FORM OF PORTFOLIO SUPPORT AND LICENSE AGREEMENT
This Agreement, dated as of ______ 2010 is made by and between Ativo
Capital Management, LLC an Illinois corporation ("Consultant/Licensor"), and
Millington Securities, Inc. ("Licensee") as sponsor to, the Millington Unit
Investment Trusts, Series 3 (the "Trust").
RECITALS
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A. Consultant/Licensor is an investment adviser federally registered or
exempt under the Investment Advisers Act of 1940, as amended.
B. Licensee sponsors, underwrites and distributes a wide array of unit
investment trusts ("UITs").
C. Consultant/Licensor has developed an investment strategy (which
includes without limitation selection criteria and methodology) set forth in
Schedule A (the "Strategy"), and Consultant/Licensor owns rights in and to the
Strategy and the proprietary data relating to the Strategy (such rights,
including without limitation, copyright, trademark or proprietary rights and
trade secrets, being hereinafter collectively referred to as the "Intellectual
Property").
D. The parties desire to enter into an agreement whereby
Consultant/Licensor shall provide to Licensee a list of securities selected in
accordance with the Strategy (any securities selected in accordance with the
Strategy are referred to herein as "Appropriate Securities") for deposit by
Licensee, in its discretion, into the Trust.
E. Consultant/Licensor uses in commerce and has trade name, trademark
and/or service xxxx rights to the marks set forth in Schedule B (such rights are
individually and collectively referred to herein as the "Marks").
F. Licensee wishes to use the Strategy, Intellectual Property and the
Marks in connection with the Trust.
The parties agree as follows:
1. Consultant/Licensor Services.
(a) Selection of Securities. Prior to 12:00 p.m. (C.S.T.) on the
business day before the day of deposit (such prior day being the "Target Date"),
Consultant/Licensor shall provide Licensee with a list of Appropriate Securities
for deposit by Licensee, in its sole discretion, into the Trust. Licensee shall
specify the Target Date no less than five business days in advance of the Target
Date. If Consultant/Licensor fails to provide Licensee with a list of
Appropriate Securities prior to 12:00 p.m. on the Target Date: (i)
Consultant/Licensor shall be liable (and shall promptly pay) for any costs and
expenses incurred by Licensee and the Trust resulting from such delay and (ii)
the Portfolio Fee and the License Fee set forth in Section 4, below, shall each
be reduced by one (1) basis point for each 24-hour period of delay following
12:00 p.m. on the Target Date. The date that the Appropriate Securities are
deposited is referred to herein as the
"Deposit Date". Licensee shall provide to Consultant/Licensor the registration
statement relating to the Trust (the "Registration Statement").
Consultant/Licensor hereby covenants, represents and warrants that, as of the
Trust's Deposit Date, the list of Appropriate Securities furnished pursuant to
this Agreement shall be appropriate for inclusion in the Trust based on the
investment objectives and criteria set forth in the Trust's Registration
Statement. Consultant/Licensor further covenants, represents and warrants that:
(i) as of the Trust's Deposit Date, the Appropriate Securities and any
consultation it provides with respect to the Trust will be consistent, and not
conflict, with that provided to other Consultant/Licensor clients with similar
investment objectives and strategies and a substantially similar investment
program.
(b) Consultation. Consultant/Licensor shall:
(i) upon Licensee's reasonable request, provide Licensee
with information about the Appropriate Securities as reasonably
necessary for use by Licensee in preparing and updating Registration
Statement disclosures and marketing materials for the Trust; and
(ii) promptly review for accuracy and completeness
information provided and disclosures made in the Registration
Statement for the Trust in which the Appropriate Securities are
deposited.
(c) Standard of Performance. Consultant/Licensor represents and
warrants that: (i) the services will be performed with that degree of skill and
care generally observed by companies performing the same or similar services,
and (ii) the services will be provided in compliance with all applicable
statutes, acts, ordinances, laws, rules, regulations, codes and standards.
(d) Non-disclosure. Neither Consultant/Licensor nor any if its
officers, directors, employees, members or agents shall disclose in any manner
any information concerning the Trust, including any Appropriate Securities,
prior to the Trust's Deposit Date.
2. Grant of License.
(a) Grant. Subject to the terms and conditions of this Agreement,
Consultant/Licensor hereby grants to the Licensee a non-transferable (except as
otherwise provided herein), license to use and refer to the Consultant/Licensor
Marks, Strategy and Intellectual Property (i) in connection with the creation,
issuance, sale, marketing and promotion of the Trust in order to indicate (x)
that the securities included in the Trust are determined through the use of the
Strategy, (y) the historical performance of the Strategy, and (z) that
Consultant/Licensor is the source of the Strategy; (ii) as may otherwise be
required by applicable laws, rules or regulations and court orders or under this
Agreement; and (iii) in the name of the Trust (collectively, the "License").
(b) Scope. Consultant/Licensor agrees that no person or entity
(including without limitation, the Trust) other than the Licensee shall need to
obtain a License in connection with the creation, issuance, sale, marketing and
promotion of the Trust and that Licensee has the right to sublicense the License
to the Trust or other appropriate party if necessary or helpful in achieving the
intent of this Agreement. Consultant/Licensor shall be entitled to review and
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approve all narrative and the uses of Intellectual Property in advance of use.
However, if the Consultant/Licensor does not respond to the request for approval
of any narrative and use of Intellectual Property within 5 (five) business days
of receiving a request from the Licensee the request will be deemed approved. At
no time shall approval be unreasonably withheld.
(c) Ownership and Retention of Rights. The Licensee acknowledges that
the Strategy and the Consultant/Licensor Marks are the exclusive property of
Consultant/Licensor and that Consultant/Licensor has and retains all
Intellectual Property rights therein. Except as otherwise specifically provided
herein, Consultant/Licensor reserves all rights to the Strategy and the
Consultant/Licensor Marks, and this Agreement shall not be construed to transfer
to the Licensee any ownership right to, or equity interest in, any of the
Strategy or the Consultant/Licensor Marks, or in any Intellectual Property or
other proprietary rights pertaining thereto.
(d) Duty to Maintain. During the term of this Agreement,
Consultant/Licensor shall use its best efforts to maintain in full force and
effect U.S. federal registrations for the Consultant/Licensor Marks.
3. Term. The term of this Agreement shall commence as of the date set
forth above and shall remain in full force and effect until the termination of
the Trust.
4. Fees. As consideration for the services and license granted herein,
Licensee shall pay to Consultant/ Licensor the following fees (which fees are
Trust costs that Licensee expects the Trust to reimburse pursuant to the
applicable Trust Indenture):
(a) a portfolio consulting fee equal to __________ basis
points (.__%) of the aggregate daily liquidation value all sales, net
of liquidations, made during the primary offering period of the Trust
(the "Portfolio Fee"); and
(b) a license fee equal to _________ basis points (.__%) of
the aggregate daily liquidation value of all sales made during the
primary offering period of the Trust (the "License Fee").
The Portfolio Fee and License Fee shall be paid on a one-time basis on or before
the 15th day of the second month after the close of the primary offering period.
Consultant/Licensor acknowledges that (a) Licensee may at any time determine
that it does not wish to go forward with a primary offering of the Trust and, if
it so determines, Licensee shall not be responsible for the payment of any
Portfolio Fee or License Fee under this Agreement, (b) Licensee may delay the
Deposit Date in its discretion, and (c) Licensee has full authority to determine
the length of any offering period, and may shorten or lengthen such offering
period for any reason in its sole discretion.
5. Relationship of the Parties. This Agreement shall not be deemed to
create any partnership or joint venture between Licensee and
Consultant/Licensor, and the services provided by Consultant/Licensor shall be
as an independent contractor and not as an
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employee or agent of Licensee. Consultant/Licensor shall have no authority
whatsoever to bind Licensee on any agreement or obligation. Consultant/Licensor
agrees that it shall not hold itself out as an employee or agent of Licensee.
Licensee shall have no authority whatsoever to bind Consultant/Licensor on any
agreement or obligation. Licensee agrees that it shall not hold itself out as an
employee or agent of Consultant/Licensor.
6. Confidentiality. A party may obtain proprietary, non-public
information concerning the other party ("Confidential Information") during the
term of this Agreement. Each party shall keep the other party's Confidential
Information confidential and shall not use such information in any manner except
as required to perform its obligations hereunder. In no event shall the
following information be deemed a disclosing party's Confidential Information:
(a) information that is or becomes generally available to the public other than
as a result of disclosure by the receiving party; (b) information that was
within the receiving party's possession prior to its being furnished by the
disclosing party; (c) information that becomes available to the receiving party
from a third party who is not, to the receiving party's knowledge, bound by an
obligation of confidentiality to the disclosing party and (d) information that
is independently developed by the receiving party without the receiving party
violating its obligations under this agreement. Notwithstanding the above, a
receiving party may disclose the disclosing party's confidential Information to
the receiving party's existing and potential affiliates and its and their
respective employees, agents, advisors, directors and officers (collectively,
"Representatives"), provided, however, such Representatives are made aware of
this Agreement and agree to comply with the terms of this Agreement as if they
were parties hereto. Any misuse or disclosure by a party's Representative not
permitted by this Agreement shall be deemed a breach of this Agreement by such
party. Each party acknowledges that a breach of this Section would cause
permanent and irreparable damage for which money damages would be an inadequate
remedy. Therefore, each party shall be entitled to seek equitable relief in the
event of any breach of the provisions of this Section in addition to all other
remedies available at law or in equity.
7. Indemnification. Each party shall defend, indemnify and hold
harmless the other party from any and all liabilities, losses, damages, costs
and expenses (including reasonable attorneys' fees) which the other party
suffers by reason of any claims, demands, actions, or suits brought by a third
party (including regulatory agencies) arising from the other party's (a) failure
to comply with this Agreement or (b) breach of a representation or warranty
contained in this Agreement.
8. Limitation of Liability. Neither party shall be liable to the other
party for any liabilities, damages, costs and expenses except for those
resulting from the other party's breach of a representation or warranty
contained in this Agreement, gross negligence or willful misfeasance.
Notwithstanding the above, in no event shall either party be liable to the other
party for any punitive, special, indirect, consequential, incidental or similar
damages or losses, regardless of how such damages or losses arise. Nothing in
this paragraph is intended to limit a party's right to indemnification under
Section 7.
9. Representations and Warranties.
(a) Licensee. Licensee represents, warrants and covenants that it is a
corporation duly organized, existing and in good standing under the laws of the
State of Illinois, with full right, power and authority to enter into and
perform this Agreement, and the execution and
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performance of this Agreement does not conflict with or violate any agreement to
which it is a party, any court order to which it is subject, or its Articles of
Incorporation or Bylaws. Licensee further represents, warrants and covenants
that it is registered as a broker/dealer in good standing with the Financial
Industry Regulatory Authority.
(b) Consultant/Licensor. Consultant/Licensor represents, warrants and
covenants that it is a limited liability company duly formed, existing and in
good standing under the laws of the State of Illinois, with full right, power
and authority to enter into and perform this Agreement, and the execution and
performance of this Agreement does not conflict with or violate any agreement to
which it is a party, any court order to which it is subject, or any of its
organizational documents. Consultant/Licensor further represents, warrants and
covenants that (i) it is an investment adviser federally registered or exempt
from registration under the Investment Advisers Act of 1940, as amended, and any
applicable state statutes, (iii) the Strategy, Intellectual Property and
Consultant/Licensor Marks are the exclusive property of Consultant/Licensor and
(iv) neither the selection of Appropriate Securities pursuant to the Strategy
nor the Intellectual Property or the License granted pursuant to this Agreement
infringes or otherwise violates any third-party's intellectual property rights
or other proprietary rights.
10. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Illinois without giving
effect to any conflict of laws principles.
(b) Arbitration. Except as to any matter as to which the parties may
seek equitable relief, THE PARTIES HEREBY WAIVE THEIR RIGHT TO SEEK REMEDIES IN
ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY, INCLUDING ANY RIGHT TO A JURY
TRIAL. IN THE EVENT OF ANY DISPUTE ARISING BETWEEN OR AMONG ANY OF THE PARTIES
OR ANY OF THEIR AFFILIATES OR THIRD PARTY BENEFICIARIES HEREOF, ARISING OUT OF,
RELATING TO OR IN CONNECTION WITH THIS AGREEMENT, SUCH DISPUTE SHALL BE RESOLVED
EXCLUSIVELY BY ARBITRATION IN XXXX COUNTY, ILLINOIS IN ACCORDANCE WITH THE RULES
OF JAMS/ENDISPUTE ("JAMS"), DISPUTES SHALL NOT BE RESOLVED IN ANY OTHER FORUM OR
VENUE. A RETIRED JUDGE WHO IS EXPERIENCED IN RESOLVING DISPUTES REGARDING THE
SECURITIES BUSINESS SHALL CONDUCT SUCH ARBITRATION. THE SCOPE OF DISCOVERY SHALL
BE AGREED TO BY THE PARTIES. ANY ARBITRATION AWARD SHALL NOT INCLUDE FACTUAL
FINDINGS OR CONCLUSIONS OF LAW. NO PUNITIVE DAMAGES SHALL BE AWARDED. ANY AWARD
RENDERED BY THE ARBITRATOR SHALL BE FINAL AND BINDING, AND JUDGMENT MAY BE
ENTERED UPON IT IN ANY COURT OF COMPETENT JURISDICTION AT THE TIME SUCH AWARD IS
RENDERED OR AS OTHERWISE PROVIDED BY LAW.
(c) Entire Agreement. This Agreement, including the Appendices and
Schedules hereto, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior oral or written
agreements relating to the subject matter hereof.
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(d) Assignment. Consultant/Licensor shall not assign any rights or
delegate any obligations under this Agreement without the prior written consent
of Licensee, which consent shall not be unreasonably withheld. Any assignment in
violation of this provision shall be void. Licensee may assign its rights and
obligations under this Agreement to any successor in interest to all or
substantially all of Licensee's assets. This Agreement shall be binding upon the
heirs, successors, legal representatives and permitted assigns of the parties.
(e) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(f) Survival. The provisions of Sections 6, 7, 8, 10(a), 10(b), and
10(f) shall survive the termination of this Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
ATIVO CAPITAL MANAGEMENT LLC
By
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Xxxxxxx Xxxxx
Chief Investment Officer
MILLINGTON SECURITIES, INC. ,
AS SPONSOR OF THE TRUST
By
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Xxxxxxx X Xxxxxxxxxx
Chief Executive Officer
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SCHEDULE A
THE STRATEGY
PRINCIPAL INVESTMENT STRATEGY
SCHEDULE B
CONSULTANT/LICENSOR MARKS
(LOGO)
ATIVO
RESEARCH
(LOGO)
ATIVO
CAPITAL CHOOSE WISELY(TM)
Quantitative Process Investing(TM)
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