EXHIBIT 2.2
AGREEMENT
THIS AGREEMENT, made as of this second day of January, 2009, by and between
Lightstone Capital Management LLC ("LCM"), a Delaware limited liability company,
and Xxx Xxxxxx Funds Inc. ("Xxx Xxxxxx"), a Delaware corporation.
WITNESSETH:
WHEREAS, LCM is an investment adviser registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act");
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 that will each
initially invest all or a portion of its assets in securities selected by LCM in
accordance with the securities selection criteria set forth in Exhibit A
attached hereto (the "Trusts" or "LCM Trusts");
WHEREAS, Xxx Xxxxxx further desires the services of LCM 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 the investment concerns and strategies of LCM;
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the LCM
Property (as hereinafter defined) for use in connection with the Trusts;
WHEREAS, LCM is willing to provide the aforesaid services to Xxx Xxxxxx under
the terms and conditions hereinafter set forth; and LCM is willing to license
the LCM Property 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. Grant of License. (a) Subject to the terms and conditions of this
Agreement, LCM hereby grants to Xxx Xxxxxx and the Trusts, a license to use and
refer within the United States to the service marks "LIGHTSTONE," LIGHTSTONE
CAPITAL MANAGEMENT," "XXXX XXXXXXXXXX," "LCM INVESTMENT SERVICES" and "LCM"
(referred herein as the "LCM Property") solely in connection with the Trusts, in
such manner as may be deemed to be appropriate by Xxx Xxxxxx, subject to the
prior approval of LCM, which approval shall not be unreasonably withheld.
(b) LCM covenants and agrees that no person or entity other than Xxx Xxxxxx
shall need to obtain any other license with respect to the LCM Property in
connection with the initial sale of the Trusts or subsequent resales of the
Trusts in the secondary market.
(c) LCM represents and warrants that they own all proprietary rights in and
to the LCM Property for use in connection with the creation and distribution of
unit investment trusts and in connection with the provision of the services
contemplated by this Agreement and have the right to license the same to Xxx
Xxxxxx and the Trusts pursuant to this Agreement.
Except as otherwise specifically provided herein, LCM reserves all rights to
the LCM Property, and this Agreement shall not be construed to transfer to Xxx
Xxxxxx any ownership right to, or equity interest in, any of the LCM Property.
Such license shall terminate upon termination of this Agreement.
2. Identification of, and Consultation on Securities; Expenses. (a) During
the term of this Agreement, Xxx Xxxxxx shall provide LCM with reasonable advance
notice of the filing of each registration statement (inclusive of any
post-effective amendments) pertaining to a Trust ("Registration Statement") and,
subject to the foregoing, LCM will provide to Xxx Xxxxxx a list of all
securities that fit within the parameters described in Exhibit A in connection
with each Trust (the "Identified Securities") provided that Xxx Xxxxxx has given
LCM ten (10) days advance notice. 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, market capitalization and liquidity considerations.
(b) LCM will provide Xxx Xxxxxx with information reasonably requested by Xxx
Xxxxxx about the Portfolio Securities for use by Xxx Xxxxxx in preparing updated
prospectus disclosure and marketing materials for the Trusts. LCM also agrees to
review and comment upon disclosure in the Registration Statement referred to in
Section 13 hereof.
(c) LCM shall 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 LCM which consent will not be unreasonably withheld, Xxx Xxxxxx
may permit others to participate in these consultations.
(d) 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 Xxx Xxxxxx, then Xxx Xxxxxx shall reimburse LCM for all
such reasonable expenses. In addition Xxx Xxxxxx will continue to provide LCM
with the database services of Ibbotson/Morningstar that it has been providing to
LCM prior to this Agreement.
3. LCM Services Unique. LCM and Xxx Xxxxxx agree that the services to be
performed by LCM as set forth herein in conjunction with the Trusts are unique
and may not be performed by anyone other than LCM without the agreement of Xxx
Xxxxxx under Section 7 hereof.
4. Fee. For the license granted pursuant to Section 1, Xxx Xxxxxx, on behalf
of each of the Trusts, agrees that each Trust shall pay LCM an annual fee equal
to eighteen basis points (0.18%) of the average daily Evaluation Price of all
assets comprising such Trust (the "License Fee"). Subsequent to the Effective
Date (as defined below), the License Fee shall be paid on the total value of net
assets deposited in the LCM Trusts, which shall include the total value of
assets moved by unit holders from one LCM Trust to another LCM Trust. The
trustee of each Trust shall accrue such fee daily and pay such fee to LCM in
installments within fifteen (15) days following the end of each calendar quarter
during the term of such Trust and shall include a statement detailing the total
amount of net assets deposited in such LCM Trusts. "Evaluation Price" as used in
this Section 4 shall mean the "current net asset value" as defined in the
Investment Company Act of 1940, as amended.
5. Term. (a) Subject to 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 fifth (5th) 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 party a written notice to
that effect ninety (90) days prior to the end of the then-current term.
(b) Notwithstanding the above, Xxx Xxxxxx may in its sole discretion for any
reason terminate this agreement immediately at any time by providing notice and,
in the event such termination by Xxx Xxxxxx is made during the Initial Term
only, a termination payment within thirty (30) days of such notice as follows:
$160,000 from the Effective Date until the first (1st) anniversary of the
Effective Date; $128,000 from the first anniversary until the second (2nd)
anniversary of the Effective Date; $96,000 from the second anniversary until the
third (3rd) anniversary of the Effective Date; $64,000 from the third
anniversary until the fourth (4th) anniversary of the Effective Date; and
$32,000 from the fourth anniversary until the fifth (5th) anniversary of the
Effective Date..
6. Exclusivity and Right of First Refusal. (a) LCM covenants and agrees that
during the term of this Agreement, neither LCM nor anyone acting on its behalf
shall be associated or involved with any unit investment trust sponsor,
distributor or seller in the creation, marketing or sale of any non-exchange
traded unit investment trust based on the selection criteria set forth in
Exhibit A within the United States other than the Trusts. Nothing contained
herein shall limit the right of LCM 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 unit investment trust.
(b) LCM covenants and agrees that, during the Term of this Agreement, neither
LCM nor anyone acting on its behalf shall be associated or involved with anyone
in connection with the creation, administration, management, marketing or sale
of any unit investment trust within the United States unless LCM shall have
first promptly delivered a bona fide written offer to Xxx Xxxxxx to act as
sponsor, depositor, adviser, promoter, underwriter or distributor of such a unit
investment trust and Xxx Xxxxxx shall have failed to provide a written
acceptance of such offer to LCM within 30 days after receipt of such offer.
7. Assignment. Neither of the parties hereto may assign (including within the
meaning of the Advisers Act) its respective rights and obligations under this
Agreement without the prior written consent of the other.
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 LCM, and that any services performed hereunder by LCM shall be as
an independent contractor and not as an employee or agent of Xxx Xxxxxx or any
Trust. LCM shall have no authority whatsoever to bind Xxx Xxxxxx or any Trust on
any agreement or obligation and LCM agrees that LCM shall not hold itself out as
an employee or agent of Xxx Xxxxxx or any Trust.
9. Termination. (a) LCM 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 LCM that is not remedied
within ten (10) business days after written notice thereof.
(c) LCM and Xxx Xxxxxx may terminate this Agreement at any time upon the
execution by all parties of a written agreement to that effect.
(d) Any termination under Section 9(a) or (b) shall not limit any other
remedies for breach the non-breaching party 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 customers, distributors, information providers and
suppliers and proprietary information used by LCM to select securities)),
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 the other party to the degree it keeps secret its own
confidential or proprietary information. Such information belonging to a party
shall not be disclosed by the other party to its employees, officers, agents,
service providers or affiliates, except on a need-to-know basis, in which case
the other party shall be obligated to require that the employees, officers,
agents, service providers or affiliates hold the information secret and the
names of such employees, officers, agents, service providers or affiliates shall
be promptly disclosed to the party to which such information belongs, 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 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 party 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, LCM 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 piece published by LCM or in response to questions of the media or others,
without Xxx Xxxxxx'x prior written consent, except that LCM 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. LCM may reference any such registration statement or
other publicly available material produced by Xxx Xxxxxx.
12. Indemnification. (a) By Xxx Xxxxxx. In the event any claim is brought by
any third party against LCM or any of its affiliates 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 the case may
be, to comply with any law, rule or regulation relating to the Trusts, or use of
the LCM Property by the Trusts, Xxx Xxxxxx, or any of Xxx Xxxxxx'x affiliates.
LCM or any of its affiliates 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 LCM or any of its 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. LCM or any of its affiliates 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, LCM nor any of its affiliates 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 gross negligence or willful
misconduct of LCM or any of its affiliates.
(b) By LCM. 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 LCM of its obligations
hereunder, or the failure of LCM 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 LCM and shall defend such claim at its expense and under its
control. LCM 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, LCM 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 gross 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. LCM acknowledges that it has reviewed
and had an opportunity to comment upon those provisions of the Registration
Statement, as amended, specifically referring to or describing LCM and the
securities selection process if Xxx Xxxxxx has previously provided the
Registration Statement to LCM in a timely fashion to allow such review.
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 a party to require the performance of
any term of this Agreement or the waiver of a 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 with respect to the subject matter hereof, 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 LCM:
Address: Lightstone Capital Management LLC
00 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000-0000
Attn: Xx. Xxxx X. Xxxxxxxxxx, President
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
P.Q. Box 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to :
Xxx Xxxxxx Funds Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Office of the 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. Counterparts. This Agreement may be executed in 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:
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LIGHTSTONE CAPITAL MANAGEMENT LLC
By:
Name:
Title:
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EXHIBIT A
THE FOLLOWING XXX XXXXXX UNIT TRUSTS UTILIZE STRATEGIES DEVELOPED BY
LIGHTSTONE CAPITAL MANAGEMENT. THE "% LCM" COLUMN SHOWN DEFINES THE PERCENTAGE
OF TRUST ASSETS THAT UTILIZE LIGHTSTONE CAPITAL MANAGEMENT STRATEGIES. THE
DESCRIPTION OF THE SECURITIES SELECTION CRITERIA ARE INCORPORATED BY REFERENCE
TO THE CURRENT PROSPECTUSES FOR THE TRUSTS LISTED BELOW.
TRADING SYMBOL % LCM TRUST NAME
BMAS 37.50% Balanced Market Allocation Strategy Multi-Strategy
Core Allocation
CORE 75.00% Strategy
ENDX 50% Enhanced Index Strategies Portfolio
Growth-at-a Reasonable Price
GARP 100% Strategy
LCAP 100% Large Cap Growth Strategy Portfolio
LVAL 100% Large Cap Value Strategy Portfolio
MCAP 100% Mid-Cap Core Strategy Portfolio
SCAP 100% Small-Cap Core Strategy Portfolio
XXXX 100% Small-Mid Cap Strategy Portfolio
