EXHIBIT 2.2
AGREEMENT
THIS AGREEMENT, made as of this 18th day of March, 2009, by and between
BlackRock Financial Management, Inc. ("BlackRock"), a Delaware corporation, and
Xxx Xxxxxx Funds Inc. ("Xxx Xxxxxx"), a Delaware corporation.
WITNESSETH:
WHEREAS, BlackRock 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 solely in securities selected from a list provided by BlackRock
in accordance with the securities selection criteria set forth in Exhibit A
attached hereto (the "Trusts");
WHEREAS, Xxx Xxxxxx further desires to engage the services of BlackRock 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
BlackRock, such analysis to be provided to Xxx Xxxxxx in the form of a
methodology report in a format to be agreed upon by the parties (the
"Methodology Report");
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the
BlackRock Property (as hereinafter defined) for use in connection with the
Trusts;
WHEREAS, BlackRock is willing to provide the aforesaid services to Xxx Xxxxxx
under the terms and conditions hereinafter set forth; and BlackRock, on behalf
of BlackRock, Inc. and its affiliates, is willing to license the BlackRock
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, BlackRock hereby grants to Xxx Xxxxxx and the Trusts, a limited,
non-exclusive, non-transferable license with no right to sub-license (subject to
termination in accordance with Section 8), to use and refer within the United
States to the service marks "BlackRock Financial Management, Inc." and
"BlackRock" and the form of BlackRock logo set forth in Exhibit B (referred
herein as the "BlackRock Property") solely in connection with the offering of
interests in the Trusts, in such manner as may be deemed to be appropriate by
Xxx Xxxxxx, subject to the prior approval of BlackRock as set forth in 1(e),
below, which approval shall not be unreasonably withheld. Any additional uses of
the BlackRock Property must be agreed by BlackRock and Xxx Xxxxxx in writing and
shall, unless expressly agreed otherwise, be subject to the terms of this
Agreement.
(b) BlackRock covenants and agrees that no person or entity other than Xxx
Xxxxxx shall need to obtain any other license with respect to the BlackRock
Property in connection with the initial sale of the Trusts or subsequent resales
of the Trusts in the secondary market.
(c) BlackRock represents and warrants that they own all proprietary rights in
and to the BlackRock 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.
(d) Xxx Xxxxxx acknowledges that the BlackRock Property is famous and
distinctive, and that the BlackRock Property has substantial goodwill, are
valuable assets of BlackRock and are diligently protected by BlackRock as such.
Xxx Xxxxxx acknowledges that its agreement to observe strictly the provisions of
this Section 1 goes to the essence of this Agreement and is a material
inducement for BlackRock to enter this Agreement.
(e) Xxx Xxxxxx shall not place, distribute, display or perform any
advertisements, commercials, promotional pieces, corporate sponsorships, press
releases, Internet website pages or other marketing materials in any format or
medium, that include, use, involve, relate to, or refer to the BlackRock
Property (each, an "Advertisement") before Xxx Xxxxxx has first obtained
approval from BlackRock to do so as specified in this Agreement. Xxx Xxxxxx
agrees to provide BlackRock with a reasonable amount of time to review a draft
Advertisement and BlackRock agrees that it shall promptly provide to Xxx Xxxxxx
any comments on the draft Advertisement. Once an Advertisement is approved by
BlackRock, Xxx Xxxxxx may use that form of Advertisement, or a substantially
similar Advertisement that does not change, in any material respect, the use of
the referenced BlackRock Property, provided that if, after initially granting
such approval, BlackRock reasonably believes that circumstances surrounding such
use have materially changed such that the Advertisement violates the provisions
of this Agreement, BlackRock may notify Xxx Xxxxxx of such belief and Xxx Xxxxxx
shall cease use of such Advertisement as soon as reasonably practicable.
(f) Without BlackRock's express prior written consent which will be granted
or withheld in BlackRock's sole discretion, Xxx Xxxxxx shall not represent in
any Advertisements or other public statements (including any websites) that
BlackRock has endorsed Xxx Xxxxxx, its businesses or its products or services.
(g) Xxx Xxxxxx shall not use the BlackRock Property in any unlawful or
deceptive manner or in any way that is reasonably likely to directly or
indirectly tarnish, dilute, lessen the value of, or invalidate the BlackRock
Property (including, but not limited to, by using any marks, logos or other
devices that are similar to or that incorporate the BlackRock Property). As
concerns a use of the BlackRock Property, Xxx Xxxxxx shall be deemed not to have
breached this Section in relation to any part of an Advertisement where that
part has actually been reviewed by BlackRock and approved unless, after
initially granting such approval, circumstances surrounding such use have
materially changed such that BlackRock reasonably believes that such
Advertisement violates this Section.
(h) Xxx Xxxxxx shall not use the BlackRock Property in any manner that
materially adversely affects (i) the financial condition, properties, prospects,
business or results of operations of BlackRock or its affiliates, (ii) the
reputation, brand, goodwill or image of BlackRock or its affiliates, (iii) the
regulatory relationships of BlackRock or its affiliates or (iv) with respect to
BlackRock, its affiliates, or Xxx Xxxxxx, the material licenses, qualifications
issued by or from, or authorities to carry on business granted by, governmental
or quasi-governmental entities, regulatory or self-regulatory organizations.
(i) Each Advertisement in written or documentary form and other written use
of the BlackRock Property that distinguishes Xxx Xxxxxx'x products and services
in the marketplace shall include in a reasonably prominent manner an attribution
clause as a footnote or other annotation to the effect that the BlackRock
Property includes trade or service marks of BlackRock and is used under license.
BlackRock acknowledges that an attribution clause placed on the front or back
cover, or first or last page, of a multiple-page Advertisement (e.g., a pitch
book, a "PowerPoint" presentation or a pamphlet) is reasonably prominent
(provided that the attribution clause is otherwise reasonably prominent with
respect to its size, font and color).
(j) Xxx Xxxxxx agrees that BlackRock owns all right, title and interest in
and to the BlackRock Property, and that all goodwill arising from the use of the
BlackRock Property will inure exclusively to the benefit of BlackRock. Except as
otherwise specifically provided herein, BlackRock reserves all rights to the
BlackRock Property, and this Agreement shall not be construed to transfer to Xxx
Xxxxxx any ownership right to, or equity interest in, any of the BlackRock
Property. Such license shall terminate upon termination of this Agreement.
2. Consultation on Securities - Identification of Securities for Inclusion on
the Target Portfolio List. (a) Within ten (10) days of Xxx Xxxxxx'x written
request, BlackRock shall provide to Xxx Xxxxxx a list of securities, selected in
accordance with the securities selection criteria set forth in Exhibit A, in
connection with each Trust (the "Target Portfolio List"). The "Target Portfolio
List" with respect to a Trust will contain relevant details needed to identify
the portfolio, including but not limited to, each issuer's name, CUSIP, coupon,
maturity as well as target allocation and the portfolio's target average
maturity. Xxx Xxxxxx will select a portfolio of securities from the Target
Portfolio List provided by BlackRock. Xxx Xxxxxx will make best efforts to fully
replicate the portfolio based upon the Target Portfolio List as provided by
BlackRock with respect to a Trust, but in certain circumstances will not be able
to purchase certain securities in the recommended target allocation. Prior to
the deposit of the securities in a Trust's portfolio, Xxx Xxxxxx agrees to
consult with BlackRock regarding any security Xxx Xxxxxx recommends for
inclusion in such Trust's portfolio which was not included on the Target
Portfolio List provided by BlackRock for such Trust. In its discretion,
BlackRock may object to the inclusion of the security selected by Xxx Xxxxxx for
inclusion in a Trust's portfolio. Once the final list of securities has been
agreed upon by Xxx Xxxxxx and BlackRock, the securities selected by Xxx Xxxxxx
from the Target Portfolio List and any other securities will be deposited in the
related Trust's portfolio (the "Portfolio Securities"). It is understood that
Xxx Xxxxxx shall use the Target Portfolio List for a Trust solely in connection
with the creation, administration, marketing, promotion and distribution of the
Trust, including in connection with determining the Portfolio Securities for
such Trust, and for no other purpose or Trust. Xxx Xxxxxx acknowledges and
agrees that BlackRock provides investment advice and recommendations to, and
executes portfolio transactions on behalf of, other clients and its own account,
in securities included on the Target Portfolio Lists, and the inclusion of a
security on the Target Portfolio List for a Trust or such security's inclusion
as a Portfolio Security of the Trust shall in no way impair or restrict
BlackRock's ability to trade, hold or dispose of such security on behalf of its
itself or its affiliates or clients.
(b) In addition, BlackRock hereby agrees to consult periodically with and
advise Xxx Xxxxxx regarding the securities or methodologies used to identify the
Target Portfolio Lists at a time and place mutually agreed upon by the parties.
These consultations may include providing Xxx Xxxxxx a written credit analysis
on certain issuers selected by BlackRock or by making portfolio management
personnel available to Xxx Xxxxxx. With the prior consent of BlackRock, which
consent will not be unreasonably withheld, Xxx Xxxxxx may permit others
associated with the operation, management or marketing of the Trusts to
participate in these consultations.
(c) BlackRock 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.
3. BlackRock's Services Unique. BlackRock and Xxx Xxxxxx agree that the
services to be performed by BlackRock as set forth herein are unique and may not
be performed by anyone other than BlackRock.
4. Fees. For the services provided hereunder and the license granted pursuant
to Section 1, Xxx Xxxxxx, on behalf of each of the Trusts, agrees that each
Trust shall pay BlackRock: (a) a fee equal to 15 basis points (0.15%) of the net
asset value of such Trust as of the end of the initial offering period of such
Trust (the "Initial Fee") and (b) an annual fee equal to 3 basis points (0.03%)
of the average daily Evaluation Price of all assets comprising such Trust (the
"Annual License Fee"). Such Initial Fee shall be paid by the trustee of each
Trust to BlackRock within thirty (30) days following the end of the initial
offering period of such Trust. The trustee of each Trust shall accrue such
Annual License Fee daily and pay such Annual License Fee to BlackRock in
installments within fifteen (15) days following the end of each calendar quarter
during the term of such Trust. "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, and the rules thereunder.
5. Term. Subject to Section 8, 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 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.
6. 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.
7. 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 BlackRock, and that any services performed hereunder by BlackRock
shall be as an independent contractor and not as an employee or agent of Xxx
Xxxxxx or any Trust. BlackRock shall have no authority whatsoever to bind Xxx
Xxxxxx or any Trust on any agreement or obligation and BlackRock agrees that
BlackRock shall not hold itself out as an employee or agent of Xxx Xxxxxx or any
Trust.
8. Termination. (a) BlackRock 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 BlackRock that is not
remedied within ten (10) business days after written notice thereof.
(c) BlackRock 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 8(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.
9. 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)), 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, 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 9 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 9, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section 9 shall survive the termination
of this Agreement.
10. 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, BlackRock 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 BlackRock or in response to questions of the
media or others, without Xxx Xxxxxx'x prior written consent, except that
BlackRock 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.
11. Indemnification. (a) By Xxx Xxxxxx. In the event any claim is brought by
any third party against BlackRock 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 BlackRock Property by the Trusts, Xxx Xxxxxx, or any of
Xxx Xxxxxx'x affiliates, BlackRock 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
BlackRock 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. BlackRock
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, Neither BlackRock nor
any of its 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 BlackRock or any of its
affiliates.
(b) By BlackRock. In the event any claim is brought by any third party
against Xxx Xxxxxx or any of Xxx Xxxxxx'x affiliates that relates to, arises out
of or is based upon the performance by BlackRock of its obligations hereunder,
or the failure of BlackRock to comply with any law, rule or regulation, Xxx
Xxxxxx or Xxx Xxxxxx'x affiliates, as the case may be, shall promptly notify
BlackRock and BlackRock shall defend such claim at its expense and under its
control. BlackRock shall indemnify and hold harmless Xxx Xxxxxx 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 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, BlackRock shall not be required to pay any settlement amount
that it has not approved in advance. Notwithstanding the above, neither Xxx
Xxxxxx 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 or Xxx Xxxxxx'x affiliates.
(c) The indemnifications set forth in this Section 11 shall survive the
termination of this Agreement for any cause whatsoever.
12. Review of Registration Statement and other materials. BlackRock hereby
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 BlackRock and the securities selection process. Xxx Xxxxxx may
also make reference to BlackRock's name in connection with marketing and
promotional materials related to the Trusts and in any description of the
Portfolios contained in any prospectus or other regulatory filing provided that:
i) the relationship between the BlackRock and Xxx Xxxxxx is described as
consultative in nature and not as providing sub-advisory services to
Xxx Xxxxxx or to the Trusts, nor is BlackRock to be considered a
sub-advisor or fiduciary to the Trusts;
ii) the scope of services provided by BlackRock is clearly disclosed;
iii) the content and information provided by BlackRock is described in all
material respects in conformity with this Agreement, as then in
effect, and;
BlackRock must review and approve in writing each use and reference of the
BlackRock name provided, however, that documents previously approved by
BlackRock as to which statistical information has simply been updated need not
be resubmitted to BlackRock. BlackRock agrees that such approval will not be
unduly delayed and agrees to approve all references to its name within 10
business days of receiving a copy of such materials and a written request for
their approval.
13. 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.
14. 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.
15. 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.
16. 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 BlackRock:
BlackRock Financial Management, Inc.
00 Xxxx 00xx Xxxxxx Xxx Xxxx, XX 00000
Attn: General Counsel
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to:
Xxx Xxxxxx Funds Inc.
000 Xxxxx Xxxxxx
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.
17. 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.
18. 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: ______________________
BLACKROCK FINANCIAL MANAGEMENT, INC.
By: ______________________
Name: ______________________
Title: ______________________
EXHIBIT A
Securities Selection Criteria. The Trust invests in a portfolio consisting of
30-40 issues of intermediate term corporate bonds. The portfolio is selected by
Xxx Xxxxxx from a list of corporate bonds researched and selected by the fixed
income team of BlackRock. In selecting bonds for the Trust, the following
factors are considered, among others:
* the bonds must have a Standard & Poor's rating of at least "BBB-", a
Xxxxx'x Investors Service, Inc. rating of at least "Baa3" or, if not
rated, credit characteristics similar to those of comparable bonds
that were so rated as to be acceptable for acquisition by the Trust in
the opinion of Xxx Xxxxxx or BlackRock;
* the prices and liquidity of the bonds relative to other bonds of
comparable quality and maturity;
* the current income provided by the bonds;
* the diversification of bonds as to purpose of issue and location of
issuer; and the probability of early return of principal or high legal
or event risk.
