(h)(12)
LICENSE AGREEMENT
-----------------
LICENSE AGREEMENT, dated as of March 31, 1999 (the "Commencement Date")
by and between STANDARD & POOR'S, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P"), a New York corporation, having an office at 00 Xxxxxxxx, Xxx Xxxx, XX
00000, and Xxxxxxx Xxxxxx Investments, Inc. ("Licensee") , a Delaware
corporation having an xxxxxx xx Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000-0000.
WHEREAS, S&P compiles, calculates, maintains and owns rights in and to
the S&P 500 Composite Stock Price Index and to the proprietary data therein
contained (such rights being hereinafter individually and collectively referred
to as the "S&P 500 Index"); and
WHEREAS, S&P uses in commerce and has trade name and trademark rights
to the designations "Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard &
Poor's 500" and "500", in connection with the S&P 500 Index (such rights being
hereinafter individually and collectively referred to as the "S&P Marks") ; and
WHEREAS, Licensee wishes to use the S&P 500 Index as a component of the
product or products described in Exhibit A attached hereto and made a part
hereof (individually and collectively referred to as the "Product") ; and
WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in connection with making
disclosure about the Product under applicable law, rules and regulations in
order to indicate that S&P is the source of the S&P 500 Index; and
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[Xxxxxxx Enhanced fund]
WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P
500 Index and the S&P Marks in connection with the Product pursuant to the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of License.
----------------
(a) Subject to the terms and conditions of this Agreement, S&P
hereby grants to Licensee a non-transferable, non-exclusive license (i) to use
the S&P 500 Index as a component of the Product to be marketed and/or promoted
by Licensee and (ii) to use and refer to the S&P Marks in connection with the
distribution, marketing and promotion of the Product (including in the name of
the Product) and in connection with making such disclosure about the Product as
Licensee deems necessary or desirable under any applicable law, rules,
regulations or provisions of this Agreement, but, in each case, only to the
extent necessary to indicate the source of the S&P 500 Index. It is expressly
agreed and understood by Licensee that no rights to use the S&P 500 Index and
the S&P Marks are granted hereunder other than those specifically described and
expressly granted herein.
(b) S&P agrees that no person or entity (other than the
Licensee) shall need to obtain a license from S&P with respect to the Product.
2. Term.
----
The term of this Agreement shall commence on the Commencement
Date and shall continue in effect thereafter until it is terminated in
accordance with its terms.
3. License Fees.
------------
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[Xxxxxxx Enhanced fund] -2-
(a) Licensee shall pay to S&P the license fees ("License
Fees") specified and provide the data called for in Exhibit B, attached hereto
and made a part hereof.
(b) During the term of this Agreement and for a period of one
(1) year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee.
4. Termination.
-----------
(a) At any time during the term of this Agreement, either
party may give the other party sixty (60) days prior written notice of
termination if the terminating party believes in good faith that material damage
or harm is occurring to the reputation or goodwill of that party by reason of
its continued performance hereunder, and such notice shall be effective on the
date specified therein of such termination, unless the other party shall correct
the condition causing such damage or harm within the notice period.
(b) In the case of breach of any of the material terms or
conditions of this Agreement by either party, the other party may terminate this
Agreement by giving sixty (60) days prior written notice of its intent to
terminate, and such notice shall be effective on the date specified therein for
such termination unless the breaching party shall correct such breach within the
notice period.
(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of the S&P 500 Index and, in such event, to
terminate this Agreement if S&P does not offer a
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[Xxxxxxx Enhanced fund] -3-
replacement or substitute index. In the event that S&P intends to discontinue
the S&P 500 Index, S&P shall give Licensee at least one (1) year's written
notice prior to such discontinuance, which notice shall specify whether a
replacement or substitute index will be made available.
Licensee shall have the option hereunder within sixty (60)
days after receiving such written notice from S&P to notify S&P in writing of
its intent to use the replacement or substitute index, if any, under the terms
of this Agreement. In the event that Licensee does not exercise such option or
no substitute or replacement index is made available, this Agreement shall be
terminated as of the date specified in the S&P notice and the License Fees to
the date of such termination shall be computed as provided in Subsection 4(f).
(d) Licensee may terminate this Agreement upon ninety (90)
days prior written notice to S&P if (i) Licensee is informed of the final
adoption of any legislation or regulation or the issuance of any interpretation
that in Licensee's reasonable judgment materially impairs Licensee's ability to
market and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(e) S&P may terminate this Agreement upon ninety (90) days
(or upon such lesser period of time if required pursuant to a court order) prior
written notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide the
S&P 500 Index and S&P Marks under this Agreement in connection with such
Product; or (ii) any litigation or proceeding is
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[Xxxxxxx Enhanced fund] -4-
threatened or commenced and S&P reasonably believes that such litigation or
proceeding would have a material and adverse effect upon the S&P Marks and/or
the S&P 500 Index or upon the ability of S&P to perform under this Agreement. In
such event the License Fees to the date of such termination shall be computed as
provided in Subsection 4(f).
(f) In the event of termination of this Agreement as provided
in Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable License
Fees shown in Exhibit B on the basis of the number of elapsed days in the
current term.
(g) Upon termination of this Agreement, Licensee shall cease
to use the S&P 500 Index and the S&P Marks in connection with the Product;
provided that Licensee may continue to utilize any previously printed materials
which contain the S&P Marks for a period of ninety (90) days following such
termination.
5. S&P's Obligations.
-----------------
(a) It is the policy of S&P to prohibit its employees who are
directly responsible for changes in the components of the S&P 500 Index from
purchasing or beneficially owning any interest in the Product and S&P believes
that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any investors or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.
(b) S&P shall not and is in no way obliged to engage in any
marketing or promotional activities in connection with the Product or in making
any representation or statement to investors or prospective investors
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[Xxxxxxx Enhanced fund] -5-
in connection with the promotion by Licensee of the Product.
(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows: (i)
S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the S&P 500 Index; and
(ii) S&P shall respond in a timely fashion to any reasonable requests for
information by Licensee regarding the S&P 500 Index.
(d) S&P or its agent shall calculate and disseminate the S&P
500 Index at least once each fifteen (15) seconds in accordance with its current
procedures, which procedures may be modified by S&P.
(e) S&P shall promptly correct or instruct its agent to
correct any mathematical errors made in S&P's computations of the S&P 500 Index
which are brought to S&P's attention by Licensee, provided that nothing in this
Section 5 shall give Licensee the right to exercise any judgment or require any
changes with respect to S&P's method of composing, calculating or determining
the S&P 500 Index; and, provided further, that nothing herein shall be deemed to
modify the provisions of Section 9 of this Agreement.
6. Informational Materials Review.
------------------------------
Licensee shall use its best efforts to protect the goodwill
and reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, application forms, contracts, videos, advertisements,
brochures and promotional and any other similar
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[Xxxxxxx Enhanced fund] -6-
informational materials (including documents required to be filed with
governmental or regulatory agencies) that in any way use or refer to S&P, the
S&P 500 Index, or the S&P Marks (the "Informational Materials"). S&P's approval
shall be required with respect to the use of and description of S&P, the S&P
Marks and the S&P 500 Index and shall not be unreasonably withheld or delayed by
S&P. Specifically, S&P shall notify Licensee of its approval or disapproval of
any Informational Materials within forty-eight (48) hours (excluding Saturday,
Sunday and New York Stock Exchange Holidays) following receipt thereof from
Licensee. Any disapproval shall indicate S&P's reasons therefor. Any failure by
S&P to respond within such forty-eight (48) hour period shall be deemed to
constitute a waiver of S&P's right to review such Informational Materials.
Informational Materials shall be addressed to S&P, c/o Xxxxxx
Xxxxxxxxxx, Specialist - Index Licensing/Marketing, Equity Index Services, at
the address specified in Subsection 12(d). Informational Materials may be
submitted via facsimile (to 000-000-0000 or 212-412-0429) if they are less than
20 pages and legible after transmission. Once Informational Materials have been
approved by S&P, subsequent Informational Materials which do not alter the use
or description of S&P, the S&P Marks or the S&P 500 Index need not be submitted
for review and approval by S&P.
7. Protection of Value of License.
------------------------------
(a) During the term of this Agreement, S&P shall use its best
efforts to maintain in full force and effect federal registrations for "Standard
& Poor's(R)," "S&P(R)", and S&P 500(R)". S&P shall at S&P's own expense and sole
discretion exercise S&P's common law and statutory rights against infringement
of the S&P Marks, copyrights and other proprietary rights.
(b) Licensee shall cooperate with S&P in the maintenance of
such rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time reasonably request, and shall use the
following notice when
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[Xxxxxxx Enhanced fund] -7-
referring to the S&P 500 Index or the S&P Marks in any Informational Material:
"Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard &
Poor's 500", and "500" are trademarks of The XxXxxx-Xxxx
Companies, Inc. and have been licensed for use by Xxxxxxx
Xxxxxx Investments, Inc. The Xxxxxxx Select 500 Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the
advisability of investing in the Xxxxxxx Select 500 Fund.
or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Marks referred
to in the Informational Material.
8. Proprietary Rights.
------------------
(a) Licensee acknowledges that the S&P 500 Index is selected,
coordinated, arranged and prepared by S&P through the application of methods and
standards of judgment used and developed through the expenditure of considerable
work, time and money by S&P. Licensee also acknowledges that the S&P 500 Index
and the S&P Marks are the exclusive property of S&P, that S&P has and retains
all proprietary rights therein (including, but not limited to trademarks and
copyrights) and that the S&P 500 Index and its compilation and composition and
changes therein are in the control and discretion of S&P.
(b) S&P reserves all rights with respect to the S&P 500 Index
and the S&P Marks except those expressly licensed to Licensee hereunder.
(c) Each party shall treat as confidential and shall not
disclose or transmit to any third party any documentation or other written
materials that are marked as "Confidential and
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[Xxxxxxx Enhanced fund] -8-
Proprietary" by the providing party ("Confidential Information"). Confidential
Information shall not include (i) any information that is available to the
public or to the receiving party hereunder from sources other than the providing
party (provided that such source is not subject to a confidentiality agreement
with regard to such information) or (ii) any information that is independently
developed by the receiving party without use of or reference to information from
the providing party. Notwithstanding the foregoing, either party may reveal
Confidential Information to any regulatory agency or court of competent
jurisdiction if such information to be disclosed is (a) approved in writing by
the other party for disclosure or (b) required by law, regulatory agency or
court order to be disclosed by a party, provided, if expressly permitted by law,
that prior written notice of such required disclosure is given to the other
party and provided further that the providing party shall cooperate with the
other party to limit the extent of such disclosure. The provisions of this
Subsection 8(c) shall survive any termination of this Agreement for a period of
five (5) years from disclosure by either party to the other of the last item of
such Confidential Information.
9. Warranties; Disclaimers.
-----------------------
(a) S&P represents and warrants that S&P has the right to
grant the rights granted to Licensee herein and that the license granted herein
shall not infringe any trademark, copyright or other proprietary right of any
person not a party to this Agreement.
(b) Licensee agrees expressly to be bound itself by and
furthermore to include all of the following disclaimers and limitations in each
prospectus or each Statement of Additional Information ("SAI") relating to the
Product, provided the SAI is incorporated by reference into the prospectus and
the prospectus contains disclosure regarding the S&P 500 Index that conforms to
the notice in Subsection 7(b), including a cross reference to the
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[Xxxxxxx Enhanced fund] -9-
SAI disclosure. Licensee shall furnish a copy of the prospectus and SAI thereof
to S&P:
The Xxxxxxx Select 500 Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P"). S&P makes no representation or warranty, express or implied, to the
owners of the Xxxxxxx Select 500 Fund or any member of the public regarding the
advisability of investing in securities generally or in the Xxxxxxx Select 500
Fund particularly or the ability of the S&P 500 Index to track general stock
market performance. S&P's only relationship to the Xxxxxxx Xxxxxx Investments,
Inc. is the licensing of certain trademarks and trade names of S&P and of the
S&P 500 Index which is determined, composed and calculated by S&P without regard
to the Xxxxxxx Xxxxxx Investments, Inc. or the Xxxxxxx Select 500 Fund. S&P has
no obligation to take the needs of Xxxxxxx Xxxxxx Investments, Inc. or the
owners of the Xxxxxxx Select 500 Fund into consideration in determining,
composing or calculating the S&P 500 Index. S&P is not responsible for and has
not participated in the determination of the prices and amount of the Xxxxxxx
Select 500 Fund or the timing of the issuance or sale of the Xxxxxxx Select 500
Fund or in the determination or calculation of the equation by which the Xxxxxxx
Select 500 Fund is to be converted into cash. S&P has no obligation or liability
in connection with the administration, marketing or trading of the Xxxxxxx
Select 500 Fund.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
500 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY XXXXXXX XXXXXX INVESTMENTS, INC.,
OWNERS OF THE XXXXXXX SELECT 500 FUND, OR ANY OTHER PERSON OR ENTITY FROM THE
USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. S&P MAKES NO EXPRESS OR
IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A
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PARTICULAR PURPOSE OR USE WITH RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED
THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY
LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES
(INCLUDING LOST PROFITS) , EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Any changes in the foregoing disclaimers and limitations must be
approved in advance in writing by an authorized officer of S&P.
(c) Each party represents and warrants to the other that it has the
authority to enter into this Agreement according to its terms and that its
performance does not violate any laws, regulations or agreements applicable to
it.
(d) Licensee represents and warrants to S&P that the Product shall at
all times comply with the description in Exhibit A.
(e) Licensee represents and warrants to S&P that the Product shall not
violate any applicable law, including but not limited to banking, commodities
and securities laws.
(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), in no
event shall the cumulative liability of S&P to Licensee exceed the average
annual License Fees actually paid to S&P hereunder.
(g) Use of any marks by Licensee in connection with its Product
(including in the name of such Product) which are not the S&P Marks is at
Licensee's sole risk.
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(h) The provisions of this Section 9 shall survive any termination of
this Agreement.
10. Indemnification.
---------------
(a) Licensee shall indemnify and hold harmless S&P, its
affiliates and their officers, directors, employees and agents against any and
all judgments, damages, costs or losses of any kind (including reasonable
attorneys' and experts' fees) as a result of any claim, action, or proceeding
that arises out of or relates to (a) its actions or inactions under this
Agreement, except insofar as it relates to a breach by S&P of its
representations or warranties hereunder, or (b) the Product; provided, however,
that S&P notifies Licensee promptly of any such claim, action or proceeding.
Licensee shall periodically reimburse S&P for its reasonable expenses incurred
under this Subsection 10 (a). S&P shall have the right, at its own expense, to
participate in the defense of any claim, action or proceeding against which it
is indemnified hereunder; provided, however, it shall have no right to control
the defense, consent to judgment, or agree to settle any such claim, action or
proceeding without the written consent of Licensee without waiving the indemnity
hereunder. Licensee, in the defense of any such claim, action or proceeding
except with the written consent of S&P, shall not consent to entry of any
judgment or enter into any settlement which either (a) does not include, as an
unconditional term, the grant by the claimant to S&P of a release of all
liabilities in respect of such claims or (b) otherwise adversely affects the
rights of S&P. This provision shall survive the termination or expiration of
this Agreement.
(b) S&P shall indemnify and hold harmless Licensee, its affiliates and
their officers, directors, employees and agents against any and all judgments,
damages, costs or losses of any kind (including reasonable attorneys' and
experts' fees) as a result of any claim, action, or proceeding that arises out
of or relates to any breach by S&P of this Agreement or its
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[Xxxxxxx Enhanced fund] -12-
representations or warranties under this Agreement; provided, however, that (a)
Licensee notifies S&P promptly of any such claim, action or proceeding; (b)
Licensee grants S&P control of its defense and/or settlement; and (c) Licensee
cooperates with S&P in the defense thereof. S&P shall periodically reimburse
Licensee for its reasonable expenses incurred under this Subsection 10(b).
Licensee shall have the right, at its own expense, to participate in the defense
of any claim, action or proceeding against which it is indemnified hereunder;
provided, however, it shall have no right to control the defense, consent to
judgment, or agree to settle any such claim, action or proceeding without the
written consent of S&P without waiving the indemnity hereunder. S&P, in the
defense of any such claim, action or proceeding, except with the written consent
of Licensee, shall not consent to entry of any judgment or enter into any
settlement which either (a) does not include, as an unconditional term, the
grant by the claimant to Licensee of a release of all liabilities in respect of
such claims or (b) otherwise adversely affects the rights of Licensee. This
provision shall survive the termination or expiration of this Agreement.
11. Suspension of Performance.
-------------------------
Neither S&P nor Licensee shall bear responsibility or
liability for any losses arising out of any delay in or interruptions of their
respective performance of their obligations under this Agreement due to any act
of God, act of governmental authority, act of the public enemy or due to war,
the outbreak or escalation of hostilities, riot, fire, flood, civil commotion,
insurrection, labor difficulty (including, without limitation, any strike, or
other work stoppage or slow down), severe or adverse weather conditions,
communications line failure, or other similar cause beyond the reasonable
control of the party so affected.
12. Other Matters.
-------------
(a) This Agreement is solely and exclusively between the
parties hereto and shall not be assigned or transferred by
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[Xxxxxxx Enhanced fund] -13
either party, without prior written consent of the other party, and any attempt
to so assign or transfer this Agreement without such written consent shall be
null and void.
(b) This Agreement constitutes the entire agreement of the parties
hereto with respect to its subject matter and may be amended or modified only by
a writing signed by duly authorized officers of both parties. This Agreement
supersedes all previous agreements between the parties with respect to the
subject matter of this Agreement. There are no oral or written collateral
representations, agreements, or understandings except as provided herein.
(c) No breach, default, or threatened breach of this Agreement by
either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.
(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.
Notice to S&P: Standard & Poor's
------------- 00 Xxxxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx Xxxxxxxx
Senior Vice President
Index Services
Fax #: (000) 000-0000
Notice to Licensee: Xxxxxxx Xxxxxx Investments, Inc.
------------------ Two International Place
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Boston, Massachusetts 02110-4103
Attn.: Xxxxxxxx Xxxxxxx
Fax #: (000) 000 0000
(e) This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of New York.
(f) Each party agrees that in connection with any legal action or
proceeding arising with respect to this Agreement, they will bring such action
or proceeding only in the United States District Court for the Southern District
of New York or in the Supreme Court of the State of New York in and for the
First Judicial Department and each party agrees to submit to the jurisdiction of
such court and venue in such court and to waive any claim that such court is an
inconvenient forum.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
XXXXXXX XXXXXX INVESTMENTS, INC. STANDARD & POOR'S
a division of
The XxXxxx-Xxxx Companies, Inc.
BY: /s/Xxxxxx Xxxxxx BY: /s/Xxxxxx X. Xxxxxxxx
------------------------------ ---------------------------------
Xxxxxx Xxxxxx Xxxxxx X. Xxxxxxxx
------------------------------ ---------------------------------
(Print Name) (Print Name)
Managing Director Senior V.P. Index Services
------------------------------ ---------------------------------
(Print Title) (Print Title)
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EXHIBIT A
---------
PRODUCT DESCRIPTION
-------------------
Product: Xxxxxxx Select 500 Fund (the "Product") is a public mutual fund whose
investment objective is that it seeks to provide long term growth and income
through investment in selected stocks of the S&P 500 Index.
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[Xxxxxxx Enhanced fund] -16-
EXHIBIT B
---------
LICENSE FEES
------------
Licensee shall pay S&P License Fees computed as follows:
The annual License Fees shall be the greater of $10,000 (the "Minimum Annual
Fee") or one basis point (.0001) of the average daily net assets of the Product
computed quarterly. The Minimum Annual Fee shall be payable on the Commencement
Date and each one-year anniversary thereof. Amounts in excess of the Minimum
Annual Fee shall be paid to S&P within thirty (30) days after the close of each
calendar quarter in which they are incurred; each such payment shall be
accompanied by a statement setting forth the basis for its calculation.
The parties agree that the terms upon which License Fees are calculated pursuant
to this Exhibit B shall be considered "Confidential Information" for purposes of
Subsection 8(c) of this Agreement.
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[Xxxxxxx Enhanced fund] -17-
