EXHIBIT (H)(6)
S&P LICENSE AGREEMENT
----------------------
LICENSE AGREEMENT
LICENSE AGREEMENT, dated as of January 1, 1999 (the "Commencement Date") by
and between STANDARD & POOR'S, a division of The XxXxxx-Xxxx Companies, Inc.
("S&P"), a New York corporation, having an office at 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, and Principal Preservation Portfolios, Inc. (on behalf of its series
known as the S&P 100 Plus Portfolio), a Maryland corporation, and X.X. Xxxxxxx
and Company, a Wisconsin corporation (referred to together as the "Licensee"),
each having an office at 000 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxx 00000.
WHEREAS, S&P compiles, calculates, maintains and owns rights in and to the
S&P 100 Composite Stock Price Index and to the proprietary data therein
contained (such rights being hereinafter individually and collectively referred
to as the "S&P 100 Index"); and
WHEREAS, S&P uses in commerce and has trade name and trademark rights to
the designations "Standard & Poor's(R)", "S&P(R)", "S&P 100(R)" and "Standard &
Poor's 100 Index", in connection with the S&P 100 Index (such rights being
hereinafter individually and collectively referred to as the "S&P Marks"); and
WHEREAS, Licensee wishes to use the S&P 100 Index as a component of the
product or products described in Exhibit A attached hereto and made a part
hereof (the "Product"); and
WHEREAS, Licensee wishes to use the S&P Marks in connection with the
marketing and/or promotion of the Product and in connection with making
disclosure about the Product under applicable law, rules and regulations in
order to indicate that S&P is the source of the S&P 100 Index; and
WHEREAS, Licensee wishes to obtain S&P's authorization to use the S&P 100
Index and the S&P Marks in connection with the Product pursuant to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of License.
----------------
(a) Subject to the terms and conditions of this Agreement, S&P
hereby grants to Licensee a non-transferable, non-exclusive license (i) to use
the S&P 100 Index as a component of the Product to be marketed and/or promoted
by Licensee and (ii) to use and refer to the S&P Marks in connection with the
distribution, marketing and promotion of the Product (including in the name of
the Product) and in connection with making such disclosure about the Product as
Licensee deems necessary or desirable under any applicable law, rules,
regulations or provisions of this Agreement, but, in each case, only to the
extent necessary to indicate the source of the S&P 100 Index. It is expressly
agreed and understood by Licensee that no rights to use the S&P 100 Index and
the S&P Marks are granted hereunder other than those specifically described and
expressly granted herein.
(b) S&P agrees that no person or entity (other than the Licensee)
shall need to obtain a license from S&P with respect to the Product.
2. Term.
-----
The term of this Agreement shall commence on the Commencement Date and
shall continue in effect thereafter until it is terminated in accordance with
its terms.
3. License Fees.
-------------
(a) Licensee shall pay to S&P the license fees ("License Fees")
specified and provide the data called for in Exhibit B, attached hereto and made
a part hereof.
(b) During the term of this Agreement and for a period of one (1 )
year after its termination, S&P shall have the right, during normal business
hours and upon reasonable notice to Licensee, to audit on a confidential basis
the relevant books and records of Licensee to determine that License Fees have
been accurately determined. The costs of such audit shall be borne by S&P unless
it determines that it has been underpaid by five percent (5%) or more; in such
case, costs of the audit shall be paid by Licensee.
4. Termination.
------------
(a) At any time during the term of this Agreement, either party may
give the other party sixty (60) days prior written notice of termination if the
terminating party believes in good faith that material damage or harm is
occurring to the reputation or goodwill of that party by reason of its continued
performance hereunder, and such notice shall be effective on the date specified
therein of such termination, unless the other party shall correct the condition
causing such damage or harm within the notice period.
(b) In the case of breach of any of the material terms or conditions
of this Agreement by either party, the other party may terminate this Agreement
by giving sixty (60) days prior written notice of its intent to terminate, and
such notice shall be effective on the date specified therein for such
termination unless the breaching party shall correct such breach within the
notice period.
(c) S&P shall have the right, in its sole discretion, to cease
compilation and publication of the S&P 100 Index and, in such event, to
terminate this Agreement if S&P does not offer a replacement or substitute
index. In the event that S&P intends to discontinue the S&P 100 Index, S&P shall
give Licensee at least one (1) year's written notice prior to such
discontinuance, which notice shall specify whether a replacement or substitute
index will be made available. Licensee shall have the option hereunder within
sixty (60) days after receiving such written notice from S&P to notify S&P in
writing of its intent to use the replacement or substitute index, if any, under
the terms of this Agreement. In the event that Licensee does not exercise such
option or no substitute or replacement index is made available, this Agreement
shall be terminated as of the date specified in the S&P notice and the License
Fees to the date of such termination shall be computed as provided in Subsection
4(f).
(d) Licensee may terminate this Agreement upon ninety (90) days prior
written notice to S&P if (i) Licensee is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in
Licensee's reasonable judgment materially impairs Licensee's ability to market
and/or promote the Product; (ii) any material litigation or regulatory
proceeding regarding the Product is threatened or commenced; or (iii) Licensee
elects to terminate the public offering or other distribution of the Product, as
may be applicable. In such event the License Fees to the date of such
termination shall be computed as provided in Subsection 4(f).
(e) S&P may terminate this Agreement upon ninety (90) days (or upon
such lesser period of time if required pursuant to a court order) prior written
notice to Licensee if (i) S&P is informed of the final adoption of any
legislation or regulation or the issuance of any interpretation that in S&P's
reasonable judgment materially impairs S&P's ability to license and provide the
S&P 100 Index and S&P Marks under this Agreement in connection with such
Product; or (ii) any litigation or proceeding is threatened or commenced and S&P
reasonably believes that such litigation or proceeding would have a material and
adverse effect upon the S&P Marks and/or the S&P 100 Index or upon the ability
of S&P to perform under this Agreement. In such event the License Fees to the
date of such termination shall be computed as provided in Subsection 4(f).
(f) In the event of termination of this Agreement as provided in
Subsections 4(a), (b), (c), (d) or (e), the License Fees to the date of such
termination shall be computed by prorating the amount of the applicable annual
License Fees shown in Exhibit B on the basis of the number of elapsed days in
the current term. Any excess License Fees amount paid by Licensee for the
current term shall be refunded by S&P.
(g) Upon termination of this Agreement, Licensee shall cease to use
the S&P 100 Index and the S&P Marks in connection with the Product; provided
that Licensee may continue to utilize any previously printed materials which
contain the S&P Marks for a period of ninety (90) days following such
termination.
5. S&P's Obligations.
------------------
(a) It is the policy of S&P to prohibit its employees who are
directly responsible for changes in the components of the S&P 100 Index from
purchasing or beneficially owning any interest in the Product and S&P believes
that its employees comply with such policy. Licensee shall have no
responsibility for ensuring that such S&P employees comply with such S&P policy
and shall have no duty to inquire whether any purchasers or sellers of the
Product are such S&P employees. S&P shall have no liability to the Licensee with
respect to its employees' adherence or failure to adhere to such policy.
(b) S&P shall not and is in no way obliged to engage in any marketing
or promotional activities in connection with the Product or in making any
representation or statement to investors or prospective investors in connection
with the promotion by Licensee of the Product.
(c) S&P agrees to provide reasonable support for Licensee's
development and educational efforts with respect to the Product as follows: (i)
S&P shall provide Licensee, upon request but subject to any agreements of
confidentiality with respect thereto, copies of the results of any marketing
research conducted by or on behalf of S&P with respect to the S&P 100 Index; and
(ii) S&P shall respond in a timely fashion to any reasonable requests for
information by Licensee regarding the S&P 100 Index.
(d) S&P or its agent shall calculate and disseminate the S&P 100
Index at least once each fifteen (15) seconds in accordance with its current
procedures, which procedures may be modified by S&P.
(e) S&P shall promptly correct or instruct its agent to correct any
mathematical errors made in S&P's computations of the S&P 100 Index which are
brought to S&P's attention by Licensee, provided that nothing in this Section 5
shall give Licensee the right to exercise any judgment or require any changes
with respect to S&P's method of composing, calculating or determining the S&P
100 Index; and, provided further, that nothing herein shall be deemed to modify
the provisions of Section 9 of this Agreement.
6. Informational Materials Review.
-------------------------------
Licensee shall use its best efforts to protect the goodwill and
reputation of S&P and of the S&P Marks in connection with its use of the S&P
Marks under this Agreement. Licensee shall submit to S&P for its review and
approval all informational materials pertaining to and to be used in connection
with the Product, including, where applicable, all prospectuses, plans,
registration statements, advertisements, brochures and promotional and any other
similar informational materials (including documents required to be filed with
governmental or regulatory agencies) that in any way use or refer to S&P, the
S&P 100 Index, or the S&P Marks (the "Informational Materials"). S&P's approval
shall be required with respect to the use of and description of S&P, the S&P
Marks and the S&P 100 Index and shall not be unreasonably withheld or delayed by
S&P. Specifically, S&P shall notify Licensee of its approval or disapproval of
any Informational Materials within forty-eight (48) hours (excluding Saturday,
Sunday and New York Stock Exchange Holidays) following receipt thereof from
Licensee. Any disapproval shall state S&P's reasons therefor. Any failure by S&P
to respond within such forty-eight (48) hour period shall be deemed to
constitute a waiver of S&P's right to review such Informational Materials.
Informational Materials shall be addressed to S&P, c/o Xxxxxx Xxxxxxxxxx, Index
Services, Standard & Poor's, 00 Xxxxxxxx, Xxx Xxxx, XX 00000. Once Informational
Materials have been approved by S&P, subsequent Informational Materials which do
not alter the use or description of S&P, the S&P Marks or the S&P 100 Index need
not be submitted for review and approval by S&P.
7. Protection of Value of License.
-------------------------------
(a) During the term of this Agreement, S&P shall use its best efforts
to maintain in full force and effect federal registrations for "Standard &
Poor's(R)", "S&P(R)", and "S&P 100(R)". S&P shall at S&P's own expense and sole
discretion exercise S&P's common law and statutory rights against infringement
of the S&P Marks, copyrights and other proprietary rights.
(b) Licensee shall cooperate with S&P in the maintenance of such
rights and registrations and shall take such actions and execute such
instruments as S&P may from time to time reasonably request, and shall use the
following notice when referring to the S&P 100 Index or the S&P Marks in any
Informational Material:
"Standard & Poor's(R)", "S&P(R)", "S&P 100(R)", and "Standard & Poor's
100" Index are trademarks of The XxXxxx-Xxxx Companies, Inc. and have
been licensed for use by Principal Preservation Portfolios, Inc. and
X.X. Xxxxxxx and Company. The Product is not sponsored, endorsed, sold
or promoted by Standard & Poor's and Standard & Poor's makes no
representation regarding the advisability of investing in the Product.
or such similar language as may be approved in advance by S&P, it being
understood that such notice need only refer to the specific S&P Marks referred
to in the Informational Material.
8. Proprietary Rights.
-------------------
(a) Licensee acknowledges that the S&P 100 Index is selected,
coordinated, arranged and prepared by S&P through the application of methods and
standards of judgment used and developed through the expenditure of considerable
work, time and money by S&P. Licensee Also acknowledges that the S&P 100 Index
and the S&P Marks are the exclusive property of S&P, that S&P has and retains
all proprietary rights therein (including, but not limited to trademarks and
copyrights) and that the S&P 100 Index and its compilation and composition and
changes therein are in the control and discretion of S&P.
(b) S&P reserves all rights with respect to the S&P 100 Index and the
S&P Marks except those expressly licensed to Licensee hereunder.
(c) Each party shall treat as confidential and shall not disclose or
transmit to any third party any documentation or other written materials that
are marked as "Confidential and Proprietary" by the providing party
("Confidential Information"). Confidential Information shall not include (i) any
information that is available to the public or to the receiving party hereunder
from sources other than the providing party (provided that such source is not
subject to a confidentiality agreement with regard to such information) or (ii)
any information that is independently developed by the receiving party without
use of or reference to information from the providing party. Notwithstanding the
foregoing, either party may reveal Confidential Information to any regulatory
agency or court of competent jurisdiction if such information to be disclosed is
(a) approved in writing by the other party for disclosure or (b) required by
law, regulatory agency or court order to be disclosed by a party, provided, if
permitted by law, that prior written notice of such required disclosure is given
to the other party and provided further that the providing party shall cooperate
with the other party to limit the extent of such disclosure. The provisions of
this Subsection 8(c) shall survive any termination of this Agreement for a
period of five (5) years from disclosure by either party to the other of the
last item of such Confidential Information.
9. Warranties; Disclaimers.
------------------------
(a) S&P represents and warrants that S&P has the right to grant the
rights granted to Licensee herein and that, subject to the terms and conditions
of this Agreement, the license granted herein shall not infringe any trademark,
copyright or other proprietary right of any person not a party to this
Agreement.
(b) Licensee agrees expressly to be bound itself by and furthermore
to include all of the following disclaimers and limitations in each prospectus
relating to the Product and upon request to furnish a copy thereof to S&P:
The Product is not sponsored, endorsed, sold or promoted by Standard &
Poor's ("S&P"). S&P makes no representation or warranty, express or implied, to
the owners of the Product or any member of the public regarding the advisability
of investing in securities generally or in the Product particularly or the
ability of the S&P 100 Index to track general stock market performance. S&P's
only relationship to the Licensee is the licensing of certain trademarks and
trade names of S&P and of the S&P 100 Index which is determined, composed and
calculated by S&P without regard to the Licensee or the Product. S&P has no
obligation to take the needs of the Licensee or the owners of the Product into
consideration in determining, composing or calculating the S&P 100 Index. S&P is
not responsible for and has not participated in the determination of the prices
and amount of the Product or the timing of the issuance or sale of the Product
or in the determination or calculation of the equation by which the Product is
to be converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Product.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P
100 INDEX OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY
ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT, OR ANY
OTHER PERSON OR ENTITY FROM THE USE OF THE S&P 100 INDEX OR ANY DATA INCLUDED
THEREIN. S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 100 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
Any changes in the foregoing disclaimers and limitations must be approved
in advance in writing by S&P.
(c) Each party represents and warrants to the other that it has the
authority to enter into this Agreement according to its terms and that its
performance does not violate any laws, regulations or agreements applicable to
it.
(d) Licensee represents and warrants to S&P that the Product shall at
all times comply with the description in Exhibit A.
(e) Licensee represents and warrants to S&P that the Product shall
not violate any applicable law, including but not limited to banking,
commodities and securities laws.
(f) Neither party shall have any liability for lost profits or
indirect, punitive, special, or consequential damages arising out of this
Agreement, even if notified of the possibility of such damages. Without
diminishing the disclaimers and limitations set forth in Subsection 9(b), in no
event shall the cumulative liability of S&P to Licensee exceed the average
annual License Fees actually paid to S&P hereunder.
(g) Use of any marks by Licensee in connection with its Product
(including in the name of such Product) which are not the S&P Marks is at
Licensee's sole risk.
(h) The provisions of this Section 9 shall survive any termination of
this Agreement.
10. Indemnification.
----------------
(a) Licensee shall indemnify and hold harmless S&P, its affiliates
and their officers, directors, employees and agents against any and all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) as a result of any claim, action or proceeding that arises
out of or relates to (a) this Agreement, except insofar as it relates to a
breach by S&P of its representations or warranties hereunder, or (b) the
Product; provided, however, that S&P notifies Licensee promptly of any such
claim, action or proceeding. Licensee shall periodically reimburse S&P for its
reasonable expenses incurred under this Subsection 10(a). S&P shall have the
right, at its own expense, to participate in the defense of any claim, action or
proceeding against which it is indemnified hereunder; provided, however, it
shall have no right to control the defense, consent to judgment, or agree to
settle any such claim, action or proceeding without the written consent of
Licensee without waiving the indemnity hereunder. Licensee, in the defense of
any such claim, action or proceeding except with the written consent of S&P,
shall not consent to entry of any judgment or enter into any settlement which
either (a) does not include, as an unconditional term, the grant by the claimant
to S&P of a release of all liabilities in respect of such claims or (b)
otherwise adversely affects the rights of S&P. This provision shall survive the
termination or expiration of this Agreement.
(b) S&P shall indemnify and hold harmless Licensee, its affiliates
and their officers, directors, employees and agents against any and all
judgments, damages, costs or losses of any kind (including reasonable attorneys'
and experts' fees) as a result of any claim, action, or proceeding that arises
out of or relates to any breach by S&P of its representations or warranties
under this Agreement; provided, however, that (a) Licensee notifies S&P promptly
of any such claim, action or proceeding; (b) Licensee grants S&P control of its
defense and/or settlement; and (c) Licensee cooperates with S&P in the defense
thereof. S&P shall periodically reimburse Licensee for its reasonable expenses
incurred under this Subsection 10(b). Licensee shall have the right, at its own
expense, to participate in the defense of any claim, action or proceeding
against which it is indemnified hereunder; provided, however, it shall have no
right to control the defense, consent to judgment, or agree to settle any such
claim, action or proceeding without the written consent of S&P without waiving
the indemnity hereunder. S&P, in the defense of any such claim, action or
proceeding, except with the written consent of Licensee, shall not consent to
entry of any judgment or enter into any settlement which either (a) does not
include, as an unconditional term, the grant by the claimant to Licensee of a
release of all liabilities in respect of such claims or (b) otherwise adversely
affects the rights of Licensee. This provision shall survive the termination or
expiration of this Agreement.
11. Suspension of Performance.
--------------------------
Neither S&P nor Licensee shall bear responsibility or liability for
any losses arising out of any delay in or interruptions of their respective
performance of their obligations under this Agreement due to any act of God, act
of governmental authority, act of the public enemy or due to war, the outbreak
or escalation of hostilities, riot, fire, flood, civil commotion, insurrection,
labor difficulty (including, without limitation, any strike, or other work
stoppage or slow down), severe or adverse weather conditions, communications
line failure, or other similar cause beyond the reasonable control of the party
so affected.
12. Other Matters.
--------------
(a) This Agreement is solely and exclusively between the parties
hereto and shall not be assigned or transferred by either party, without the
prior written consent of the other party, and any attempt to so assign or
transfer this Agreement without such written consent shall be null and void.
(b) This Agreement constitutes the entire agreement of the parties
hereto with respect to its subject matter and may be amended or modified only by
a writing signed by duly authorized officers of both parties. This Agreement
supersedes all previous agreements between the parties with respect to the
subject matter of this Agreement. There are no oral or written collateral
representations, agreements, or understandings except as provided herein.
(c) No breach, default, or threatened breach of this Agreement by
either party shall relieve the other party of its obligations or liabilities
under this Agreement with respect to the protection of the property or
proprietary nature of any property which is the subject of this Agreement.
(d) Except as set forth in Section 6 hereof with respect to
Informational Materials, all notices and other communications under this
Agreement shall be (i) in writing, (ii) delivered by hand, by registered or
certified mail, return receipt requested, or by facsimile transmission to the
address or facsimile number set forth below or such address or facsimile number
as either party shall specify by a written notice to the other and (iii) deemed
given upon receipt.
Notice to S&P: Standard & Poor's
------------- 00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx,
Senior Vice President, Index Services
Fax #: (000) 000-0000
Notice to Licensee: Principal Preservation Portfolios, Inc.
------------------- 000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx
President
Fax #: (000) 000-0000
(e) This Agreement shall be interpreted, construed and enforced in
accordance with the laws of the State of New York.
(f) Each party agrees that in connection with any legal action or
proceeding arising with respect to this Agreement, they will bring such action
or proceeding only in the United States District Court for the Southern District
of New York or in the Supreme Court of the State of New York in and for the
First Judicial Department and each party agrees to submit to the jurisdiction of
such court and venue in such court and to waive any claim that such court is an
inconvenient forum.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first set forth above.
PRINCIPAL PRESERVATION STANDARD & POOR'S
PORTFOLIOS, INC. (ON BEHALF OF a division of
THE S&P 100 PLUS PORTFOLIO) The XxXxxx-Xxxx Companies, Inc.
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxxxx
BY: --------------------------------- BY: ---------------------------------
Xxxxxx X. Xxxxxxxxx Xxxxxx X. Shakatko
TITLE: President TITLE: Senior V.P. Index Services
X.X. XXXXXXX AND COMPANY
/s/ Xxxxxx X. Xxxxxxxxx
BY: ---------------------------------
Xxxxxx X. Xxxxxxxxx
TITLE: Vice President
EXHIBIT A
---------
PRODUCT
Product: S&P 100 Plus Portfolio is a publicly offered fund whose investment
objective is to obtain a total return from dividends and capital gains
which, before deducting the Portfolio's operating expenses, exceeds
the total return of the S&P 100 Index.
EXHIBIT B
---------
LICENSE FEES
With respect to each individual Product issued pursuant to this Agreement,
Licensee shall pay S&P License Fees computed as follows:
The annual License Fee shall be $1,000 (the "Minimum Annual Fee"). The
Minimum Annual Fee shall be payable on the Commencement Date and on each one
year anniversary thereof. Licensee shall Also pay S&P a License Fee according to
the following schedule:
AVERAGE NET ASSET VALUE OF THE
S&P 100 PLUS PORTFOLIO FEE TO S&P
---------------------- ----------
$0 to $50,000,000.00 (fifty million dollars) -0-
$50,000,000.00 - $250,000,000 Two basis points (.0002) of the
average net asset value of the S&P
100 Plus Portfolio Fund computed
quarterly
Over $250,000,000 One basis point (.0001) of the
average net asset value of the S&P
100 Plus Portfolio Fund computed
quarterly
With respect to each Product, amounts in excess of the Minimum Annual Fee
shall be paid to S&P within thirty (30) days after the close of each calendar
quarter in which they are incurred; each such payment shall be accompanied by a
statement setting forth the basis for its calculation.
In any year during the term of this Agreement that the S&P 100 Plus
Portfolio's average net asset value exceeds fifty million dollars, the Minimum
Annual Fee will be waived.
