amount set forth in Section IV, paragraph 3.
5. Notwithstanding termination of this Agreement by either party DWR and
its Affiliates and their sub-licensees may continue to offer and sell
Units of any series of LCM Trusts or Proposed LCM Trusts existing or
proposed at the time of termination, and the Compensation provisions
of this Agreement related to the value of net assets deposited in any
LCM Trust or Proposed LCM Trust shall apply.
XIII. REPRESENTATION, WARRANTIES AND COVENANTS.
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1. LCM represents, warrants and covenants that:
a) LCM is and shall continue to be, during the term of this Agreement,
the exclusive owner of the Substrategies created by LCM and the LCM
Marks, with good title to all rights therein, and LCM has and shall
continue to have, during the term of this Agreement, the right to
license the Substrategies and the LCM Marks to DWR on an exclusive
basis. LCM has maintained and shall continue to maintain, during the
term of this Agreement, in confidence its Substrategies and it has not
previously disclosed and shall not disclose, during the term of this
Agreement, any Substrategies to any other entity.
b) LCM is a limited liability company duly organized, validly existing
and in good standing under the laws of the state of Delaware, and is
duly qualified to do business in every jurisdiction where the
character of its businesses or nature of its properties makes such
qualification necessary, and shall continue to be so during the term
of this Agreement.
c) LCM has all requisite corporate power and authority to conduct its
business as presently being conducted or as contemplated by this
Agreement and shall continue to have such power and authority during
the term of this Agreement.
d) LCM has full corporate power and authority to enter into this
Agreement and has full corporate power and authority to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by LCM and the performance by LCM of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of LCM at the time of execution.
e) This Agreement has been duly executed and delivered by LCM and
constitutes a valid and binding obligation of LCM, enforceable against
LCM in accordance with the terms herein, subject to applicable laws of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
f) The execution and delivery of this Agreement by LCM does not, and the
consummation of the transactions contemplated hereby will not: (i)
violate any of the provisions of the operating agreement or bylaws of
LCM; (ii) result in the breach of, or constitute a default under, or
accelerate or permit the acceleration of the performance required by,
any contract to which LCM is a party; (iii) to its knowledge, violate
any statute, rule, regulation, ordinance, code or other law, order,
judgment, writ, injunction, decree or award applicable to LCM; (iv)
constitute an event which, with notice, lapse of time or both, would
result in any such violation, breach or default; or (v) to its
knowledge, result in the creation or imposition of any security
interest, pledge, claim, lien, charge, encumbrance, or other right or
interest of any other person against the assets of LCM.
g) Except as has been made or obtained, no consent, approval, license,
permit, order or authorization of, or registration, declaration or
filing with, any court, administrative agency, commission or other
governmental authority or instrumentality, domestic or foreign, or any
third party is required to be made or obtained by LCM in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
h) As of the date of this Agreement, each of LCM and its employees are
not a party to any lawsuit, claim, proceeding or investigation that
would affect the ability of LCM or its employees to perform their
obligations under this Agreement, and, to the knowledge of LCM, no
lawsuit, claim, proceeding or investigation has been threatened in
writing within the last 24 months, by or against LCM or its employees
or any of their assets that would affect the ability of LCM or its
employees to perform their obligations under this Agreement.
2. DWR represents, warrants and covenants that:
a) DWR and its Affiliates and their sub-licensees shall be the exclusive
sponsor or sponsors of the LCM Trusts, and each of DWR and its
Affiliates and their sub-licensees has the right and authority to
sponsor and offer LCM Trusts.
b) DWR is a corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware, and is duly
qualified to do business in every jurisdiction where the character of
its businesses or nature of its properties makes such qualification
necessary.
c) DWR has all requisite corporate power and authority to conduct its
business as presently being conducted.
d) DWR has full corporate power and authority to enter into this
Agreement and has full corporate power and authority to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by SWR and the performance by DWR of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action on the part of DWR.
e) This Agreement has been duly executed and delivered by DWR and
constitutes a valid and binding obligation of DWR, enforceable against
DWR in accordance with the terms herein, subject to applicable laws of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, and to general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
f) The execution and delivery of this Agreement by DWR does not, and the
consummation of the transactions contemplated hereby will not: (i)
violate any of the provisions of the articles of incorporation or
bylaws of DWR; (ii) result in the breach of, or constitute a default
under, or accelerate or permit the acceleration of the performance
required by, any contract to which DWR is a party; (iii) to its
knowledge, violate any statute, rule, regulation, ordinance, code or
other law, order, judgment, writ, injunction, decree or award
applicable to DWR; (iv) constitute an event which, with notice, lapse
of time or both, would result in any such violation, breach or
default; or (v) to its knowledge, result in the creation or imposition
of any security interest, pledge, claim lien, charge, encumbrance, or
other right or interest of any other person against the assets of DWR.
g) Except as has been made or obtained, no consent, approval, license,
permit, order or authorization of, or registration, declaration or
filing with, any court, administrative agency, commission or other
governmental authority or instrumentality, domestic or foreign, or any
third party is required to be made or obtained by DWR in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
h) As of the date of this Agreement, DWR is not a party to any lawsuit,
claim, proceeding or investigation that would affect the ability of
DWR to perform its obligations under this Agreement, and, to the
knowledge of DWR, no lawsuit, claim, proceeding or investigation has
been threatened in writing within the last 24 months, by or against
DWR or any of its assets that would affect the ability of DWR to
perform its obligations under this Agreement.
XIV. INDEMNIFICATION.
----------------
1. DWR shall indemnify LCM and hold LCM and each of LCM's officers,
employees and agents harmless from and against any and all liability
arising out of:
a) Any inaccuracy or omission in any prospectus or supplement thereto,
Registration Statement of a LCM Trust or annual post-effective
statement or any advertising or promotional material and the like with
respect to a LCM Trust, but in each case DWR shall have no obligation
to indemnify LCM, its officers, employees or agents if, and to the
extent, the inaccuracy or omission or alleged inaccuracy or omission
was (i) made in reliance upon, and in conformity with information LCM
has furnished to DWR or its Affiliates or their sub-licensees for the
purpose of such prospectus or supplement thereto, Registration
Statement or offering documents of a LCM Trust or annual
post-effective amendment updating the information in such Registration
Statement or any advertising or promotional material and the like, or
(ii) due to the negligence of LCM.
b) Any breach by DWR of any representation, warranty, covenant or
obligation contained in this Agreement, except to the extent such
liability results from LCM's breach of this Agreement, willful
misconduct, bad faith, reckless disregard of LCM's duties or LCM's
negligence.
c) Any violation by DWR of any law or regulation applicable to DWR with
respect to a LCM Trust, except to the extent such liability results
from LCM's breach of this Agreement, willful misconduct, bad faith or
negligence.
2. LCM shall indemnify and hold harmless DWR, any sponsor or underwriter
of the LCM Trusts, and any of their Affiliates and their sub-licensees
and each of their officers, directors, employees, partners and agents
from and against any and all liability arising out of:
a) Any inaccuracy or omission in any prospectus or supplement thereto.
Registration Statement of a LCM Trust or annual post-effective
amendment updating the information in such Registration Statement or
any advertising or promotional material and the like with respect to a
LCM Trust, but in each case LCM shall have the obligation to indemnify
DWR, any sponsor or underwriter of the LCM Trusts, and any of their
Affiliates and their sub-licensees and each of their officers,
directors, employees, partners and agents only if, and to the extent,
the inaccuracy or omission or alleged inaccuracy or omission was made
in reliance upon, and in conformity with (i) information LCM has
furnished to DWR or its Affiliates or their sub-licensees for the
purpose of such prospectus or supplement thereto, Registration
Statement of a LCM Trust or annual post-effective amendment updating
the information in such Registration Statement or any advertising or
promotional material and the like, or (ii) the negligence of LCM.
b) Any breach by LCM of any representation, warranty, covenant or
obligation contained in this Agreement, except to the extent such
liability results from DWR's breach of this Agreement, willful
misconduct, bad faith, reckless disregard of DWR's duties or DWR's
negligence.
c) Any violation by LCM of any law or regulation applicable to LCM with
respect to a LCM Trust, except to the extent such liability results
from DWR's breach of this Agreement, willful misconduct, bad faith or
negligence.
XV. MISCELLANEOUS PROVISIONS.
-------------------------
A. SEVERABILITY.
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1. The illegality, invalidity or unenforceability of any provisions of
this Agreement shall not affect the legality, validity or
enforceability of any other provisions hereof.
B. COUNTERPARTS.
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1. This Agreement may be signed in any number of counterparts, each of
which shall be an original with the same effect as if the signatures
were upon the same instrument. A photocopy or electronic facsimile of
this Agreement or any signature hereon shall be valid as an original.
C. CONDITIONS.
-----------
1. As a condition precedent to this agreement, opinion of counsel will be
provided by Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, stating that, upon
due inquiry, counsel believes that LCM can in good faith make the
representations, warranties and covenants of Section XIII, Paragraphs
1(a) through 1(h), and that in its opinion neither LCM or Lightstone
are or, by taking the actions contemplated by this Agreement, will be
an affiliate of DWR under the 1940 Act.
2. DWR shall be permitted to perform such due diligence as it deems
necessary to verify LCM Information including any Substrategy. LCM
shall make itself and Lightstone available for consultations to
expeditiously complete such due diligence, which shall not in any case
last longer than forty-five (45) days after the date of this
Agreement. DWR may terminate this Agreement by written notice to LCM
if, for any reason, DWR is not reasonably satisfied with the results
of such due diligence. In the event of such termination, no payments
shall be due to LCM or Lightstone, except for the initial payment due
upon execution of this Agreement under Section IX, Paragraph 1.
D. ENTIRE AGREEMENT; GOVERNING LAW.
--------------------------------
1. This Agreement and the attached Exhibits and Schedules incorporates
the entire understanding of the parties and supersedes all previous
agreements, and shall be governed by and construed in accordance with
the laws of the State of New York.
2. This Agreement constitutes the entire agreement and understanding of
the parties with respect to the subject matter hereof, and supersedes
all oral communication and prior writings with respect hereto
including, but not limited to, the Confidentiality Agreement between
Xxxx Xxxxxx Xxxxxxxx, Inc. and Xxxx X. Xxxxxxxxxx effective as of July
21, 1998, it being understood and agreed by both parties that any
information disclosed by one party to the other pursuant to the
Confidentiality Agreement between Xxxx Xxxxxx Xxxxxxxx Inc. and Xxxx
X. Xxxxxxxxxx effective as of July 21, 1998, shall be subject to the
provisions of Confidentiality herein.
E. REMEDIES.
---------
1. Each party hereto acknowledges that any breach of the provisions of
this Agreement shall result in serious and irreparable injury to the
non-breaching party or parties for which monetary damages or other
remedies at law will be inadequate. Each party agrees, therefore, that
in connection with a breach of this Agreement, in addition to any
other remedy that the non-breaching party or parties may have, the
non-breaching party or parties shall be entitled to seek to enforce
the specific performance of this Agreement by the breaching party or
parties in the event of any breach and to seek both temporary and
permanent injunctive relief.
F. WAIVER.
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1. Any failure of a party to enforce, at any time or for any period of
time, any of the provisions of this Agreement shall not be construed
as a waiver of other provisions or of the right of such party
thereafter to enforce each and every provision.
G. HEADINGS.
---------
1. The headings and numberings of Sections and Paragraphs used in this
Agreement are inserted for convenience of reference only and shall not
affect the interpretation of the respective Sections and Paragraphs of
this Agreement.
H. DWR MARKS.
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1. DWR uses Xxxxxx Xxxxxxx Xxxx Xxxxxx as a service xxxx in the offer and
sale of its products (including unit investment trusts and LCM
Trusts). LCM and Lightstone shall make no use of, other than with
prior written approval by DWR, or have any interest in the names of
logos, DWR, Xxxxxx Xxxxxxx Xxxx Xxxxxx or Xxxxxx Xxxxxxx Xxxx Xxxxxx
Select Equity Trust or any other service xxxx or trademark of DWR or
Affiliates thereof (the "DWR Marks").
I. INDEPENDENT CONTRACTOR.
-----------------------
1. For al purposes hereof, LCM shall be deemed to be an independent
contractor and shall be fully responsible for any personnel performing
work for DWR on LCM's behalf, including insurance, benefits and tax
liability.
2. Except as otherwise expressly provided herein or authorized in
writing, a party shall have no authority to act for or represent in
any way the other party, or otherwise be deemed the agent of DWR the
other. For example:
a) LCM shall have no authority to act for or represent in any way the LCM
Trusts or the LCM Trust's sponsors or underwriters, or otherwise be
deemed the agent of DWR. Neither DWR, the sponsors of the LCM Trusts
nor the LCM Trusts are partners or joint venture partners with LCM and
nothing herein shall be construed so as to make them partners or joint
venture partners or impose any liability as such on any one of them
for LCM.
b) DWR shall have no authority to act for or represent in any way LCM or
LCM Information except as provided in this Agreement, or otherwise be
deemed the agent of LCM. Neither LCM nor Lightstone are partners or
joint venture partners with DWR and nothing herein shall be construed
so as to make them partners or joint venture partners or impose any
liability as such on any one of them for DWR.
J. ASSIGNMENT OR SALE OF BUSINESS.
-------------------------------
1. Neither party to this Agreement shall assign this Agreement (including
any assignment resulting from the sale of substantially all of its
business or assets) without the other party's written consent.
K. RESOLUTION OF CONFLICTS.
1. This Agreement shall be construed and interpreted and is enforceable
in accordance with the laws of the State of New York, without
reference to its conflicts of laws.
2. Any litigation based hereon, or arising out of, under or in connection
with this Agreement or any documents or instruments contemplated
hereby shall be brought and maintained in the courts of the State of
New York or in the United States District Court for the Southern
District of New York before a judge, special master or panel, and the
parties hereby expressly agree that they shall not seek a jury trial
in any such litigation and hereby irrevocably waive the right to a
jury trial.
3. The parties hereby expressly and irrevocably submit to the
jurisdiction of the courts of the State of New York and of the United
States District Court for the Southern District of New York for the
purpose of any such litigation arising out of this Agreement. The
parties further irrevocably consent to the service of process by
registered mail, postage prepaid, or by personal service within or
without the State of New York. Each of the parties hereby expressly
and irrevocably waives, to the fullest extent permitted by law, any
objection which it may have or hereafter may have to the laying of
venue of any such litigation brought in any such court referred to
above and any claim that any such litigation has been brought in an
inconvenient forum.
L. AMENDMENT.
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1. No provision of this Agreement may be amended or waived except by an
instrument in writing executed by the parties hereto.
XVI. NOTICES.
--------
1. All notices and other written communications specified herein shall be
in writing (which term shall at the option of the notifying party
include electronic facsimile) and shall be (i) personally delivered,
(ii) transmitted by first-class mail, postage prepaid, or (iii)
transmitted by facsimile with confirming telephone call to the parties
as follows, or to any such location that a party notifies the other
parties in advance for notices:
If to LCM:
Lightstone Capital Management LLC
Xxxxx 000
00 Xxxxxxxxxx Xxx.
Xxxxx Xxxxxx, XX 00000-0000
Attn: Xx. Xxxx X. Xxxxxxxxxx, President
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP 000 Xxxxx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attn: Xxxx
Xxxxxxxxxx, Esq.
If to DWR:
Xxxx Xxxxxx Xxxxxxxx Inc.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Director of Unit Investment Trusts
IN WITNESS WHEREOF, the undersigned LCM and DWR agree to the terms and
provisions of this Agreement.
Lightstone Capital Management LLC
By: _______________________________
Name: Xxxx X. Xxxxxxxxxx
Title: President
Date: February 1, 1999
Xxxx Xxxxxx Xxxxxxxx Inc.
By: ______________________________
Name: Xxxxxx Xxxxx
Title: First Vice President
Date: February 1, 1999
