EXHIBIT 2.2
AGREEMENT
THIS AGREEMENT, made as of this 8th day of August, 2013, by and between
Horizon Investment Services, LLC ("Horizon"), an Indiana limited liability
company, and Invesco Capital Markets, Inc. ("Invesco"), a Delaware corporation.
WITNESSETH:
WHEREAS, Horizon is an investment adviser registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, Invesco sponsors, underwrites and distributes a wide array of unit
investment trusts ("UITs");
WHEREAS, Invesco desires to establish one or more UITs that will each
initially invest all or a portion of its assets in securities selected by
Horizon in accordance with the securities selection criteria set forth in
Exhibit A attached hereto (the "Trusts");
WHEREAS, Invesco further desires the services of Horizon in advising and
consulting with Invesco 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 Horizon;
WHEREAS, Horizon is willing to provide the aforesaid services to Invesco
under the terms and conditions hereinafter set forth; and
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 Consultation on Securities. (a) During the term of this
Agreement, Invesco shall provide Horizon 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, Horizon will provide to Invesco within ten (10) days of Invesco's
written request a list of all 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 Invesco
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, subject to the prior approval of
Horizon, which approval will not be unreasonably withheld.
(b) Horizon will provide Invesco with information reasonably requested by
Invesco about the Portfolio Securities for use by Invesco in preparing updated
prospectus disclosure and marketing materials for the Trusts. Horizon also
agrees to review and comment upon disclosure in the Registration Statement
referred to in Section 12 hereof.
(c) Horizon shall periodically consult with and advise Invesco 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 Horizon, which consent will not be unreasonably withheld,
Invesco may permit others to participate in these consultations.
2. Horizon's Services Unique. Horizon and Invesco agree that the services to
be performed by Horizon as set forth herein are unique and may not be performed
by anyone other than Horizon.
3. Fees. For the services to be performed hereunder, Invesco, on behalf of
each Trust, agrees that each Trust shall pay Horizon a fee equal to ten basis
points (0.10%) of the net asset value of such Trust as of the end of the initial
offering period of such Trust. Such fee shall be paid by the trustee of each
Trust to Horizon within thirty (30) days following the end of the initial
offering period of such Trust.
4. 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 (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.
5. Exclusivity and Right of First Refusal. (a) Horizon covenants and agrees
that during the term of this Agreement, neither Horizon, 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 Horizon 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) Horizon covenants and agrees that, during the Term of this Agreement,
neither Horizon 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
Horizon shall have first promptly delivered a bona fide written offer to Invesco
to act as sponsor, depositor, adviser, promoter, underwriter or distributor of
such a unit investment trust and Invesco shall have failed to provide a written
acceptance of such offer to Horizon within 30 days after receipt of such offer.
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
Invesco and Horizon, and that any services performed hereunder by Horizon shall
be as an independent contractor and not as an employee or agent of Invesco or
any Trust. Horizon shall have no authority whatsoever to bind Invesco or any
Trust on any agreement or obligation Horizon agrees that Horizon shall not hold
itself out as an employee or agent of Invesco or any Trust.
8. Termination. (a) Horizon may terminate this Agreement immediately upon a
material breach of any representation, warranty or covenant of Invesco that is
not remedied within ten (10) business days after written notice.
(b) Invesco may terminate this Agreement immediately upon a material breach
of any representation, warranty or covenant of Horizon that is not remedied
within ten (10) business days after written notice thereof.
(c) Horizon and Invesco 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.
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 9 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, Horizon may not refer to Invesco or any affiliates in any kind
of communications, whether oral, written or electronic, or otherwise, and
whether in a piece published by Horizon or in response to questions of the media
or others, without Invesco's prior written consent, except that Horizon 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 Invesco.
11. Indemnification. (a) By Invesco. In the event any claim is brought by any
third party against Horizon or any of its affiliates that relates to, arises out
of or is based upon the performance by Invesco of its obligations hereunder, or
the failure of Invesco, or any of Invesco's affiliates, as the case may be, to
comply with any law, rule or regulation relating to the Trusts, Horizon shall
promptly notify Invesco and Invesco shall defend such claim at Invesco's expense
and under Invesco's control. Invesco shall indemnify and hold harmless Horizon
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. Horizon 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 Invesco shall not be required to pay any settlement amount that it has not
approved in advance. Notwithstanding the above, Horizon 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 Horizon or any of its affiliates.
(b) By Horizon. In the event any claim is brought by any third party against
Invesco, any of the Trusts, or any of Invesco's affiliates that relates to,
arises out of or is based upon the performance by Horizon of its obligations
hereunder, or the failure of Horizon to comply with any law, rule or regulation,
Invesco, the Trusts, or Invesco's affiliates, as the case may be, shall promptly
notify Horizon and Horizon shall defend such claim at its expense and under its
control. Horizon shall indemnify and hold harmless Invesco, the Trusts, and
Invesco's 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. Invesco, the
Trusts, or Invesco's 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, Horizon shall not be required to pay any
settlement amount that it has not approved in advance. Notwithstanding the
above, neither Invesco, the Trusts, nor any of Invesco's 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 Invesco, the Trusts, or Invesco's 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. Horizon 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
Horizon and the securities selection process.
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 Horizon:
Horizon Investment Services, LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
If to Invesco:
0000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
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.
INVESCO CAPITAL MARKETS, INC.
By: /s/ XXXX X. XXXXXXX
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Name: XXXX X. XXXXXXX
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Title: Vice President
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HORIZON INVESTMENT SERVICES, LLC
By: /s/ XXXXXXX XXXXXXX
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Name: XXXXXXX XXXXXXX
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Title: Chief Executive Officer
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EXHIBIT A
The portfolio of each Trust will primarily consist of stocks of companies
headquartered, incorporated, or with a significant presence in emerging market
countries. Invesco considers emerging market countries to be those in the
regions of Latin America, Asia (excluding Japan), Africa and Eastern Europe that
generally have low to middle per capita income. Securities selected by Horizon
shall be based on such factors as may be reasonably requested by Invesco,
including but not limited to, whether the securities trade in the United States,
diversification among countries, diversification among sectors, market
capitalization, historical trading volume on an absolute and relative basis and
rankings of securities based on the following quality, value, momentum and
performance-based factors:
QUALITY FACTORS:
o Earnings predictability
o Return on assets
o Three-year earnings growth
o Three-year equity growth rate
VALUE FACTORS:
o Dividend yield
o Price/earnings ratio
o Price/book value
o Price/sales ratio
MOMENTUM FACTORS:
o Earnings per share change last quarter
o 12-month change in earnings per share
o Sales charge last quarter
o 12-month change in sales
PERFORMANCE FACTORS:
o Total return for the past two months
o Total return for the past three months
o Total return for the past six months
o Total return for the past twelve months
