LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement"), is made and entered into as
of this last day of May, 2002 (the "Effective Date"), by and between Value Line
Publishing, Inc., located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
("VLPI"), and First Trust Advisors L.P., 0000 Xxxxxxxxxxx Xxxx, Xxxxx, XX 00000
("FTA").
RECITALS
WHEREAS, VLPI is a publisher of financial and business information and
compiles, calculates, and owns all rights in its propriety ranking systems,
including the "Value Line Timeliness Ranking System" (the "System");
WHEREAS, VLPI uses in commerce and owns the registered trade or service
names or marks listed in Exhibit A (collectively, the "Marks");
WHEREAS, FTA wishes to use the (i) System in conjunction with the
products described in Exhibit B (the "Products") and (ii) Marks for marketing
the Products; and
WHEREAS, VLPI is willing to license the System and Marks to FTA
pursuant to the terms and conditions of this Agreement.
THEREFORE, the parties agree as follows:
DEFINITIONS
All capitalized or abbreviated terms in this Agreement, including the
first paragraph hereof and the Recitals, shall have their specified respective
meanings. All definitions shall apply both to their singular and plural forms,
as the context may require.
SECTION 1. LICENSE RIGHTS. (a) Subject to the terms and conditions of
this Agreement, VLPI grants to FTA a non-exclusive and non-transferable (except
as provided herein) license during the term (as defined in Section 10(a)), (i)
to use the System solely for its own internal purposes "as is" without modifying
the System and not in conjunction with any other product or service; and (ii) to
promote and market (collectively "Market(ing)") the System and Marks only to
actual or potential U.S. purchasers of investment units in the Product (the
"Clients"). FTA's licenses hereunder only extend to the United States and the
Clients. FTA shall not use or Market the System or Marks, other than as
expressly set forth herein, and FTA may not Market the System or Marks over the
Internet or by other electronic means, without VLPI's prior written consent.
(b) FTA agrees to be bound by, and shall include the following
italicized paragraph in quotes and the italicized paragraph in quotes in Section
1(c) in any and all materials which FTA uses in connection with the Product,
including without limitation, all prospectuses, plans, registration statements,
documents required to be filed with governmental or regulatory agencies,
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advertisements, brochures, and any other publication, informational or other
items that in any way use or refer to VLPI, the Product, the System, or any Xxxx
(collectively, the "Informational Materials"). All Informational Materials must
be approved in advance in writing by VLPI prior to their dissemination. All
Informational Materials must be in printed form and may not be reproduced or
disseminated over the Internet or by electronic means, without VLPI's prior
written consent.
"Value Line Publishing, Inc.'s ("VLPI") only relationship to First
Trust Advisors L.P. is VLPI's licensing to First Trust Advisors L.P. of certain
VLPI trademarks and trade names and the Value Line Timeliness Ranking System
(the "System"), which is composed by VLPI without regard to First Trust Advisors
L.P., this Product or any investor. VLPI has no obligation to take the needs of
First Trust Advisors L.P. or any investor in the Product into consideration in
composing the System. The Product results may differ from the hypothetical or
published results of the Value Line Timeliness Ranking System. VLPI is not
responsible for and has not participated in the determination of the prices and
composition of the Product or the timing of the issuance for sale of the Product
or in the calculation of the equations by which the Product is to be converted
into cash. VLPI MAKES NO WARRANTY CONCERNING THE SYSTEM, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES ARISING FROM USAGE OF
TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE, AND VLPI MAKES NO WARRANTY AS
TO THE POTENTIAL PROFITS OR ANY OTHER BENEFITS THAT MAY BE ACHIEVED BY USING THE
SYSTEM OR ANY INFORMATION OR MATERIALS GENERATED THEREFROM. VLPI DOES NOT
WARRANT THAT THE SYSTEM WILL MEET ANY REQUIREMENTS OR THAT IT WILL BE ACCURATE
OR ERROR-FREE. VLPI ALSO DOES NOT GUARANTEE ANY USES, INFORMATION, DATA OR OTHER
RESULTS GENERATED FROM THE SYSTEM. VLPI HAS NO OBLIGATION OR LIABILITY (I) IN
CONNECTION WITH THE ADMINISTRATION, MARKETING OR TRADING OF THE PRODUCT; OR (II)
FOR ANY LOSS, DAMAGE, COST OR EXPENSE SUFFERED OR INCURRED BY ANY INVESTOR OR
OTHER PERSON OR ENTITY IN CONNECTION WITH THIS PRODUCT, AND IN NO EVENT SHALL
VLPI BE LIABLE FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, PUNITIVE,
INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES IN CONNECTION WITH PRODUCT."
(c) In addition to the foregoing, FTA must always use the following
notice on any Informational Material or any other print, electronic, digital
communication or voice recording when referring to VLPI, the Product, any Xxxx
or the System:
"VALUE LINE, THE VALUE LINE INVESTMENT SURVEY OR [OTHER APPLICABLE XXXX] ARE
REGISTERED TRADEMARKS OF VALUE LINE, INC. OR VALUE LINE PUBLISHING, INC. THAT
ARE LICENSED TO FIRST TRUST ADVISORS L.P. THIS PRODUCT IS NOT SPONSORED,
RECOMMENDED, SOLD OR PROMOTED BY VALUE LINE PUBLISHING, INC., VALUE LINE,
INC. OR VALUE LINE SECURITIES, INC. FIRST TRUST ADVISORS L.P. IS NOT
AFFILIATED WITH ANY VALUE LINE COMPANY."
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VLPI's consent shall be deemed given for any written advertising
material which has been approved in writing in advance by VLPI's Legal
Department and which is then to be reproduced verbatim and in full in FTA's
website.
(d) If the System is delivered on or in conjunction with software and
related documentation (the "Documentation"), then the license given to FTA under
Section 1(a) (i) applies to such documentation and solely to the object code of
such software. Any and all software, modifications, enhancements, corrections or
changes thereto, and all copies of any of the foregoing in any form whatsoever
collectively constitute the "Software". VLPI authorizes FTA to make only such
copies of the Software as are necessary for FTA's performance of this Agreement.
(e) Nothing in this Agreement, expressed or implied, shall be deemed to
limit VLPI's rights to Market--or otherwise make available or use for any
purpose, which VLPI in its sole discretion deems appropriate, whether directly
or through other parties within the United States or elsewhere--the System,
Marks, Software or any product, service or information related thereto or
derived therefrom.
(f) FTA shall use its best efforts to protect the goodwill and
reputation of VLPI in connection with its use of the System and Marks under this
Agreement, but nothing herein shall be deemed to require FTA to initiate a
proceeding against any third party to enforce VLPI's goodwill. FTA shall submit
to VLPI for its review and prior approval all Informational Materials before
FTA's use thereof. VLPI shall notify FTA whether it approves the Informational
Materials within thirty (30) days following receipt thereof from FTA. Any
disapproval shall state VLPI's reasons therefor. If VLPI does not grant its
written approval within such thirty (30) day period, FTA may not use the
Informational Materials. Once Informational Material has been approved by VLPI,
subsequent Informational Materials which describe and use the System or Marks in
the same language as had been previously approved by VLPI need not be
resubmitted for approval.
(g) FTA may sub-license the rights granted to it hereunder to the
entities listed in Exhibit D hereto. However, FTA shall assume all
responsibility for and will hold harmless and indemnify VLPI against any action
by a sub-licensee as if such action or inaction were that of FTA. In order to
sub-license to any entity, FTA must obtain an agreement with the sub-licensee
which contains the provisions set forth in Exhibit E.
SECTION 2. PAYMENTS, RECORDS AND AUDIT. (a) FTA shall pay VLPI a
license fee (the "Fee"), equal to two and one-half (2.5) basis points of the
average gross total daily assets invested in the Product during each Calendar
Quarter, which payments shall be made by FTA within thirty (30) days after the
end of such Calendar Quarter. A "Calendar Quarter" is the three (3) month period
ending on each of March 31, June 30, September 30, or December 31 of each year.
(b) However, if the Effective Date is a date other than the first day
of a Calendar Quarter, the amount payable to VLPI with respect to the period
beginning on the Effective Date and ending on the last day of that one Calendar
Quarter in which the Effective Date falls (the "Stub Period") shall equal the
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Fee amount multiplied by a fraction, the numerator of which is the number of
days in the Stub Period and the denominator of which is the number of days in
that Calendar Quarter (the "Prorated Payment").
For example: Assume a Fee of $30,000 for the Calendar Quarter ending
March 31 and Effective Date of January 15; then the Prorated Payment is $30,000
X 75/90 = $25,000.
(c) If this Agreement is terminated or expires for any reason on any
day other than the last day of a Calendar Quarter, the Fee payable to VLPI with
respect to that final period shall be similarly prorated as provided in
Subsection 2(b) above.
(d) (i) within ninety (90) days after the end of each calendar year,
FTA shall provide VLPI with a written confirmation of the average gross total
daily assets invested in the Products in such year (the "Receipt Information").
(ii) FTA shall keep and maintain -- throughout the Term and for seven
(7) years after the expiration, non-renewal or termination of the Agreement for
any reason -- accurate and comprehensive hard-copy or electronically retrievable
and reproducible records of all its business activities relating to the System
and the Product (including the Receipt Information and all reports and records
generated or received by FTA in connection therewith) and make them available to
VLPI, at VLPI's expense, or its representatives for audit and copying within two
(2) business days after FTA's receipt of VLPI's written request therefor. Audits
shall take place during normal business hours at the offices of FTA and may be
requested by VLPI at any time during the Term and for a period of one (1) year
after the expiration or termination of this Agreement for any reason. FTA shall
fully cooperate with VLPI's audit.
(iii) If the audit reveals an underpayment in FTA's payment obligations
to VLPI, FTA shall immediately pay VLPI such unpaid amount plus interest on the
underpaid amount at the rate of one and one-half percent (1.5%) per month, or
the highest interest rate permitted by applicable law, if lower, accruing daily
as of the date payment thereof was due to VLPI until actual payment is received
by VLPI. In addition, if the underpaid amount exceeds three percent (3%) of
FTA's actual payment, FTA shall, within thirty (30) days of VLPI's invoice to
FTA, reimburse VLPI for all its audit costs with respect to such audit. VLPI
shall keep the audit materials confidential and use them only for the purpose
contemplated in, and to enforce its rights under, this Agreement.
SECTION 3. VLPI OBLIGATIONS. (a) VLPI shall provide FTA with the
System upon the execution of this Agreement, and thereafter with the updates to
the System as VLPI makes them generally commercially available to its general
circulation subscribers.
(b) If it is the policy of VLPI to prohibit its employees who are
directly responsible for changes in the components of the System from purchasing
or beneficially owning any interest in the Product, FTA shall have no
responsibility for ensuring that such VLPI employees comply with such VLPI
policy and shall have no duty to inquire whether any purchasers or sellers of
the Product are such VLPI employees. VLPI shall have no liability to FTA with
respect to VLPI's or any of its affiliates' employees' adherence or failure to
adhere to such policy.
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(c) VLPI shall promptly correct any errors in the System which are
brought to VLPI's attention by FTA, provided that nothing in this Agreement
shall be deemed to give FTA the right to exercise any judgment or require any
changes with respect to VLPI's method of composing, calculating or determining
the System.
SECTION 4. VLPI'S REPRESENTATIONS AND WARRANTIES. (a) VLPI represents
and warrants that for a period of ninety (90) days after the Effective Date: (i)
the Software, if provided hereunder, shall not, under normal use, deviate
materially from the specifications contained in its documentation, and (ii) the
disk on which the Software is recorded (the "Disk") shall be free from defects
in materials and workmanship. If any deviation or defect not due to FTA's
negligence appears, FTA may return the Disk to VLPI during the 90-day warranty
period for repair or, at VLPI's sole discretion, replacement without charge.
This warranty does not cover deviations or defects arising from any use of the
Disk that is inconsistent with its intended purpose. FTA assumes the entire cost
of all necessary servicing, repair or correction of defects after the 90-day
warranty period.
(b) VLPI also represents and warrants that it has the right and
authority to enter into this Agreement and license the System and Marks to FTA
as contemplated herein and that the licensing of the System and Marks to FTA
will not breach any contract to which VLPI is a party or constitute an
infringement of the intellectual property rights of any other person.
(c) (i) EXCEPT AS OTHERWISE PROVIDED IN SECTIONS 4(a) AND 4(b), NEITHER
VLPI NOR ANY PROVIDER (AS DEFINED IN SUBSECTION (ii) BELOW) MAKES ANY WARRANTY,
EXPRESS OR IMPLIED, CONCERNING THE SYSTEM, SOFTWARE OR MARKS OR ANY PART
THEREOF, ANY INFORMATION OR USE DERIVED THEREFROM, OR OTHERWISE IN CONNECTION
WITH THIS AGREEMENT. VLPI SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTIES
ARISING FROM USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE RELATING
TO THE SYSTEM, SOFTWARE OR MARKS OR OTHERWISE IN CONNECTION WITH THIS AGREEMENT.
(ii) FTA ACKNOWLEDGES THAT THE SYSTEM WILL BE BASED UPON DATA, FACTS AND
INFORMATION PROVIDED TO VLPI BY THIRD PARTIES (THE "PROVIDERS") AND THAT,
ALTHOUGH VLPI BELIEVES SUCH INFORMATION TO BE CORRECT, VLPI DOES NOT WARRANT
THAT THE SYSTEM OR SOFTWARE WILL MEET FTA'S OR ANY CLIENT'S REQUIREMENTS OR THAT
IT WILL BE ACCURATE OR ERROR-FREE. VLPI DOES NOT GUARANTEE ANY INFORMATION, DATA
OR OTHER RESULTS GENERATED FROM THE SYSTEM OR SOFTWARE, OR THAT USE THEREOF WILL
AFFECT OR IMPROVE INVESTMENT PERFORMANCE. VLPI MAKES NO REPRESENTATION OR
WARRANTY AS TO THE POTENTIAL INVESTMENT PROFITS OR ANY OTHER BENEFITS THAT MAY
BE ACHIEVED BY USING THE SYSTEM OR SOFTWARE.
(d) FTA ACKNOWLEDGES THAT: (i) THE SYSTEM LICENSED TO FTA HEREUNDER
MIRRORS THE INFORMATION PROVIDED TO VLPI'S GENERAL CIRCULATION SUBSCRIBERS AND
WILL BE PROVIDED TO FTA WITH THE SAME FREQUENCY AS IT IS PROVIDED TO VLPI'S
GENERAL CIRCULATION SUBSCRIBERS; (ii) VLPI IS NOT IN CONNECTION WITH THIS
AGREEMENT OR ANY PRODUCT RECOMMENDING INVESTMENTS TO FTA CLIENTS OR DIRECTLY OR
INDIRECTLY ACTING IN AN INVESTMENT ADVISORY CAPACITY; (III) INVESTMENT
ACTIVITIES AFFECTING THE CLIENT WILL NOT BE ADMINISTERED, INFLUENCED OR
Page 5
OTHERWISE CAUSED, IN WHOLE OR IN PART BY VLPI; AND (iv) ALL INVESTMENT DECISIONS
WITH RESPECT TO CLIENT, ACCOUNTS WILL BE EXERCISED SOLELY BY FTA AND CLIENT, AND
VLPI HAS NEITHER THE ABILITY NOR AUTHORITY TO MAKE SUCH DECISIONS.
(e) VLPI SHALL HAVE NO LIABILITY TO FTA, ANY CLIENT OR OTHER THIRD
PARTY FOR DAMAGES RESULTING OR ALLEGED TO HAVE RESULTED FROM ANY ERROR OR
OMISSION IN THE SYSTEM OR SOFTWARE OR ANY ACTION TAKEN OR NOT TAKEN BASED
THEREON, OR INFORMATION DERIVED THEREFROM; AND IN NO EVENT SHALL VLPI OR ANY
PROVIDER BE LIABLE TO FTA, OR ANY CLIENT OR ANY THIRD PARTY FOR ANY LOST
PROFITS, LOSS OF BUSINESS, LOST SAVINGS OR OTHER CONSEQUENTIAL, SPECIAL,
PUNITIVE, INCIDENTAL, INDIRECT OR EXEMPLARY DAMAGES, EVEN IF IT HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
(f) In the event that the System, Software or any Xxxx becomes the
subject of any infringement claim, VLPI, in its sole discretion, may obtain for
FTA the right to continue using the System, Software or Xxxx or may cause it to
be modified to resolve such claim or suit. If VLPI does not deem either one of
these alternatives reasonably available to it, VLPI may require FTA in writing
to stop taking in new investments in the Product; and VLPI shall not be required
to compensate or otherwise have any other liability to FTA as a result thereof;
except that, VLPI shall indemnify FTA from any damages awarded against FTA in a
nonappealable final judgment as a result of FTA's use of any System, Software or
Xxxx determined to be infringing by a court of competent jurisdiction, provided
that the System or Xxxx found to be infringing has not in any way been modified
or changed by FTA or any third party prior to the finding of such infringement
and that VLPI has approved FTA's litigation counsel in advance. The foregoing is
the sole obligation of VLPI and FTA's sole remedy, in lieu of all others, in the
event of any such infringement claim or suit.
(g) EXCEPT AS PROVIDED UNDER SECTIONS 4(b) AND 4(f), VLPI'S LIABILITY
FOR ANY REASON UNDER THIS AGREEMENT OR IN CONNECTION WITH THE SYSTEM OR SOFTWARE
SHALL NOT EXCEED THE AMOUNT FTA ACTUALLY PAID TO VLPI UNDER THIS AGREEMENT FOR
THE CONSECUTIVE TWELVE (12) MONTH PERIOD IMMEDIATELY PRECEDING THE DATE GIVING
RISE TO SUCH LIABILITY.
(h) FTA ACKNOWLEDGES THAT VLPI'S LIABILITY AND WARRANTY LIMITATIONS SET
FORTH IN THIS SECTION 4 ARE REASONABLE UNDER THE CIRCUMSTANCES AND THAT FTA'S
CONSENT THERETO IS FAIRLY REFLECTED IN THE FEE AND CONSTITUTES A MATERIAL
INDUCEMENT FOR VLPI'S ENTRY INTO THIS AGREEMENT.
SECTION 5. FTA'S REPRESENTATIONS AND WARRANTIES. (a) FTA represents
and warrants that FTA shall:
(i) use and Market the System and Marks only (1) in
conjunction with the Product; and (2) market the Product only through
use of Informational Materials which have been previously approved by
VLPI pursuant to Section 1(f) and, in any event, contain the language
required by Sections 1(b) and 1(c) and contain no term that, expressly
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or by implication, derogates from, or otherwise is inconsistent with,
any provision in Section 1(b), 1(c) or other terms of this Agreement;
(ii) make no claim, representation or warranty regarding the
performance, adequacy, results or other aspects of the System, or
Product, except as is expressly set forth in this Agreement;
(iii) remain duly registered or licensed as an investment
adviser under the Investment Advisers Act of 1940 (the "Act") and the
laws of each state in which FTA is required to be so registered or
licensed, and otherwise to the extent necessary or appropriate under
all applicable laws and regulations to carry on the activities
contemplated by this Agreement;
(iv) comply in all material respects with the provisions of
the Act, the rules promulgated thereunder, and any other federal and
state securities laws applicable to the implementation of this
Agreement;
(v) ensure that all investment practices of FTA and the
services offered in connection therewith shall not violate any federal
or state laws, rules or regulations or the laws, rules or regulations
of any governmental agency or regulatory or self-regulatory entity
overseeing FTA's business as finally determined by the governmental,
judicial or regulatory entity having lawful jurisdiction; and
(vi) maintain with respect to each Client all records and
forms relating to the Product that FTA is required to maintain under
the Act and shall make such records and forms available to any Client,
as required by applicable laws or regulations, or to VLPI on reasonable
notice during normal business hours.
SECTION 6. PROPRIETARY RIGHTS. (a) FTA acknowledges that (i) the
System and Software and all parts thereof consist of information gathered,
selected, analyzed, arranged, and presented by VLPI through the application of
methods of selection, organization, computation, analysis, and judgment unique
and original to VLPI and at considerable expense to VLPI, and (ii) the actual
value thereof far exceeds VLPI's cost of preparing them.
(b) FTA acknowledges that (i) VLPI owns all rights, title and interest
in and to the System, Software and Marks. Nothing in this Agreement shall be
construed to grant FTA any license or right not expressly authorized by this
Agreement. FTA acknowledges that it shall acquire no interest in the System,
Software, or Marks by reason of this Agreement.
(c) FTA shall not remove and shall fully reproduce and include all
copyright, trademark, and other proprietary rights notices on all copies of the
Systems and Software and all Informational Materials in its possession,
including any partial copy. FTA may not, during or after the Term, for any
purpose, use adopt or attempt to register anywhere in the world--whether alone
or together with any other xxxx, symbol, or name--any trade name or xxxx or
service name or xxxx that is similar or confusingly similar to any Xxxx.
Page 7
(d) FTA shall not (i) modify, translate into a foreign language or
generate or use derivative works from the System, Software or Marks or any part
thereof; (ii) reverse engineer, reverse compile, reverse assemble, or otherwise
attempt to reveal or duplicate for any purpose the methodologies, know how or
trade secrets underlying the System or Software (including the Software's source
code); (iii) resell, license, distribute, assign, or otherwise transfer the
System or any Software or any copy thereof, or any service, data or product
derived therefrom, to any third party for any purpose; (iv) use the System or
Software to create another product or service or otherwise for the benefit of
any third party, except with respect to the Product pursuant to this Agreement;
(vi) do anything which directly or indirectly may encumber or otherwise
interfere with VLPI's proprietary rights in the System, Software or Marks; or
(vii) extract ideas, algorithms, procedures, formulas, workflows, or hierarchies
from the System or Software.
(e) FTA shall cooperate with VLPI, at VLPI's expense, to protect the
System, Software and Marks from infringement by third parties including Clients.
FTA shall promptly notify VLPI of any act, of which it becomes aware, that may
constitute an infringement of any copyright, trademark, trade secret, patent, or
other proprietary right. FTA shall also promptly notify VLPI of any claim,
allegation or notification of which FTA becomes aware that the System, Software,
Marks, Product or the Marketing thereof, infringes upon the intellectual
property rights of any third party or violates any law or regulation of any
kind. FTA agrees to cooperate with VLPI, at VLPI's expense, to obtain, register
and enforce for VLPI's benefit all copyrights, trademarks, patents, and trade
secrets with respect to the System, Software or Marks, including without
limitation, the execution of any requested document.
SECTION 7. CONFIDENTIAL INFORMATION. (a) "Confidential Information"
means the System and Software and all information related thereto, VLPI's or any
of its affiliates' business, financial, marketing product or service information
and any other information which is identified in writing prior to disclosure as
confidential or proprietary to VLPI or any Provider and any copies or versions
thereof. Except as expressly authorized by this Agreement, FTA may not use or
disclose Confidential Information (or allow it to be disclosed) to any third
party. FTA also agrees to: protect the confidentiality of the Confidential
Information at least to the extent FTA protects its own confidential
information; and, in any event and at a minimum, to keep the Confidential
Information in a safe and secure place and monitor and limit access to the
Confidential Information only to those of its personnel who (i) require such
access (the "Recipients") to implement FTA's obligations under this Agreement,
and (ii) who, prior to obtaining such access, execute the attached Exhibit C
acknowledging the proprietary and confidential nature of the Confidential
Information and requiring compliance with this Section 7. Copies of each such
signed Exhibit C form shall be delivered to VLPI within 5 days of signature. FTA
shall promptly notify VLPI of any use of disclosure of Confidential Information,
of which FTA becomes aware, that is not authorized by this Agreement. VLPI
agrees that information which is or becomes part of the public domain with no
fault of FTA shall not be deemed Confidential Information.
(b) Notwithstanding Section 12(e), since FTA's breach of Section 1, 6
or 7(a) may cause VLPI irreparable injury, VLPI, in addition to all other
remedies, shall have the right to seek equitable or injunctive relief as, when
and where it deems fit in the event of an actual or attempted breach of FTA's or
any Recipient's obligations hereunder.
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SECTION 8. ASSIGNMENT. FTA may not assign its rights or delegate its
obligations hereunder without the prior written consent of the Chairman and CEO
of VLPI, which shall also be required in the event of a change of control of
FTA. VLPI may assign its rights under this Agreement to any third party, but may
not delegate its obligations hereunder without the consent of FTA, which consent
shall not unreasonably be withheld or delayed; except that, VLPI may delegate
this Agreement or any of its obligations hereunder to any of its corporate
affiliates such as any of its subsidiaries, sister or parent companies. Any
other attempted or purported assignment or delegation of this Agreement or any
rights or duties hereunder shall be void and of no effect.
SECTION 9. INDEMNIFICATIONS. (a) FTA shall defend, indemnify and hold
harmless VLPI and its affiliates and each of their officers, directors,
shareholders, agents, and employees, from and against any and all claims, suits,
liabilities, judgments, losses, damages, and expenses, including legal fees,
arising out of or relating to: (i) the Product; (ii) FTA's breach of any of its
obligations or warranties in this Agreement or any FTA action that is
inconsistent with any of FTA's acknowledgments or VLPI's disclaimers in this
Agreement; or (iii) the action of any Client.
(b) In addition to VLPI's indemnification obligation under Section
4(g), VLPI also shall defend, indemnify and hold FTA harmless from and against
any and all suits, liabilities, losses, damages and expenses, including legal
fees, arising out of or relating to VLPI's breach of any of its warranties in
Section 4(b).
SECTION 10. TERM AND TERMINATION. (a) This Agreement shall become
effective on the Effective Date and shall continue in effect for a term of one
(1) year (the "Initial Term") and, thereafter, the Agreement will be
automatically renewed for successive one (1) year terms (the "Renewal Terms");
unless either party, in its sole discretion, informs the other of its decision
not to renew the Agreement at least sixty (60) days prior to the expiration of
the applicable Initial Term or any Renewal Term. The Initial Term and all
Renewal Terms collectively constitute the "Term." The Agreement may be
terminated at any time during the Term pursuant to Sections 10(b), (c) or (d)
below.
(b) Either party may terminate this Agreement in its sole discretion
for any reason and at any time during the Term upon ninety (90) days prior
written notice to the other party.
(c) This Agreement also may be terminated by either party in writing
upon thirty (30) days' prior written notice to the other party, if such other
party breaches any term of this Agreement and fails to cure such breach within
that thirty (30) day notice period.
(d) VLPI also may terminate this Agreement effective immediately upon
written notice to FTA upon:
(i) the institution by or against FTA of any insolvency,
receivership or bankruptcy proceedings or upon FTA's dissolution or
ceasing to do business;
Page 9
(ii) breach by FTA of any of its obligations or warranties
under Section 1, 5, 6, 7, 8 or 9;
(iii) any fraudulent conduct or material misrepresentation by
FTA involving the Product; or
(iv) any alleged or instituted administrative action or suit
by the Securities and Exchange Commission, the National Association of
Securities Dealers, Inc., or any other regulatory or administrative,
federal or state agency for FTA's violation of any rule, regulation or
statute; or
(v) change of control of FTA.
(e) On the Effective Date of termination or expiration of this
Agreement for any reason (the "End Date"), FTA shall immediately cease holding
itself out as having a relationship with VLPI of any kind and cease using or
Marketing the System, the Product, or any Xxxx; and return to VLPI all versions
and copies thereof then in its possession. The due date of all payments due to
VLPI under this Agreement for any period through the End Date shall
automatically be accelerated and all such payments shall become immediately due
and payable on the End Date. FTA hereby expressly waives and renounces any claim
to compensation or damages for any permitted termination, non-renewal or
expiration of this Agreement.
(f) Notwithstanding Section 10(e), VLPI shall continue to deliver
System updates to FTA solely for use for Clients who became Clients prior to the
End Date, and VLPI shall continue receiving the Fees therefor on a timely basis;
except that, VLPI shall not be obligated to provide such updates if this
Agreement is terminated pursuant to Section 10(c) or 10(d).
(g) The provisions of Sections 1(c), 1(d), 2, 4(b), (c), (d), (e), (f
), (g) and (h), 0, 0, 0, 0, 00(x), (x) and (g), and 12 shall survive the
expiration or termination of this Agreement for any reason.
SECTION 11. NATURE OF RELATIONSHIP. FTA shall conduct its business as
a principal for its own account and at its own expense and risk. FTA is and
shall remain an independent contractor of VLPI. Nothing in this Agreement may be
interpreted or construed to create any employment, partnership, agency, joint
venture, consulting, advisory, representative, subadvisory, or other similar
relationship between FTA and VLPI. FTA shall not represent itself directly or by
implication as having any such relationship with VLPI.
SECTION 12. MISCELLANEOUS. (a) The waiver, express or implied, by
either party of any right hereunder must be in writing and shall not constitute
a waiver of that same right thereafter, nor of any other right.
(b) Any provision of this Agreement that is determined by a court of
competent jurisdiction or state or federal agency to be prohibited or
unenforceable in any jurisdiction will, as to such provision and jurisdiction
only, be deemed severed, and subject to such severance, this Agreement will
continue in effect in accordance with its remaining terms and conditions.
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(c) Any notice required by this Agreement shall be in writing and shall
be deemed duly given only if sent by a recognized overnight courier service
(e.g., Federal Express) against signed receipt and shall be effective on the
date of delivery, as evidenced by the courier delivery confirmation. Notices
shall be given as follows:
If to VLPI: Value Line Publishing, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx
Chairman and CEO
If to FTA: First Trust Advisors L.P.
0000 Xxxxxxxxxxx Xxxx
Xxxxx, XX 00000
or to such other address as each party shall specify in a notice properly given
under this Section 12(c).
(d) This Agreement and Exhibits A, B, C, D and E attached and
incorporated hereto and made part hereof (i) constitute the final, sole and
complete agreement between the parties with respect to its subject matter and
supersedes and terminates all prior discussions and agreements, oral or written,
regarding its subject matter; and (ii) may not be altered, amended or modified
except by a writing signed by the Chairman and CEO of VLPI and the President of
FTA.
(e) This Agreement, and the parties' rights and obligations thereunder,
shall for all purposes Be solely and exclusively governed by, and construed,
interpreted and enforced in accordance with the laws of the State of New York
(excluding its principles of conflict of laws). The parties hereby agree that
the courts located in the State of New York, shall constitute the sole and
exclusive forum for the resolution of any and all disputes arising out of, under
or in connection with the Agreement and hereby consent to the jurisdiction of
such courts and irrevocably waive any objections thereto, including, without
limitation, on grounds of improper venue or forum non conveniens. The parties
agree that any judgments of such courts may be entered and enforced by any court
with jurisdiction over the party against which judgment was rendered or its
assets, wherever located.
(f) Should an action be instituted by either party against the other to
enforce any provision of this Agreement or otherwise to determine the rights and
obligations of the parties, the prevailing party shall be entitled to recover
reasonable attorneys' and expert fees and expenses from the other party.
(g) Neither party may assign this agreement without the consent of the
other signed by its chief executive officer, except only to an entity with the
same beneficial ownership as the original signatory.
Page 11
IN WITNESS WHEREOF, this Agreement has been duly executed by the duly
authorized representatives of the parties as of the Effective Date.
FIRST TRUST ADVISORS L.P. VALUE LINE PUBLISHING, INC.
By: /s/ Xxxxx X. Xxxxx /s/ Xxxx X. Xxxxxxx
-------------------------- -------------------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxxx
President Chairman and CEO
Page 12
EXHIBIT A
VALUE LINE TRADEMARKS
REGISTERED & COMMON LAW TRADEMARKS AND SERVICE MARKS OF VALUE LINE, INC.
1. U.S. FEDERALLY REGISTERED TRADEMARKS AND SERVICE MARKS
------------------------------------------------------
VALUE LINE
THE VALUE LINE INVESTMENT SURVEY
THE VALUE LINE INVESTMENT SURVEY (stylized)
THE VALUE LINE MUTUAL FUND SURVEY
V (& design)
VALUE GUARD
VALUEMASTER
VALU-MATIC
VALUE/SCREEN
VALUE LINE FUND ANALYZER
2. COMMON LAW TRADEMARKS AND SERVICE MARKS - U. S. APPLICATIONS PENDING
--------------------------------------------------------------------
VALUE LINE AGGRESSIVE INCOME TRUST
VALUE LINE ASSET ALLOCATION FUND, INC.
VALUE LINE DATAFILE
VALUE LINE ESTIMATES & PROJECTIONS FILE
THE VALUE LINE INVESTMENT SURVEY - EXPANDED EDITION
THE VALUE LINE INVESTMENT SURVEY - CONDENSED EDITION THE VALUE LINE
NO-LOAN FUND ADVISOR THE VALUE LINE OTC SPECIAL SITUATIONS SERVICE VALUE
LINE SELECT VALUE LINE STOCK ANALYZER VALUE LINE STRATEGIC ASSET
MANAGEMENT VALUE LINE U.S. MULTINATIONAL COMPANY FUND, INC.
3. COMMON LAW TRADEMARKS AND SERVICE MARKS
---------------------------------------
VALUE LINE -- A BEACON OF LIGHT
VALUE LINE ADJUSTABLE RATE U.S. GOVERNMENT SECURITIES FUND, INC.
VALUE LINE ARITHMETIC COMPOSITE INDEX
VALUE LINE ASSET MANAGEMENT
THE VALUE LINE CASH FUND, INC.
VALUE LINE CENTURION FUND, INC.
VALUE LINE CONVERTIBLES FUND, INC.
VALUE LINE CONVERTIBLES
VALUE LINE CONVERTIBLES INDEX
VALUE LINE CONVERTIBLE SECURITIES FILE
Page 1
THE VALUE LINE FUND, INC.
VALUE LINE GEOMETRIC COMPOSITE INDEX
VALUE LINE GUIDE TO CONVERTIBLE STRATEGIES
VALUE LINE GUIDE TO OPTION STRATEGIES
THE VALUE LINE INCOME FUND, INC.
VALUE LINE INDEX OF PUTS AND CALLS
VALUE LINE INDUSTRY REVIEW
VALUE LINE INVESTMENT SURVEY -- CANADIAN EDITION VALUE LINE LEVERAGED
GROWTH INVESTORS, INC. VALUE LINE MUTUAL FUND ADVISOR VALUE LINE NEW
YORK TAX EXEMPT TRUST VALUE LINE OPTIONS VALUE LINE PUBLISHING, INC.
VALUE LINE SECURITIES, INC,
VALUE LINE SOFTWARE
THE VALUE LINE SPECIAL SITUATIONS FUND, INC.
THE VALUE LINE TAX EXEMPT FUND , INC.
VALUE LINE TIMELINESS RANKING SYSTEM
VALUE LINE U.S. GOVERNMENT SECURITIES FUND, INC.
VALUE LINE WARRANT INDEX
VALUE LINES
VALUE PROBE
VALUE LINE INTERMEDIATE BOND FUND, INC.
VALUE LINE SMALL-CAP GROWTH FUND, INC.
VALUE LINE SELECTION AND OPINION
VALUE LINE RANK 1 STRATEGY
MINI VALUE LINE
Page 2
EXHIBIT B
Each Product is a series of First Defined Portfolios Fund, L.L.C. (the
"Fund"), an open-end management investment company which serves as a funding
vehicle for variable annuity contracts issued by American Skandia Life Assurance
Corporation.
Product #1 - The Value Line 25 Portfolio is a series of the Fund owning
approximately 25 securities chosen by FTA from the Group I stocks in Value
Line's Timeliness Ranking System.
Product #2 - The Managed VIP Portfolio is a series of the Fund which owns
securities chosen by FTA by applying several, but not necessarily all, of the
following investment strategies: (i) The Dow Target 5 Strategy; (ii) The Value
Line Target 25 Strategy; (iii) The Nasdaq Target 15 Strategy; (iv) The Dow DART
10 Strategy; (v) The European Target 20 Strategy; (vi) The Target Small-Cap
Strategy; (vii) The S&P Target 24 Strategy; and (viii) The Global Target 15
Strategy; provided however, that for purposes of Section 2 of the Agreement, the
Product shall be deemed to be the portion of the Managed VIP Portfolio invested
by applying the Value Line 25 Strategy.
As an open-end management investment company, each shareholder has the
right to redeem shares at any time at a price equal to the net asset value
thereof next computed after the shares are tendered for redemption.
EXHIBIT C
I acknowledge the proprietary and confidential nature of Value Line
Publishing material I use in my work at FTA Securities. I will keep it
confidential and use it only for the benefit of FTA Securities. I have been
informed by my employer of my and FTA's obligation under its agreement with
Value Line Publishing.
By: _______________________________________
Name:____________________________________
Title:___________________________________
Date: _______________________
EXHIBIT D
PERMITTED SUB-LICENSEES
First Defined Portfolio Fund, L.L.C.
American Skandia Life Assurance Corporation
EXHIBIT E
SUB-LICENSE AGREEMENT
THIS AGREEMENT, is made by and between First Trust Advisors, L.P.
("FTA"), whose principle offices are located at 0000 Xxxxxxxxxxx Xxxx, Xxxxx
000, Xxxxx, XX 00000, which is a Licensee of Value Line Publishing, Inc.
("VLPI"), 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and ______________
("Sub-Licensee"), whose principle offices are located at _____________________.
WHEREAS, VLPI is publisher of financial and business information and
compiles, calculates and owns all rights in its proprietary ranking systems,
including the "Value Line Timeliness Ranking System" (the "System"); and
WHEREAS, VLPI uses in commerce and owns the registered trade or service
names or marks listed in Exhibit A (the "Marks"); and
WHEREAS, VLPI and FTA have previously entered into a separate agreement
("License Agreement") concerning use of the System and Marks in relating to the
products described in Exhibit B to the License Agreement ("Products"); and
WHEREAS, Sub-License is a necessary participant in the Products; and
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, Sub-License and FTA, intending to be
legally bound agree as follows:
SECTION 1. SCOPE OF SUB-LICENSE. Sub-Licensee hereby acknowledges
that it has received, reviewed, and understands the License Agreement entered
into between FTA and VLPI relating to use of the System and Marks. Except as
noted herein, Sub-License hereby agrees to obligate itself to all the terms,
conditions, and obligations of that License Agreement as if Sub-Licensee were
the licensee under the Agreement. Sub-Licensee agrees that VLPI may exercise any
rights against Sub-Licensee (including, for example, limitation of liability or
indemnification rights) VLPI has against FTA to the same extent as if
Sub-Licensee were directly contracting VLPI. Sub-Licensee agrees it will not
assert against VLPI any defense, claim, or right Sub-Licensee may have against
FTA, including those of set-off, abatement, counter-claim, contribution, or
indemnification.
SECTION 2. TERM. The Terms of this Sub-License Agreement
automatically terminates, without Notice, if the Term of the License Agreement
terminates for any reason.
Page 1
IN WITNESS WHEREOF, the parties hereto have caused this Sub-License
Agreement to be executed by their duly authorized officers.
FIRST TRUST ADVISORS L.P. (Licensee)
By: _______________________________________
Name:____________________________________
Title:___________________________________
Authorized Officer
Date: _________________________
___________________________________________
(Sub-Licensee)
By:
Name:____________________________________
Title:___________________________________
Authorized Officer
Date: _________________________
Page 2
ATTACHMENT 2
AMENDMENT DATED MARCH 11, 2004
TO LICENSE AGREEMENT DATED AS OF MAY 1, 2002
BY AND BETWEEN VALUE LINE PUBLISHING, INC. AND FIRST TRUST ADVISORS, L.P.
This Amendment consolidates prior amendments to said License Agreement.
The last prior amendment was dated July 25, 2003. This Amendment adds three New
Products (the term "New Products" refers to Products agreed on between Value
Line and FTA on or after January 1, 2004; the term "Old Products" refers to
Products agreed on between Value Line and FTA in 2003 or earlier). Also this
Amendment further amends the License Agreement by establishing an increased fee
level of 15 basis points for New Products and by clarifying the language of the
termination provisions of the License Agreement. To the extent of any possible
conflict between this Amendment and any prior amendments or the License
Agreement this Amendment is deemed to control the relationship of the parties
and supersede any prior conflicting documents.
1. Paragraph 2 Payments, Records and Audit of the License Agreement as
previously amended is hereby amended and clarified by replacing subparagraph (a)
of said Paragraph 2 Payments, Records and Audit with the following which shall
be effective for all Products henceforth:
(a) FTA shall pay VLPI a license fee (the "Fee")
o on Old Products as defined in this Amendment
and listed under Old Products on "EXHIBIT B
MARCH 2004" equal to 2.5 basis points per
Calendar Quarter or 10 basis points per year
of the average gross total daily assets
invested in the Product during each Calendar
Quarter. The average gross total daily
assets invested in the Product during each
Calendar Quarter is referred to as "Average
Assets,"
o on New Products as defined in this amendment
and listed under New Products on "EXHIBIT B
MARCH 2004" equal to 3.75 basis points per
Calendar Quarter or 15 basis points per year
of Average Assets.
FTA shall pay VLPI said Fee for all Products within
thirty (30) calendar days after the end of each
Calendar Quarter. A "Calendar Quarter" is the three
(3) month period ending on each of March 31, June 30,
September 30, or December 31 of each year. The result
is that Value Line's Fee on Products agreed to before
2004 shall be 10 basis points per annum and the fee
to Value Line on Products agreed to on or after
January 1, 2004 shall be 15 basis points per annum.
Page 1
2. Xxxxxxxxx 00 Xxxx and Termination of the License Agreement as
previously amended is hereby amended by replacing subparagraph (b) of said
Xxxxxxxxx 00 Xxxx and Termination with the following which shall be effective
for each and every Product henceforth:
(b) Either party may terminate this Agreement as a whole or
any Product in its sole discretion for any reason and at any time
during the Term upon ninety (90) days' prior written notice to the
other party.
3. Xxxxxxxxx 00 Xxxx and Termination of the License Agreement is
further clarified by replacing original subparagraphs 10(f) and 10(g) with the
following:
(i) The provisions of Sections 1(c), 0(x), 0, 0(x), (x), (x),
(x), (x), (x) and (h), 5, 6, 7, 9, 10(e), 10(f), and 12 shall survive
the expiration or termination of this Agreement for any reason.
4. Exhibit B is amended by replacing it with the attached "EXHIBIT B
MARCH 2004."
[REMAINING PORTION OF THIS PAGE INTENTIONALLY LEFT BLANK]
Page 2
5. Exhibit D is amended by replacing it with the attached "EXHIBIT D
MARCH 2004."
6. All of the products described in this Agreement as amended, may be
made available in both the U.S. and Canada.
FIRST TRUST ADVISORS L.P. VALUE LINE PUBLISHING, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxx
------------------ -------------------
Xxxxx X. Xxxxx Xxxx X. Xxxxxxx
President Chairman and CEO
Page 3
EXHIBIT B - MARCH 2004
THE OLD PRODUCTS ARE:
[a] The Value Line(R) Target 25 Portfolio owns approximately 25
securities chosen by FTA from the Group I stocks in the Value Line(R)
Timeliness(TM) Ranking System. The Value Line Target 25 Portfolio is a series of
First Defined Portfolios Fund, L.L.C., an open-end management investment company
which serves as a funding vehicle for variable annuity contracts issued by
American Skandia Life Assurance Corporation (the "Annuity Fund").
[b] The Managed VIP Portfolio is a series of the Annuity Fund which
owns securities chosen by FTA by applying several, but not necessarily all, of
the following investment strategies: (i) The Dow Target 5 Strategy; (ii) The
Value Line(R) Target 25 Strategy; (iii) The NASDAQ Target 15 Strategy; (iv) The
Dow DART 10 Strategy; (v) The European Target 20 Strategy; (vi) The Target
Small-Cap Strategy; (vii) The S&P Target 24 Strategy; and (viii) The Global
Target 15 Strategy; provided, however, that for purposes of Section 2 of the
Agreement, the Product shall be deemed to be the portion of the Managed VIP
Portfolio invested by applying the Value Line(R) Target 25 strategy, that is,
the strategy used by the Value Line Target 25 Portfolio.
[c] First Trust Value Line(R) 100 Fund (the "100 Fund" traded AMEX
"FVL") is a closed-end management investment company. The 100 Fund will own the
#1 Timeliness(TM) Rank stocks per The Value Line Investment Survey(R). As a
closed-end management investment company, shareholders have no right to redeem
shares; however, the 100 Fund intends to list its shares for trading on a
national securities exchange.
[d] First Trust Value Line(R) Dividend Fund (the "Dividend Fund" traded
AMEX "FVD") is a closed-end management investment company. The Dividend Fund
will own a subset of the #1 and #2 Safety(TM) Rank stocks per The Value Line
Investment Survey(R), Value Line(R) will provide the names of all the current #1
and #2 Safety(TM) Rank stocks in the Value Line Investment Survey(R), and First
Trust will be solely responsible for screening those stocks for dividend yield
to determine the subset in which the Dividend Fund will invest. As a closed-end
management investment company, shareholders have no right to redeem shares;
however, the Dividend Fund intends to list its shares for trading on a national
securities exchange.
THE NEW PRODUCTS ARE:
[e] First Trust Value Line(R) & Ibbotson Equity Allocation Fund (the
"Allocation Fund") is a closed-end management investment company. The Allocation
Fund will own a subset of the, #1 and #2 ranked stocks per the Value Line(R)
Timeliness(TM), Safety(TM), and Technical(TM) Ranking Systems. First Trust will
be solely responsible for determining the subset in which the Allocation Fund
will invest. As a closed-end management investment company, shareholders have no
right to redeem shares; however, the Allocation Fund intends to list its shares
Page 1
for trading on a national securities exchange. The Allocation Fund will not
invest in Timeliness(TM) stocks with a market capitalization of less than $1
billion.
[f] First Trust Value Line(R) Split Corp (the "Split Corp Fund") is a
closed-end management investment company. The Split Corp Fund will select
approximately 50 stocks from the #1 ranked stocks in the Value Line(R)
Safety(TM) Ranking System, based on a proprietary screen that will identify
large and mid-cap dividend paying companies. First Trust will be solely
responsible for screening those stocks in which the Split Corp Fund will invest.
As a closed-end management investment company, shareholders have no right to
redeem shares. The Split Corp Fund will not invest in Timeliness stocks with a
market capitalization of less than $1 billion.
[g] First Trust Value Line(R) Dynamic Growth Fund (the "Growth Fund")
is a closed-end management investment company. The Growth Fund will own a subset
of the #1 and #2 ranked stocks per the Value Line(R) Timeliness(TM) and
Technical(TM) Ranking Systems and may be combined with the Value Line(R)
Industry Ranks. As a closed-end management investment company, shareholders have
no right to redeem shares; however, the Growth Fund intends to list its shares
for trading on a national securities exchange. The Growth Fund will not invest
in Timeliness(TM) stocks with a market capitalization of less than $1 billion.
Page 2
EXHIBIT D - MARCH 2004
Value Line(R) Target 25 Portfolio
Managed VIP Portfolio
First Trust Value Line(R) 100 Fund
First Trust Value Line(R) Dividend Fund
First Trust Value Line(R) & Ibbotson(R) Equity Allocation Fund
First Trust Value Line(R) Split Corp
First Trust Value Line(R) Dynamic Growth Fund
