AGREEMENT
THIS AGREEMENT, made as of this 20th day of October, 2005, by and between
Xxxxx & Steers Capital Management Inc. ("C&S"), a New York corporation, and Xxx
Xxxxxx Funds Inc. ("Xxx Xxxxxx"), a Delaware corporation.
WITNESSETH:
WHEREAS, C&S is a registered investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, all proprietary rights to the service xxxx "Xxxxx & Steers" are
owned by C&S;
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 C&S
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 name
"Xxxxx & Steers" for use in connection with the Trusts;
WHEREAS, Xxx Xxxxxx further desires the services of C&S 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 C&S's investment concerns and strategies;
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires the services of C&S
to act as Supervisor, as defined by the trust indenture governing a particular
Trust, in connection with the Trusts; and
WHEREAS, C&S are willing to license the name "Xxxxx & Steers" to Xxx Xxxxxx
and the Trusts solely for use in connection with the Trusts, and C&S 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, C&S hereby
grants to Xxx Xxxxxx and the Trusts, a license to use and refer
within the United States to the service marks "Xxxxx & Steers"
(referred herein as the "Xxxxx & Steers Property") solely in
connection with the Trusts, in such manner as may be deemed to be
appropriate by Xxx Xxxxxx, subject to the prior approval of C&S,
which approval shall not be unreasonably withheld.
(b) C&S covenants and agrees that no person or entity other than Xxx
Xxxxxx shall need to obtain any other license with respect to the
Xxxxx & Steers Property in connection with the initial sale of
the Trusts or subsequent resales of the Trusts in the secondary
market.
(c) C&S represents and warrants that they own all proprietary rights
in and to the Xxxxx & Steers Property 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 have the right to license the same to Xxx
Xxxxxx and the Trusts pursuant to this Agreement.
(d) Except as otherwise specifically provided herein, C&S reserve all
rights to the Xxxxx & Steers Property, and this Agreement shall
not be construed to transfer to Xxx Xxxxxx any ownership right
to, or equity interest in, any of the Xxxxx & Steers Property.
2. Identification of Securities.
(a) During the period commencing on the date hereof and ending on the
Termination Date (as defined in Section 6 hereof), Xxx Xxxxxx
shall provide C&S 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, C&S 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 C&S, which
approval will not be unreasonably withheld.
(b) C&S 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. C&S also agrees to review and comment
upon disclosure in the Registration Statement referred to in
Section 14 hereof.
(c) C&S 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
C&S, which consent will not be unreasonably withheld, Xxx Xxxxxx
may permit others to participate in these consultations.
3. Supervision. C&S shall act as Supervisor, as defined by the trust
agreement governing the particular Trust, in accordance with such
trust agreement. The terms of the trust agreement applicable to the
Supervisor are incorporated herein by reference. In the event that any
provision in this Agreement conflicts in any way with the trust
agreement governing a particular Trust, the provisions of the trust
agreement in respect thereof shall control.
4. C&S' Services Unique. C&S and Xxx Xxxxxx agree that the services to be
performed by C&S to the Trusts as set forth in Sections 2 and 3 herein
are unique and may not be performed by anyone other than C&S.
5. Fees.
(a) For the license granted pursuant to Section 1, Xxx Xxxxxx, on
behalf of each Trust, agrees that each Trust shall pay C&S an
annual fee equal to ten basis points (0.10%) of the average daily
Evaluation Price of all assets comprising such Trust (the
"License Fee"). The trustee of each Trust shall accrue such fee
daily and pay such fee to C&S in installments within fifteen (15)
days following the end of each calendar quarter during the term
of such Trust. "Evaluation Price" as used in this Section 5 shall
mean the "current net asset value" as defined in the Investment
Company Act of 1940, as amended.
(b) For the services to be performed pursuant to Section 2, Xxx
Xxxxxx, on behalf of each Trust, agrees that each Trust shall pay
C&S a fee equal to twenty basis points (0.20%) of the aggregate
Evaluation Price of all assets comprising such UIT as of the end
of the primary offering period of each Trust (the "Portfolio
Consultant Fee"). Such fee shall be paid by the trustee of the
Trusts to C&S within fifteen (15) days following the end of the
primary offering period of such Trust.
(c) For the services to be performed pursuant to Section 3, Xxx
Xxxxxx, on behalf of each Trust, agrees that each Trust shall pay
C&S in accordance with the terms of the trust agreement governing
such Trust (the "Supervisor Fee").
6. Term. Subject to the provisions of Section 10, the term of this
Agreement shall be the earlier of five (5) years from the date first
above written or until all of the Trusts are liquidated and their
legal existences terminated ("Termination Date"). In this connection,
Xxx Xxxxxx agrees that it will not originate any Trust beyond the
fifth anniversary of the date first above written.
7. Exclusivity and Right of First Refusal.
(a) C&S covenants and agrees that, for three (3) years from the date
first above written, neither C&S, nor anyone acting on its
behalf, shall be associated or involved with any UIT sponsor,
distributor or seller in the creation, marketing or sale of any
non-exchange traded UIT selected using parameters substantially
similar to those described in Exhibit A within the United States
other than the Trusts.
(b) C&S covenants and agrees that, for three (3) years from the date
first above written, neither C&S, nor anyone acting on its
behalf, shall be associated or involved with any UIT sponsor,
distributor or seller in the creation, marketing or sale of any
non-exchange-traded UIT within the United States other than the
Trusts in connection with the creation, marketing or promotion of
any non-exchange-traded UIT within the United States other than
the Trusts unless C&S shall have first promptly delivered a bona
fide written offer to Xxx Xxxxxx to act as sponsor, depositor,
promoter, underwriter or distributor of such a UIT and Xxx Xxxxxx
shall have failed to provide a written acceptance of such offer
to C&S within 15 days after receipt of such offer. The preceding
sentence shall not limit the provisions of either the immediately
preceding Section 7(a) of this Agreement.
(c) Nothing contained herein shall limit the right of C&S to sponsor,
create, market or promote any investment company (as defined in
Section 3(a)(1) of the Investment Company Act of 1940, as
amended, disregarding the provisions of Sections 3(b) and 3(c)
thereof), other than a UIT.
8. Assignment. None of the parties hereto may assign (including within
the meaning of the Investment Advisers Act of 1940, as amended) its
respective rights and obligations under this Agreement without the
prior written consent of the others.
9. Relationship of the Parties. The parties understand and agree that
this Agreement shall not be deemed to create any partnership or joint
venture between Xxx Xxxxxx and C&S, and that the services performed
hereunder by C&S shall be as an independent contractor and not as an
employee or agent of Xxx Xxxxxx. C&S shall have no authority
whatsoever to bind Xxx Xxxxxx on any agreement or obligation and C&S
agrees that C&S shall not hold itself out as an employee or agent of
Xxx Xxxxxx.
10. Termination.
(a) C&S 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
C&S that is not remedied within ten (10) business days after
written notice thereof.
(c) C&S 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 10(a) or ((b) shall not limit any
other remedies for breach the non-breaching parties 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 or any license granted
hereunder to any Trust then in existence.
11. 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
customer, 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 every other party to the degree it
keeps secret its own confidential or proprietary information.
Such information belonging to any party shall not be disclosed by
another party to its employees, officers, agents, service
providers or affiliates, except on a need-to-know basis, but may
be disclosed by such other party to State, Federal, or other
governmental agencies, authorities or courts as required by law
or regulation, or upon their order or request provided prompt
notice of such order or request is given by such other party to
the party to which such information belongs, if such notice is
legally permitted.
(c) No information that would otherwise be proprietary or
confidential for purposes of this Agreement pursuant to
subsections (a) or (b) above shall be subject to the restrictions
on disclosure imposed by this Section in the event and to the
extent that (i) such information is in, or becomes part of, the
public domain otherwise than through the fault of a party to
which such information does not belong, (ii) such information was
known to such party prior to the execution of this Agreement, or
(iii) such information was revealed to such party by a third
person, and which the receiving party reasonably believes has
been obtained by such third person not in violation of any
existing confidentiality or non-disclosure agreement.
(d) Each party acknowledges and agrees that a breach of this Section
11 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 11, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section 11 shall survive the
termination of this Agreement.
12. Covenants. During the period of this Agreement and for as long as any
of the Trusts remains outstanding, each of the parties 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 parties 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, C&S 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 C&S piece or in response to questions of the media or others,
without Xxx Xxxxxx'x prior written consent.
13. Indemnification.
(a) By Xxx Xxxxxx. In the event any claim is brought by any third
party against C&S 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, C&S shall promptly notify Xxx Xxxxxx, and
Xxx Xxxxxx shall defend such claim at Xxx Xxxxxx'x expense and
under Xxx Xxxxxx'x control. Xxx Xxxxxx shall indemnify and hold
harmless C&S 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. C&S shall have the right, at their expense,
to participate in the defense of such claim through counsel of
their own choosing; provided, however, that Xxx Xxxxxx shall not
be required to pay any settlement amount that it has not approved
in advance. Notwithstanding the above, C&S shall not be entitled
to indemnification hereunder to the extent that the judgment,
liability, loss, cost or damage arising from a claim for which
indemnification is sought hereunder results directly or
indirectly from the negligence or willful misconduct of C&S, or C
& S actions or inactions in connection with its role as
Supervisor.
(b) By C&S. 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 C&S of their respective obligations hereunder, or
the failure of C&S 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 C&S and C&S shall defend such claim
at its expense and under its control. C&S 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, C&S 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 negligence or willful misconduct of Xxx
Xxxxxx, the Trusts, or Xxx Xxxxxx'x affiliates.
13. Survival. The indemnifications set forth in this Section 13 shall
survive the termination of this Agreement for any cause whatsoever.
14. C&S's Review of Registration Statement. C&S 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 C&S and the securities selection process.
For purposes of the foregoing, a draft of the Registration Statement
is attached hereto as Exhibit B
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
16. Waiver of Breach. The failure of any party to require the performance
of any term of this Agreement or the waiver of any party of any breach
hereunder shall not prevent a subsequent enforcement of such term nor
be deemed a waiver of any subsequent breach.
17. 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.
18. 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 C&S:
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx XxXxxxx
With copy to Office of General Counsel
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to Office of General Counsel
Notices shall be deemed given upon receipt via certified mail, overnight
courier, or hand delivery.
19. 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.
20. Conflicts. In the event that any provision in this Agreement conflicts
in any way with the trust agreement governing a particular Trust, the
provisions of trust agreement in respect thereof shall control.
21. Counterparts. This Agreement may be executed in two or more
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: ______________________________
XXXXX & STEERS CAPITAL MANAGEMENT INC.
By:_______________________________
Name: ____________________________
Title:______________________________
EXHIBIT A
The portfolio of each Trust will consist of securities issued by real
estate investment companies located throughout the world (as distinguished from
a portfolio consisting solely of United States real estate investment companies
which have elected to be taxed as a "real estate investment trust" under the
Internal Revenue Code of 1986, as amended) selected in accordance with such
general parameters and/or objectives as may be reasonably requested by Xxx
Xxxxxx for a particular Trust and acceptable to C&S.
EXHIBIT B
REGISTRATION STATEMENT
Attached
