EXHIBIT 2.2
LICENSE AGREEMENT
This Agreement is made as of this ____ day of June, 2009, by and between
Xxxxxx Research Group, Inc. a New York corporation ("RRG"), and Xxx Xxxxxx Funds
Inc., a Delaware corporation ("Xxx Xxxxxx").
WITNESSETH:
WHEREAS, RRG is an investment adviser registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, RRG uses in commerce and has certain trade name, trademark and/or
service xxxx rights to the designation "Xxxxxx Research Group, Inc." (the "RRG
Xxxx");
WHEREAS, RRG owns rights to its use of a proprietary investment process to
select securities portfolios (the "RRG Investment Process") and the RRG Xxxx
(such rights, including without limitation, copyright, patent, trademark or
proprietary rights and trade secrets, collectively referred to herein as the
"Property");
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 RRG in
accordance with the securities selection criteria set forth in Exhibit A
attached hereto, and the RRG Investment Process (such UITs are referred to
herein as the "Trusts");
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the Property
for use in connection with the Trusts; and
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires the services of RRG to
act as Supervisor, as defined by the trust indenture governing a particular
Trust, in connection with the Trusts; and
WHEREAS, RRG is willing to license the Property to Xxx Xxxxxx, on behalf of
itself and the Trusts, and is willing to provide the aforesaid services to Xxx
Xxxxxx, under the terms and conditions set forth herein;
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, RRG hereby grants to Xxx Xxxxxx, on behalf of itself and the Trusts,
a nontransferable, limited, non-exclusive license to use and refer within the
United States to the Property solely in connection with the creation,
administration, marketing, promotion and distribution of the Trusts, in such
manner as may be reasonably deemed to be appropriate by Xxx Xxxxxx and subject
to the terms of Section 12 hereof. It is expressly agreed and understood that no
rights to use the Property are granted hereunder other than those specifically
described and expressly granted herein.
(b) RRG covenants and agrees that no person or entity other than Xxx Xxxxxx
shall need to obtain any other license with respect to the Property in
connection with the initial sale of the units of Trusts or subsequent resales of
units of the Trusts in the secondary market.
(c) RRG represents and warrants that it has made common law claims to or
otherwise owns all proprietary rights, including, but not limited to, trade
name, trademark and/or service xxxx and trade secrets, in and to the Property
and has the right to license the same to Xxx Xxxxxx and the Trusts pursuant to
this Agreement.
Except as otherwise specifically provided herein, Xxx Xxxxxx acknowledges
that RRG reserves all rights to the Property, and this Agreement shall not be
construed to transfer to Xxx Xxxxxx any ownership right to, or equity interest
in, any of the Property. Such license shall terminate upon termination of this
Agreement.
2. Selection of Securities. During the period commencing on the date set
forth above and ending on the Initial Term (as defined in Section 6 hereof), Xxx
Xxxxxx shall provide RRG 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, RRG will
provide to Xxx Xxxxxx within twenty (20) days of Xxx Xxxxxx'x written request a
list of securities in accordance with the securities selection criteria set
forth in Exhibit A in connection with each Trust (the "Selected Securities").
Such Selected 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, after consultation with RRG.
RRG 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.
In addition, RRG hereby agrees to consult periodically with and advise Xxx
Xxxxxx regarding the securities or methodologies used to select the Portfolio
Securities at a time and place mutually agreed upon by the parties. With the
prior consent of RRG, 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. Each party hereto shall be
responsible for all of its own expenses incurred in connection with this
Agreement; provided, that in the event that a representative of RRG incurs
travel expenses (i.e., transportation, hotel, meals) in connection with the
above-described activities, Xxx Xxxxxx shall reimburse RRG for all such
reasonable expenses. Notwithstanding the preceding, RRG is not, and shall not
be, obligated to engage in any way or to any extent in any marketing or
promotional activities in connection with the Trusts or in making any
representation or statement to investors or prospective investors in connection
with the marketing or promotion of the Trusts by Xxx Xxxxxx.
3. RRG's Services Unique. RRG and Xxx Xxxxxx agree that the services to be
performed by RRG as set forth herein are unique and may not be performed by
anyone other than RRG.
4. Supervision. RRG shall act as Supervisor, as defined by the trust
agreement governing the particular Trust, in accordance with such trust
agreement. The terms of the trust agreement applicable to the Supervisor are
incorporated herein by reference. In the event that any provision in this
Agreement conflicts in any way with the trust agreement governing a particular
Trust, the provisions of the trust agreement in respect thereof shall control.
5. Fees. (a) For the license granted pursuant to Section 1, Xxx Xxxxxx, on
behalf of each of the Trusts, agrees that each Trust shall pay RRG an annual fee
equal to 17.5 basis points (0.175%) of the average daily Net Asset Value of such
Trust (the "License Fee"). The trustee of each Trust shall accrue such fee daily
and pay such fee to RRG in quarterly installments within fifteen (15) days
following the end of each calendar quarter during the term of such Trust. "Net
Asset Value" as used in this Agreement shall mean "current net asset value" as
defined in Rule 2a-4 under the Investment Company Act of 1940 (the "Investment
Company Act").
(b) For the services to be performed pursuant to Section 4, Xxx Xxxxxx, on
behalf of each Trust, agrees that each Trust shall pay RRG in accordance with
the terms of the trust agreement governing such Trust (the "Supervisor Fee").
(c) If independently audited financial statements for the Trusts are
prepared, upon request by RRG Xxx Xxxxxx shall provide RRG with such audited
financial statements promptly after receipt thereof by Xxx Xxxxxx. RRG may use
such audited financial statements to confirm the accuracy of any one or more
calculations of the License Fee. RRG shall not bear the cost of any such audit.
6. Term. 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 (each, a "Renewal Term") 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. The Initial Term and
the Renewal Term are referred to herein as the "Term".
7. Exclusivity; Right of First Refusal. (a) RRG covenants and agrees that
neither RRG, nor anyone acting on its behalf, shall be associated or involved
with any UIT sponsor, distributor or seller in the creation, marketing or sale
of any non-exchange traded UIT selected using parameters substantially similar
to those described in Exhibit A within the United States other than the Trusts
during the period from the Effective Date until eighteen (18) months thereof
(the "Initial Exclusivity Period").
(b) Provided that Xxx Xxxxxx is in material compliance with all terms and
conditions contained in this Agreement, RRG covenants and agrees that, during
the Initial Exclusivity Period, neither RRG 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 UIT within the United
States unless RRG 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 UIT and Xxx Xxxxxx shall have failed to provide a written
acceptance of such offer to RRG within 30 days after receipt of such offer.
(c) Nothing contained herein shall limit the right of RRG to participate in
the sponsoring, creation, marketing or promotion of any exchange-traded funds,
private placements, separately managed accounts, model portfolios for managed
accounts, mutual funds, hedge funds or any product not subject to the
registration requirements under the Investment Company Act, including, but not
limited to, any investment company (as defined in Section 3(a)(1) of the
Investment Company Act, disregarding the provisions of Sections 3(b) and 3(c)
thereof).
8. Assignment. Neither of the parties hereto may assign its respective rights
and obligations under this Agreement without the prior written consent of the
other party, except that an assignment to an affiliate shall be permitted solely
upon written notice to the other party.
9. 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 RRG, and that the services performed hereunder by RRG shall be as
an independent contractor and not as an employee or agent of Xxx Xxxxxx or any
Trust. Neither party shall have authority whatsoever to bind the other (or, in
the case of RRG, any Trust) on any agreement or obligation and each of the
parties agrees that it shall not hold itself out as an employee or agent of the
other (or, in the case of RRG, of any Trust).
10. Termination. (a) RRG may immediately terminate this Agreement 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 immediately terminate this Agreement upon a material
breach of any representation, warranty or covenant of RRG that is not remedied
within ten (10) business days after written notice thereof.
(c) RRG and Xxx Xxxxxx may terminate this Agreement at any time upon mutual
written agreement to that effect.
Any termination under Section 10(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.
11. Confidentiality. (a) The parties agree that certain material and
information which has or may come into the possession or knowledge of each party
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, a party may reasonably
designate, by notice in writing delivered to the other party, 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 any party
shall not be disclosed by another party to its employees, officers, agents,
service providers or affiliates, except on a need-to-know basis, but may be
disclosed by such other party to state, Federal, or other governmental agencies,
authorities or courts as required by law or regulation, or upon their order or
request provided prompt notice of such order or request is given by such other
party to the party to which such information belongs, if such notice is legally
permitted.
(c) No information that would otherwise be proprietary or confidential for
purposes of this Agreement pursuant to subsections (a) or (b) above shall be
subject to the restrictions on disclosure imposed by this Section in the event
and to the extent that (i) such information is in, or becomes part of, the
public domain otherwise than through the fault of a party to which such
information does not belong, (ii) such information was known to such party prior
to the execution of this Agreement, or (iii) such information was revealed to
such party by a third person, and which the receiving party reasonably believes
has been obtained by such third person not in violation of any existing
confidentiality or non-disclosure agreement.
(d) Each party acknowledges and agrees that a breach of this Section 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, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section shall survive the termination of
this Agreement.
12. Covenants. During the period of this Agreement and for as long as any of
the Trusts remains outstanding, each of the parties agrees 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, neither party may refer to the other party or any of the other
party's affiliates, in any kind of communications, whether oral, written or
electronic, or otherwise, and whether in a piece published by such party or in
response to questions of the media or others, without the other party's prior
consent, except that such consent shall not be required to the extent that the
content of a communication is substantially similar to information included in
(i) a communication to which the party has previously given consent, (ii) any
Registration Statement or (iii) other publicly available materials produced by
the party that is being referred to or described. Notwithstanding anything to
the contrary in this paragraph, a party may withdraw consent upon reasonable
written notice to the other party. Upon withdrawal of consent, the notified
party may continue to distribute any existing inventories of previously
consented-to printed materials.
13. Indemnification. (a) By Xxx Xxxxxx. In the event any claim is brought by
any third party against RRG or any of its affiliates that relates to, arises out
of or is based upon the performance by Xxx Xxxxxx of its obligations hereunder
(including, but not limited to, the marketing, promotion and distribution of the
Trusts), 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 Property by the Trusts, Xxx Xxxxxx, or any of Xxx Xxxxxx'x
affiliates, RRG 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 RRG 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. RRG 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, RRG or 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 RRG or such affiliates, or actions or inactions by RRG or such
affiliates in connection with its role as Supervisor.
(b) By RRG. 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 RRG of its obligations
hereunder, or the failure of RRG 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 RRG and, subject to Section 14 herein, RRG shall defend such
claim at its expense and under its control. RRG 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, RRG shall not be required to pay any settlement amount that
it has not approved in advance. Notwithstanding the above, none of Xxx Xxxxxx,
the Trusts, or 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 13 shall survive the
termination of this Agreement for any cause whatsoever.
14. Limitation of Damages. (a) Neither Xxx Xxxxxx nor RRG shall have any
liability to the other or to any other party for lost profits or indirect,
punitive, special or consequential damages (including lost profits) arising out
of this Agreement, even if advised of the possibility of such damages.
(b) Xxx Xxxxxx shall include the statement contained in Exhibit B hereto in
any filing with a governmental agency, and each prospectus and registration
statement (and upon request shall furnish copies thereof to RRG), and Xxx Xxxxxx
expressly agrees to be bound by the terms of the statement contained in Exhibit
B hereto (which terms are expressly incorporated herein by reference and made a
part hereof). Any changes in the statement contained in Exhibit B hereto must be
approved in advance in writing by an authorized officer of RRG.
(c) Notwithstanding anything herein to the contrary, neither RRG nor Xxx
Xxxxxx shall bear responsibility or liability for any losses arising out of any
delay in or interruptions of performance of their respective obligations under
this Agreement due to any act of God, act of governmental authority, or act of
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, other work stoppage, or slow-down), severe or adverse
weather conditions, power failure, communications line or other technological
failure, or other similar cause beyond the reasonable control of the party so
affected.
(d) This Section 14 shall survive any termination of this Agreement.
15. Warranties. 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
execution and delivery of this Agreement and its performance hereunder will not
violate any agreement applicable to it or violate any applicable law or
regulation. Xxx Xxxxxx further represents and warrants to RRG that the issuance,
marketing, promotion, sale and resale of the Trusts by Xxx Xxxxxx will not
violate any agreement applicable to Xxx Xxxxxx or violate any applicable laws,
rules or regulations, including without limitation, securities, commodities and
banking laws.
16. 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 laws 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.
17. Waiver of Breach. The failure of any party to require the performance of
any term of this Agreement or the waiver of any party of any breach hereunder
shall not prevent a subsequent enforcement of such term nor be deemed a waiver
of any subsequent breach.
18. Scope of Agreement. This document constitutes the entire Agreement of the
parties with respect to the subject matter hereof, supersedes all prior oral or
written agreements, and can be amended only by a writing executed by all of the
parties.
19. Survival. Sections 5, 9, 10, 11, 13, 14 and 16 shall survive the
expiration or termination of this Agreement.
20. 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 RRG:
Riedel Research Group, Inc.
000 Xxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Fax: 000-000-0000
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to:
Xxx Xxxxxx Investments 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.
21. 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.
22. Conflicts. In the event that any provision in this Agreement conflicts in
any way with the trust agreement governing a particular Trust, the provisions of
the trust agreement in respect thereof shall control.
23. 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 ____________________
XXXXXX RESEARCH GROUP, INC.
By
Name ____________________
Title ____________________
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EXHIBIT A
The Portfolio seeks to achieve its objective by investing in a list of stocks
from Emerging Markets around the world including Latin America, Asia and
emerging Europe. The Portfolio is selected by the Sponsor from a list provided
by Xxxxxx Research Group ("RRG") (the "Portfolio Consultant"). Analysts at RRG
select the list of stocks with a view towards maximizing investment exposure to
Emerging Markets around the world. Stocks are selected for the exposure they
provide to growing consumer spending in Emerging Markets. Company-specific
analysis focuses on profitability, growth, liquidity and financial strength.
Consideration of political and economic factors contributes to stock selection
and portfolio construction. A committee of advisors analyzes the selections and
makes final decisions about the Portfolio. The Portfolio reflects the stocks
that in the Portfolio Consultant's opinion are best positioned for
outperformance relative to their peers and the market as a whole.
The Portfolio is diversified across a variety of countries around the world.
It is not focused on a particular sector but will find opportunities to invest
in the growing strength of the consumer in these markets in any sector. The
Portfolio seeks to exceed the total return (capital appreciation plus dividends
paid) generated by the MSCI Emerging Markets index during the life of the
Portfolio.
EXHIBIT B
Xxxxxx Research Group, Inc. ("RRG") is not an affiliate of the Sponsor. RRG
may use the list of Securities in its independent capacity as an investment
adviser and distributes this information in whole or in part to various
individuals and entities. RRG may recommend or effect transactions in the
Securities. This may have an adverse effect on the prices of the Securities.
This also may have an impact on the price the [Trust product(s)] pays for the
Securities and the price received upon Unit redemptions or [Trust product(s)]
termination. RRG may act as agent or principal in connection with the purchase
and sale of equity securities, including the Securities, and may act as a market
maker in the Securities. RRG also issues reports and makes recommendations on
the Securities. RRG's research department may receive compensation based on
commissions generated by research and/or sales of Units.
Neither RRG nor the Sponsor manage the [Trust product(s)]. You should note
that RRG applied the selection criteria to the Securities for inclusion in the
[Trust product(s)] prior to the Initial Date of Deposit. After this time, the
Securities may no longer meet the selection criteria. Should a Security no
longer meet the selection criteria, we will generally not remove the Security
from the [Trust product(s)]. In offering the Units to the public, neither the
Sponsor nor any broker-dealers are recommending any of the individual Securities
but rather the entire pool of Securities in the [Trust product(s)], taken as a
whole, which are represented by the Units.
