Exhibit 2.2
AGREEMENT
THIS AGREEMENT, made as of this 18th day of April, 2006, by and among
Xxxxx X. Xxxx, Xx. ("Xxxx"), an individual, the X.X. Xxxx Foundation ("Dent
Foundation"), a California public benefit corporation, and X.X. Xxxx Advisors
Inc. ("Dent Advisors") a Delaware corporation, and Xxx Xxxxxx Funds Inc. ("Xxx
Xxxxxx"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, Dent Advisors is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, (the "Advisers Act") and Dent is a
"supervised person" of an investment adviser within the meaning of Section
203A(b) of the Advisers Act;
WHEREAS, Dent has written books entitled "The Roaring 2000s" and "The
Roaring 2000s Investor" (the "Books") which describe general investment concerns
and strategies;
WHEREAS, all proprietary rights to the Books, together with any or all
of the text, graphics, logos, and other proprietary information contained in the
Books, the names "Roaring 2000s," "Dent" and "Xxxxx X. Xxxx, Xx." (collectively,
the "Dent Property") are owned by Dent and Dent Foundation;
WHEREAS, Xxx Xxxxxx sponsors, underwrites and distributes a wide array
of unit investment trusts ("UITs");
WHEREAS, Xxx Xxxxxx desires to establish one or more UITs on or after
the date of this Agreement that will each initially invest substantially all of
its assets in securities selected by Dent in accordance with the securities
selection criteria set forth in Exhibit A attached hereto (the "Trusts");
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the
Dent Property for use in connection with the Trusts;
WHEREAS, Xxx Xxxxxx further desires the services of Dent and Dent
Advisors in advising and consulting with Xxx Xxxxxx with respect to securities
selection in accordance with the description of the securities selection
criteria set forth in Exhibit A attached hereto, and with respect to the
investment principles set forth in the Books and Dent's investment concerns and
strategies; and
WHEREAS, Dent and Dent Foundation are willing to license the Dent
Property to Xxx Xxxxxx and the Trusts, and Dent, Dent Foundation and Dent
Advisors are willing to provide the aforesaid services to Xxx Xxxxxx and the
Trusts under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Identification of Securities. (a) During the term of this Agreement
(as defined in Section 5 hereof), Xxx Xxxxxx shall provide Dent Advisors with
reasonable advance notice of the filing of each registration statement
pertaining to a Trust ("Registration Statement") and, subject to the foregoing,
Dent and Dent Advisors will provide to Xxx Xxxxxx within ten (10) days of Xxx
Xxxxxx'x written request a list of securities that fit within the parameters
described in Exhibit A in connection with each Trust (the "Identified
Securities"). Such Identified Securities will be deposited in the related
Trust's portfolio (the "Portfolio Securities"); provided, however, that Xxx
Xxxxxx reserves the right to modify the initial Portfolio Securities based upon
all information available to it, including, among other factors, regulatory,
market capitalization and liquidity considerations, subject to the prior
approval of Dent, which approval will not be unreasonably withheld.
(b) Dent and Dent Advisors will provide Xxx Xxxxxx with information
reasonably requested by Xxx Xxxxxx about Dent, Dent Foundation, Dent Advisors
and the Portfolio Securities for use by Xxx Xxxxxx in preparing updated
prospectus disclosure and marketing materials for the Trusts. Dent, Dent
Foundation and Dent Advisors also agree to review and comment upon disclosure in
the Registration Statement referred to in Section 13 hereof.
(c) Dent and Dent Advisors will provide general advice to and will
consult with Xxx Xxxxxx with respect to the investment principles set forth in
the Books and Dent's investment concerns and strategies. Dent and Dent Advisors
shall also periodically consult with and advise Xxx Xxxxxx regarding the
securities or methodologies used to identify those securities for inclusion in
any Trust at a time and place mutually agreed upon by the parties. With the
prior consent of Dent and Dent Advisors, which consent will not be unreasonably
withheld, Xxx Xxxxxx may permit others to participate in these consultations.
(d) Each of Dent, Dent Foundation and Dent Advisors covenants and
agrees that he or it will not describe Xxx Xxxxxx'x services or recommend or
specifically endorse Xxx Xxxxxx or its investment products. Further, each of
Dent, Dent Foundation and Dent Advisors covenants and agrees that he or it will
not, except to the extent incident to the conduct of their business (i)
recommend or endorse specific securities (except, in the case of Dent Advisors,
as part of Dent Advisors' business as an investment adviser); (ii) become
involved in any financial services offered by Xxx Xxxxxx or any other
broker-dealer, including (A) opening, maintaining, administering, or closing
customer brokerage accounts with Xxx Xxxxxx or any other broker-dealer; (B)
soliciting, processing, or facilitating securities transactions relating to
customer brokerage accounts with Xxx Xxxxxx or any other broker-dealer; (C)
extending credit to any customer for the purpose of purchasing securities
through, or carrying securities with, Xxx Xxxxxx or any other broker-dealer; (D)
answering customer inquiries or engaging in negotiations involving brokerage
accounts or securities transactions; (E) accepting customer securities orders,
selecting among broker-dealers or routing orders to markets for execution; (F)
handling funds or securities of customers of Xxx Xxxxxx or any other
broker-dealer, or effecting clearance or settlement of customer securities
trades; or (G) resolving or attempting to resolve any problems, discrepancies,
or disputes involving customer accounts of Xxx Xxxxxx or any other broker-dealer
or related transactions; provided, however, that nothing herein shall be deemed
to govern or limit actions of Dent or Dent Advisors with respect to parties
other than Xxx Xxxxxx except when such actions relate to, or could reasonably be
deemed to relate to, Xxx Xxxxxx or the Trusts.
(e) Each of Dent, Dent Foundation and Dent Advisors represents and
warrants that neither it nor any of its officers, directors or employees (i) is
subject to an order of the SEC issued under section 15(b) of the Securities
Exchange Act of 1934 ("Exchange Act"), (ii) has been convicted within the
previous ten years of any felony or misdemeanor involving conduct described in
section 15(b)(4) of the Exchange Act, (iii) has been found by the SEC to have
engaged, or has been convicted of engaging, in any of the conduct specified in
paragraphs (B), (D) or (E) of section 15(b)(4) of the Exchange Act, or (iv) has
been the subject of an order, judgment or decree described in section
15(b)(4)(C) of the Exchange Act. This representation shall survive the
termination of this Agreement for so long as Xxx Xxxxxx or a Trust is obligated
to make payments to the Dent, Dent Foundation or Dent Advisors hereunder.
2. Grant of License. (a) Subject to the terms and conditions of this
Agreement, Dent and Dent Foundation hereby grant to Xxx Xxxxxx and the Trusts an
exclusive worldwide license to use and refer to the Dent Property in any manner
desired by Xxx Xxxxxx in connection with the Trusts, provided, however, that (i)
Xxx Xxxxxx and the Trusts may not republish the Books in their entirety without
any necessary consent from the publisher of the Books, (ii) Xxx Xxxxxx will not
use more than five (5) slides from Dent materials in any marketing brochure or
seminar, and (iii) Xxx Xxxxxx will obtain prior approval from Dent prior to the
release of any marketing materials or seminar that make reference to Dent, Dent
Foundation, Dent Advisors or the Dent Property.
(b) Each of Dent, Dent Foundation and Dent Advisors covenants and
agrees that no person or entity other than Xxx Xxxxxx shall need to obtain any
other license with respect to the Dent Property in connection with the initial
sale of the Trusts or subsequent resales of the Trusts in the secondary market.
(c) Each of Dent and Dent Foundation represents and warrants that they
own all proprietary rights in and to the Dent Property and have the right to
license the same to Xxx Xxxxxx and the Trusts pursuant to this Agreement.
(d) Xxx Xxxxxx, on behalf of the Trusts, acknowledges that each of
Dent, Dent Foundation and Dent Advisors have represented and warranted that the
Dent Property is the exclusive property of Dent and Dent Foundation and that
Dent and Dent Foundation have and retain all proprietary rights there except to
the extent otherwise provided herein. Except as otherwise specifically provided
herein, Dent and Dent Foundation reserve all rights to the Dent Property, and
this Agreement shall not be construed to transfer to Xxx Xxxxxx or the Trusts
any ownership right to, or equity interest in, any of the Dent Property.
3. Services Unique. The parties hereto agree that the services to be
performed by Dent, Dent Foundation and Dent Advisory to the Trusts as set forth
in Sections 1 and 2 herein are unique and may not be performed by anyone other
than Dent and Dent Advisors.
4. Fees. (a) For the services to be performed pursuant to Section 1,
Xxx Xxxxxx, on behalf of each Trust, agrees that each Trust shall pay Dent
Advisors a fee equal to nine basis points (0.09%) of the aggregate Evaluation
Price of all assets comprising such UIT as of the end of the primary offering
period of each Trust (the "Portfolio Consultant Fee"). Such fee shall be paid by
the trustee of a particular Trust to Dent Advisors within fifteen (15) days
following the end of the primary offering period of such Trust.
(b) For the license granted pursuant to Section 2, Xxx Xxxxxx, on
behalf of each Trust, agrees that each Trust created on or after the date of
this Agreement shall pay Dent Foundation on a quarterly basis a fee equal to one
and one-half basis points (0.015%) of the aggregate Evaluation Price of such UIT
as of the end of such quarter (the "License Fee"). Such fee shall be paid by the
trustee of a particular Trust to Dent Foundation within fifteen (15) days
following the end of each quarter such Trust exists as a legal entity.
(c) "Evaluation Price" shall mean the "current net asset value" of a
Trust as defined in the Investment Company Act of 1940, as amended.
5. Term. Subject to the provisions of Section 9, the term of this
Agreement shall commence and continue as described in this Section. The term of
this Agreement shall commence as of the date set forth above (the "Effective
Date") and shall remain in full force and effect until the second (2nd)
anniversary of the Effective Date, unless this Agreement is terminated earlier
as provided herein (such term being referred to as the "Initial Term"). At the
end of the Initial Term, this Agreement shall automatically renew for successive
one-year periods unless a party terminates the Agreement by providing the other
parties a written notice to that effect ninety (90) days prior to the end of the
then-current term.
6. Exclusivity. Each of Dent, Dent Foundation and Dent Advisors
covenants and agrees that during the term of this Agreement none of Dent, Dent
Foundation nor Dent Advisors, or anyone acting on behalf of any of the aforesaid
parties shall take any action to market or promote any UIT other than the Trusts
or shall permit the use of any of the Dent Property in connection with the
creation, marketing or promotion of any UIT other than the Trusts.
Notwithstanding the preceding sentence, nothing contained herein shall prohibit
Dent, Dent Foundation or Dent Advisors, in the normal course of their
businesses, from (a) developing and promoting investment allocations that
include UITs other than the Trusts or (b) accepting speaking engagements from a
company that sponsors UITs, provided that none of Dent, Dent Foundation or Dent
Advisors license any Dent Property to or in connection with such a UIT or
company or provide consulting services to such a UIT. Nothing contained herein
shall limit the right of Dent, Dent Foundation or Dent Advisors to sponsor,
create, market or promote any investment company (as defined in Section 3(a)(1)
of the Investment Company Act of 1940, as amended, disregarding the provisions
of Sections 3(b) and 3(c) thereof), other than a UIT.
7. Assignment. None of the parties hereto may assign (including within
the meaning of the Investment Advisers Act of 1940, as amended) its respective
rights and obligations under this Agreement without the prior written consent of
the others.
8. Relationship of the Parties. The parties understand and agree that
this Agreement shall not be deemed to create any partnership or joint venture
between Xxx Xxxxxx and Xxxx, Xxxx Foundation or Dent Advisors, and that the
services performed hereunder by Dent, Dent Foundation and Dent Advisors shall be
as independent contractors and not as employees or agents of Xxx Xxxxxx. Xxxx,
Xxxx Foundation and Dent Advisors shall have no authority whatsoever to bind Xxx
Xxxxxx on any agreement or obligation and each of Dent, Dent Foundation and Dent
Advisors agree that he or it shall not hold itself out as an employee or agent
of Xxx Xxxxxx.
9. Termination. (a) Dent, Dent Foundation and Dent Advisors may
terminate this Agreement immediately upon a material breach of any
representation, warranty or covenant of Xxx Xxxxxx that is not remedied within
ten (10) business days after written notice.
(b) Xxx Xxxxxx may terminate this Agreement immediately upon a material
breach of any representation, warranty or covenant of Dent, Dent Foundation or
Dent Advisors that is not remedied within ten (10) business days after written
notice thereof.
(c) Dent, Dent Foundation and Dent Advisors and Xxx Xxxxxx may
terminate this Agreement at any time upon the execution by all parties of a
written agreement to that effect.
Any termination under Section 9(a) or (b) shall not limit any other
remedies for breach the non-breaching parties may have at law or in equity.
Notwithstanding any provision of this Agreement to the contrary, termination of
this Agreement shall not constitute termination of any Trust.
10. Confidentiality. (a) The parties agree that certain material and
information which has or may come into the possession or knowledge of each in
connection with this Agreement or the performance hereof (e.g., proprietary
business information (including, without limitation, the names and addresses or
other personal information of customer, distributors, information providers and
suppliers)), consists of confidential and proprietary data whose disclosure to
or use by third parties would be damaging. In addition, the parties may
reasonably designate, by notice in writing delivered to the other parties, other
information as being confidential or a trade secret.
(b) All such proprietary or confidential information of each party
hereto shall be kept secret by every other party to the degree it keeps secret
its own confidential or proprietary information. Such information belonging to
any party shall not be disclosed by another party to its employees, officers,
agents, service providers or affiliates, except on a need-to-know basis, but may
be disclosed by such other party to State, Federal, or other governmental
agencies, authorities or courts as required by law or regulation, or upon their
order or request provided prompt notice of such order or request is given by
such other party to the party to which such information belongs, if such notice
is legally permitted.
(c) No information that would otherwise be proprietary or confidential
for purposes of this Agreement pursuant to subsections (a) or (b) above shall be
subject to the restrictions on disclosure imposed by this Section in the event
and to the extent that (i) such information is in, or becomes part of, the
public domain otherwise than through the fault of a party to which such
information does not belong, (ii) such information was known to such party prior
to the execution of this Agreement, or (iii) such information was revealed to
such party by a third person, and which the receiving party reasonably believes
has been obtained by such third person not in violation of any existing
confidentiality or non-disclosure agreement.
(d) Each party acknowledges and agrees that a breach of this Section 10
would cause a permanent and irreparable damage for which money damages would be
an inadequate remedy. Therefore, each party shall be entitled to seek equitable
relief (including injunction and specific performance) in the event of any
breach of the provisions of this Section 10, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section 10 shall survive the
termination of this Agreement.
11. Covenants. During the period of this Agreement and for as long as
any of the Trusts remains outstanding, each of the parties agree to:
(a) comply with all codes, regulations and laws applicable to the
performance of its obligations under this Agreement and obtain or have obtained
all necessary permits, licenses and other authorizations necessary for such
performance and maintain its business reputation and good standing;
(b) take such other actions as the other parties hereto may reasonably
request to more effectively carry out its obligations under this Agreement; and
(c) do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations, including, but not by way of limitation,
obtaining all consents, approvals, and authorizations, required of such party in
connection with the consummation of the transactions contemplated by this
Agreement. No party shall take any action that would be expected to result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect.
In addition, Dent, Dent Foundation and Dent Advisors may not refer to
Xxx Xxxxxx or any affiliates in any kind of communications, whether oral,
written or electronic, or otherwise, and whether in a Dent, Dent Foundation or
Dent Advisors piece or in response to questions of the media or others, without
Xxx Xxxxxx'x prior written consent, except that Dent, Dent Foundation and Dent
Advisors may state that Dent or Dent Advisors act as consultants to the Trusts
and may describe the services provided under this Agreement to the extent that
such services are described in any Registration Statement or other publicly
available materials produced by Xxx Xxxxxx.
12. Indemnification. (a) In the event any claim is brought by any third
party against Dent, Dent Foundation or Dent Advisors that relates to, arises out
of or is based upon the performance by Xxx Xxxxxx of its obligations hereunder,
or the failure of Xxx Xxxxxx, or any of Xxx Xxxxxx'x affiliates, as applicable,
to comply with any law, rule or regulation relating to the Trusts, Dent, Dent
Foundation or Dent Advisors, as applicable, shall promptly notify Xxx Xxxxxx,
and Xxx Xxxxxx shall defend such claim at Xxx Xxxxxx'x expense and under Xxx
Xxxxxx'x control. Xxx Xxxxxx shall indemnify and hold harmless Dent, Dent
Foundation or Dent Advisors, as applicable, against any judgment, liability,
loss, cost or damage (including litigation costs and reasonable attorneys' fees)
arising from or related to such claim whether or not such claim is successful.
Dent, Dent Foundation and Dent Advisors shall have the right, at their expense,
to participate in the defense of such claim through counsel of their own
choosing; provided, however, that Xxx Xxxxxx shall not be required to pay any
settlement amount that it has not approved in advance. Notwithstanding the
above, Dent, Dent Foundation and Dent Advisors shall not be entitled to
indemnification hereunder to the extent that the judgment, liability, loss, cost
or damage arising from a claim for which indemnification is sought hereunder
results directly or indirectly from the negligence or willful misconduct of
Dent, Dent Foundation or Dent Advisors.
(b) In the event any claim is brought by any third party against Xxx
Xxxxxx, any of the Trusts, or any of Xxx Xxxxxx'x affiliates that relates to,
arises out of or is based upon the performance by Dent, Dent Foundation or Dent
Advisors of their respective obligations hereunder, or the failure of Dent, Dent
Foundation or Dent Advisors to comply with any law, rule or regulation, Xxx
Xxxxxx, the Trusts, or Xxx Xxxxxx'x affiliates, as the case may be, shall
promptly notify Dent, Dent Foundation or Dent Advisors, as applicable, and Dent,
Dent Foundation or Dent Advisors shall defend such claim at its expense and
under its control. Dent, Dent Foundation and Dent Advisors shall indemnify and
hold harmless Xxx Xxxxxx, the Trusts, and Xxx Xxxxxx'x affiliates against any
judgment, liability, loss, cost or damage (including litigation costs and
reasonable attorneys' fees) arising from or related to such claim, whether or
not such claim is successful. Xxx Xxxxxx, the Trusts, or Xxx Xxxxxx'x
affiliates, as the case may be, shall have the right, at their expense, to
participate in the defense of such claim through counsel of their own choosing;
provided, however, Dent, Dent Foundation and Dent Advisors shall not be required
to pay any settlement amount that it has not approved in advance.
Notwithstanding the above, neither Xxx Xxxxxx, the Trusts, nor any of Xxx
Xxxxxx'x affiliates shall be entitled to indemnification hereunder to the extent
that the judgment, liability, loss, cost or damage arising from a claim for
which indemnification is sought hereunder results directly or indirectly from
the negligence or willful misconduct of Xxx Xxxxxx, the Trusts, or Xxx Xxxxxx'x
affiliates.
(c) The indemnifications set forth in this Section 12 shall survive the
termination of this Agreement for any cause whatsoever.
13. Review of Registration Statement. Each of Dent, Dent Foundation and
Dent Advisors hereby acknowledges that he or it has reviewed and had an
opportunity to comment upon those provisions of the Registration Statement, as
amended, specifically referring to or describing Dent, Dent Foundation or Dent
Advisors and the securities selection process. For purposes of the foregoing, a
draft of the Registration Statement is attached hereto as Exhibit B.
14. Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York without reference
to or inclusion of the principles of choice of law or conflicts of law of that
jurisdiction. It is the intent of the parties that the substantive law of the
State of New York govern this Agreement and not the law of any other
jurisdiction incorporated through choice of law or conflicts of law principles.
15. Waiver of Breach. The failure of any party to require the
performance of any term of this Agreement or the waiver of any party of any
breach hereunder shall not prevent a subsequent enforcement of such term nor be
deemed a waiver of any subsequent breach.
16. Scope of Agreement. This document constitutes the entire Agreement
of the parties with respect to the subject matter hereof, supersedes all prior
oral or written agreements, and can be amended only by a writing executed by all
of the parties.
17. Notices. All notices from any party to the other pursuant to this
Agreement shall be in writing or by facsimile transmission and shall be sent to
the following addresses, or to such addresses as the parties hereto may be
notified in writing from time to time:
If to Dent, Dent Foundation or Dent Advisors:
000 Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxx, XX 00000
Attn: Xxxxx X. Xxxx
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to Office of General Counsel
Notices shall be deemed given upon receipt via certified mail,
overnight courier, or hand delivery.
18. Severability. In the event that any provision of this Agreement or
application hereof to any person or in any circumstances shall be determined to
be invalid, unlawful, or unenforceable to any extent, the remainder of this
Agreement, and the application of any provision to persons or circumstances
other than those as to which it is determined to be unlawful, invalid or
enforceable, shall not be affected thereby, and each remaining provision of this
Agreement shall continue to be valid and may be enforced to the fullest extent
permitted by law.
19. Conflicts. In the event that any provision in this Agreement
conflicts in any way with the trust agreement governing a particular Trust, the
provisions of the trust agreement in respect thereof shall control.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed by a duly authorized representative thereof as of the
date first above written.
XXX XXXXXX FUNDS INC.
By____________________________________________
Name__________________________________________
Title_________________________________________
XXXXX X. XXXX, XX.
______________________________________________
X.X. XXXX FOUNDATION
By____________________________________________
Name__________________________________________
Title_________________________________________
X.X. XXXX ADVISORS INC.
By____________________________________________
Name__________________________________________
Title_________________________________________
EXHIBIT A
DESCRIPTION OF SECURITY SELECTION CRITERIA
Securities will be selected using concepts outlined in The Roaring
2000s and/or The Roaring 2000s Investor, written by Xx. Xxxx, or by Xx. Xxxx'x
general analysis of economic, technological and demographic trends in society
apart from the books. The securities will be selected in an effort to take
advantage of the insights, philosophies and strategies discussed in these books
or through Xx. Xxxx'x independent analysis of economic, technological and
demographic trends in society. One of Xx. Xxxx'x fundamental beliefs is that
demographic trends drive the economy and are key to long-term forecasting. Based
on Xx. Xxxx'x current analysis, the portfolio selection may focus on securities
from certain identified sectors, market capitalizations, countries or regions.
The securities selection will seek to leverage demographic, economic and
lifestyle trends.
EXHIBIT B
REGISTRATION STATEMENT
Attached
