EXHIBIT 2.2
AGREEMENT
THIS AGREEMENT, made as of this 22nd day of September, 2006, by and
between Argus Investors' Counsel, Inc. ("Argus"), a New York corporation, and
Xxx Xxxxxx Funds Inc. ("Xxx Xxxxxx"), a Delaware corporation.
WITNESSETH:
WHEREAS, Argus is an investment adviser registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, all proprietary rights to the service xxxx "Argus" (the
"Property") are owned by Argus;
WHEREAS, Xxx Xxxxxx sponsors, underwrites and distributes a wide array
of unit investment trusts ("UITs");
WHEREAS, Xxx Xxxxxx desires to establish one or more UITs that will
each initially invest substantially all of its assets in securities selected by
Argus in accordance with the securities selection criteria set forth in Exhibit
A attached hereto (the "Trusts");
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the
Property for use in connection with the Trusts;
WHEREAS, Xxx Xxxxxx further desires the services of Argus in advising
and consulting with Xxx Xxxxxx with respect to securities selection in
accordance with the description of the securities selection criteria set forth
in Exhibit A attached hereto, and the investment concerns and strategies of
Argus; and
WHEREAS, Argus is willing to license the Property to Xxx Xxxxxx and the
Trusts and Argus is willing to provide the aforesaid services to Xxx Xxxxxx
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Grant of License. (a) Subject to the terms and conditions of this
Agreement, Argus hereby grants to Xxx Xxxxxx and the Trusts, a license to use
and refer within the United States to the Property in connection with the Trusts
in such manner as may be deemed to be appropriate by Xxx Xxxxxx, subject to the
prior approval of Argus, which approval shall not be unreasonably withheld.
(b) Argus covenants and agrees that no person or entity other than Xxx
Xxxxxx shall need to obtain any other license with respect to the Property in
connection with the creation, offering or operation of the Trusts.
(c) Argus represents and warrants that it owns all proprietary rights
in and to the Property and any security selection strategy developed by Argus
and used in connection with the services provided under Section 2 hereof (a
"Strategy") for use in connection with the creation and distribution of unit
investment trusts and in connection with the provision of the services
contemplated by this Agreement and has the right to license the same to Xxx
Xxxxxx and the Trusts pursuant to this Agreement.
(d) Xxx Xxxxxx, on behalf of the Trusts, acknowledges that Argus has
represented and warranted that the Property and any Strategy are the exclusive
property of Argus and that Argus has and retains all proprietary rights thereto
except to the extent otherwise provided herein. Except as otherwise specifically
provided herein, Argus reserves all rights to the Property and any Strategy, and
this Agreement shall not be construed to transfer to Xxx Xxxxxx any ownership
right to, or equity interest in, any of the Property or a Strategy.
2. Identification of Securities. (a) During the term of this Agreement,
Xxx Xxxxxx shall provide Argus with reasonable advance notice of the filing of
each registration statement (inclusive of any post-effective amendments)
pertaining to a Trust ("Registration Statement") and, subject to the foregoing,
Argus will provide to Xxx Xxxxxx within ten (10) days of Xxx Xxxxxx'x written
request a list of all securities that fit within the parameters described in
Exhibit A in connection with each Trust (the "Identified Securities"). Such
Identified Securities will be deposited in the related Trust's portfolio (the
"Portfolio Securities"); provided, however, that Xxx Xxxxxx reserves the right
to modify the initial Portfolio Securities based upon all information available
to it, including, among other factors, market capitalization and liquidity
considerations, subject to the prior approval of Argus, which approval will not
be unreasonably withheld.
(b) Argus will provide Xxx Xxxxxx with information reasonably requested
by Xxx Xxxxxx about the Portfolio Securities for use by Xxx Xxxxxx in preparing
updated prospectus disclosure and marketing materials for the Trusts. Argus also
agrees to review and comment upon disclosure in the Registration Statement
referred to in Section 12 hereof.
(c) Argus shall periodically consult with and advise Xxx Xxxxxx
regarding the securities or methodologies used to identify those securities for
inclusion in any Trust at a time and place mutually agreed upon by the parties.
With the prior consent of Argus, which consent will not be unreasonably
withheld, Xxx Xxxxxx may permit others to participate in these consultations.
(d) Xxx Xxxxxx acknowledges receipt of the disclosure statement of
Argus, as required by Rule 204-3 under the Advisers Act, not less than
forty-eight (48) hours prior to entering into this Agreement.
3. Argus' Services Unique. Argus and Xxx Xxxxxx agree that the services
to be performed by Argus as set forth in Section 2 herein are unique and may not
be performed by anyone other than Argus.
4. Fees. (a) For the license granted pursuant to Section 1, Xxx Xxxxxx,
on behalf of the Trusts, agrees that each Trust shall pay Argus an annual fee
during the term of such Trust equal to six basis points (0.06%) of the average
daily net asset value of such Trust. Such fee shall be paid within thirty (30)
days following the close of each calendar quarter in which it is incurred and
will be based on the average daily net asset value of the related Trust during
such calendar quarter as determined as of the end of such calendar quarter.
(b) For the services to be performed pursuant to Section 2, Xxx Xxxxxx,
on behalf of each Trust, agrees that each Trust shall pay Argus a fee equal to
six basis points (0.06%) of the net asset value of such Trust as of the end of
the initial offering period of such Trust. Such fee shall be paid by the trustee
of each Trust to Argus within thirty (30) days following the end of the initial
offering period of such Trust.
5. Term. Subject to Section 8, the term of this Agreement shall
commence and continue as described in this Section. The term of this Agreement
shall commence as of the date set forth above (the "Effective Date") and shall
remain in full force and effect until the fifth (5th) anniversary of the
Effective Date, unless this Agreement is terminated earlier as provided herein
(such term being referred to as the "Initial Term"). At the end of the Initial
Term, this Agreement shall automatically renew for successive one-year periods
unless a party terminates the Agreement by providing the other party a written
notice to that effect ninety (90) days prior to the end of the then-current
term.
6. Assignment. Neither of the parties hereto may assign (including
within the meaning of the Advisers Act) its respective rights and obligations
under this Agreement without the prior written consent of the other.
7. Relationship of the Parties. The parties understand and agree that
this Agreement shall not be deemed to create any partnership or joint venture
between Xxx Xxxxxx and Argus, and that any services performed hereunder by Argus
shall be as an independent contractor and not as an employee or agent of Xxx
Xxxxxx or any Trust. Argus shall have no authority whatsoever to bind Xxx Xxxxxx
or any Trust on any agreement or obligation and Argus agrees that Argus shall
not hold itself out as an employee or agent of Xxx Xxxxxx or any Trust. Xxx
Xxxxxx shall have no authority whatsoever to bind Argus on any agreement or
obligation and Xxx Xxxxxx agrees that Xxx Xxxxxx shall not hold itself out as an
employee or agent of Argus.
8. Termination. (a) Argus may terminate this Agreement immediately upon
a material breach of any representation, warranty or covenant of Xxx Xxxxxx that
is not remedied within ten (10) business days after written notice.
(b) Xxx Xxxxxx may terminate this Agreement immediately upon a material
breach of any representation, warranty or covenant of Argus that is not remedied
within ten (10) business days after written notice thereof.
(c) Argus and Xxx Xxxxxx may terminate this Agreement at any time upon
the execution by all parties of a written agreement to that effect.
(d) Any termination under Section 8(a) or (b) shall not limit any other
remedies for breach the non-breaching party may have at law or in equity.
Notwithstanding any provision of this Agreement to the contrary, termination of
this Agreement shall not constitute termination of any Trust.
9. Confidentiality. (a) The parties agree that certain material and
information which has or may come into the possession or knowledge of each in
connection with this Agreement or the performance hereof (e.g., proprietary
business information (including, without limitation, the names and addresses or
other personal information of customers, distributors, information providers and
suppliers)), consists of confidential and proprietary data whose disclosure to
or use by third parties would be damaging. In addition, the parties may
reasonably designate, by notice in writing delivered to the other parties, other
information as being confidential or a trade secret.
(b) All such proprietary or confidential information of each party
hereto shall be kept secret by the other party to the degree it keeps secret its
own confidential or proprietary information. Such information belonging to a
party shall not be disclosed by the other party to its employees, officers,
agents, service providers or affiliates, except on a need-to-know basis, but may
be disclosed by such other party to State, Federal, or other governmental
agencies, authorities or courts as required by law or regulation, or upon their
order or request provided prompt notice of such order or request is given by
such party to the party to which such information belongs, if such notice is
legally permitted.
(c) No information that would otherwise be proprietary or confidential
for purposes of this Agreement pursuant to subsections (a) or (b) above shall be
subject to the restrictions on disclosure imposed by this Section in the event
and to the extent that (i) such information is in, or becomes part of, the
public domain otherwise than through the fault of a party to which such
information does not belong, (ii) such information was known to such party prior
to the execution of this Agreement, or (iii) such information was revealed to
such party by a third person, and which the receiving party reasonably believes
has been obtained by such third person not in violation of any existing
confidentiality or non-disclosure agreement.
(d) Each party acknowledges and agrees that a breach of this Section 9
would cause a permanent and irreparable damage for which money damages would be
an inadequate remedy. Therefore, each party shall be entitled to seek equitable
relief (including injunction and specific performance) in the event of any
breach of the provisions of this Section 9, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section 9 shall survive the
termination of this Agreement.
10. Covenants. During the period of this Agreement and for as long as
any of the Trusts remains outstanding, each of the parties agree to:
(a) comply with all codes, regulations and laws applicable to the
performance of its obligations under this Agreement and obtain or have obtained
all necessary permits, licenses and other authorizations necessary for such
performance and maintain its business reputation and good standing;
(b) take such other actions as the other party hereto may reasonably
request to more effectively carry out its obligations under this Agreement; and
(c) do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations, including, but not by way of limitation,
obtaining all consents, approvals, and authorizations, required of such party in
connection with the consummation of the transactions contemplated by this
Agreement. No party shall take any action that would be expected to result in
any of its representations and warranties set forth in this Agreement being or
becoming untrue in any material respect.
In addition, Argus may not refer to Xxx Xxxxxx or any affiliates in any
kind of communications, whether oral, written or electronic, or otherwise, and
whether in a piece published by Argus or in response to questions of the media
or others, without Xxx Xxxxxx'x prior written consent, except that Argus may
state that Argus licenses the Property to the Trusts and may describe the
services provided under this Agreement to the extent that such services are
described in any registration statement or other publicly available materials
produced by Xxx Xxxxxx.
11. Indemnification. (a) By Xxx Xxxxxx. In the event any claim is
brought by any third party against Argus or any of Argus' affiliates that
relates to, arises out of or is based upon the performance by Xxx Xxxxxx of its
obligations hereunder, or the failure of Xxx Xxxxxx, or any of Xxx Xxxxxx'x
affiliates, as the case may be, to comply with any law, rule or regulation
relating to the Trusts, Argus or Argus' affiliates, as the case may be, shall
promptly notify Xxx Xxxxxx and Xxx Xxxxxx shall defend such claim at its expense
and under its control. Xxx Xxxxxx shall indemnify and hold harmless Argus and
Argus' affiliates against any judgment, liability, loss, cost or damage
(including litigation costs and reasonable attorneys' fees) arising from or
related to such claim, whether or not such claim is successful. Argus or Argus'
affiliates, as the case may be, shall have the right, at their expense, to
participate in the defense of such claim through counsel of their own choosing;
provided, however, Xxx Xxxxxx shall not be required to pay any settlement amount
that it has not approved in advance. Notwithstanding the above, neither Argus
nor any of Argus' affiliates shall be entitled to indemnification hereunder to
the extent that the judgment, liability, loss, cost or damage arising from a
claim for which indemnification is sought hereunder results directly or
indirectly from the gross negligence or willful misconduct of Argus or Argus'
affiliates.
(b) By Argus. In the event any claim is brought by any third party
against Xxx Xxxxxx, any of the Trusts, or any of Xxx Xxxxxx'x affiliates that
relates to, arises out of or is based upon the performance by Argus of its
obligations hereunder, or the failure of Argus or any of Argus' affiliates, as
the case may be, to comply with any law, rule or regulation, Xxx Xxxxxx, the
Trusts, or Xxx Xxxxxx'x affiliates, as the case may be, shall promptly notify
Argus and Argus shall defend such claim at its expense and under its control.
Argus shall indemnify and hold harmless Xxx Xxxxxx, the Trusts, and Xxx Xxxxxx'x
affiliates against any judgment, liability, loss, cost or damage (including
litigation costs and reasonable attorneys' fees) arising from or related to such
claim, whether or not such claim is successful. Xxx Xxxxxx, the Trusts, or Xxx
Xxxxxx'x affiliates, as the case may be, shall have the right, at their expense,
to participate in the defense of such claim through counsel of their own
choosing; provided, however, Argus shall not be required to pay any settlement
amount that it has not approved in advance. Notwithstanding the above, neither
Xxx Xxxxxx, the Trusts, nor any of Xxx Xxxxxx'x affiliates shall be entitled to
indemnification hereunder to the extent that the judgment, liability, loss, cost
or damage arising from a claim for which indemnification is sought hereunder
results directly or indirectly from the gross negligence or willful misconduct
of Xxx Xxxxxx, the Trusts, or Xxx Xxxxxx'x affiliates.
(c) The indemnifications set forth in this Section 11 shall survive the
termination of this Agreement for any cause whatsoever.
12. Review of Registration Statement. Argus hereby acknowledges that it
has reviewed and had an opportunity to comment upon those provisions of the
Registration Statement, as amended, specifically referring to or describing
Argus and the securities selection process. For purposes of the foregoing, a
draft of the Registration Statement is attached hereto as Exhibit B.
13. Governing Law. This Agreement shall be interpreted, construed and
enforced in accordance with the laws of the State of New York without reference
to or inclusion of the principles of choice of law or conflicts of law of that
jurisdiction. It is the intent of the parties that the substantive law of the
State of New York govern this Agreement and not the law of any other
jurisdiction incorporated through choice of law or conflicts of law principles.
14. Waiver of Breach. The failure of a party to require the performance
of any term of this Agreement or the waiver of a party of any breach hereunder
shall not prevent a subsequent enforcement of such term nor be deemed a waiver
of any subsequent breach.
15. Scope of Agreement. This document constitutes the entire Agreement
of the parties with respect to the subject matter hereof, supersedes all prior
oral or written agreements, and can be amended only by a writing executed by all
of the parties.
16. Notices. All notices from any party to the other pursuant to this
Agreement shall be in writing or by facsimile transmission and shall be sent to
the following addresses, or to such addresses as the parties hereto may be
notified in writing from time to time:
If to Argus:
000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
With copy to:
Argus Investors' Counsel, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Office of the General Counsel
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to:
Xxx Xxxxxx Funds Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Office of the General Counsel
Notices shall be deemed given upon receipt via certified mail,
overnight courier, or hand delivery.
17. Severability. In the event that any provision of this Agreement or
application hereof to any person or in any circumstances shall be determined to
be invalid, unlawful, or unenforceable to any extent, the remainder of this
Agreement, and the application of any provision to persons or circumstances
other than those as to which it is determined to be unlawful, invalid or
enforceable, shall not be affected thereby, and each remaining provision of this
Agreement shall continue to be valid and may be enforced to the fullest extent
permitted by law.
18. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed by a duly authorized representative thereof as of the
date first above written.
XXX XXXXXX FUNDS INC.
By:________________________________
Name: _____________________________
Title: ______________________________
ARGUS INVESTORS' COUNSEL, INC.
By:_______________________________
Name: ____________________________
Title:______________________________
EXHIBIT A
The portfolio of each Trust will consist of securities issued by
companies identified by Argus as underperforming companies and as potential
targets of shareholder activists. The selection process shall use (1) a
valuation component designed to identify underperforming stocks, (2) a component
designed to identify potential targets of shareholder activism, (3) analysis of
liquidity of securities based on the estimated size of the related Trust and (4)
such other criteria as may be deemed appropriate by Argus and acceptable to Xxx
Xxxxxx. The valuation component shall consist of such valuation screens as may
determined by Argus and acceptable to Xxx Xxxxxx, which screens may include, but
not necessarily be limited to, analysis of price performance, total return,
earnings trends and market capitalization. The activism component shall include
an analysis of such factors as may be determined by Argus and acceptable to Xxx
Xxxxxx, which factors may include, but not necessarily be limited to, the number
of shareholder activists owning a security, the percentage of outstanding shares
of a security held by activists and timeliness of regulatory filings relating to
security ownership.
EXHIBIT B
Registration Statement
Attached
