LICENSE AGREEMENT
THIS AGREEMENT, made as of this 3rd day of May, 2004, by and among
Xxxxxxx X. Xxxxxxx ("Xxxxxxx"), an individual, Horizon Investment Services, LLC
("Horizon"), an Indiana limited liability company, and Xxx Xxxxxx Funds Inc.
("Xxx Xxxxxx"), a Delaware corporation.
W I T N E S S E T H:
WHEREAS, Xxxxxxx has written a book entitled "Winning With The Dow's
Losers" (the "Book") which describes certain investment concerns and strategies,
including the investment strategies set forth in Exhibit A attached hereto (the
"Strategies");
WHEREAS, all proprietary rights to the contents of the Book, together
with any or all of the text, graphics, logos, and other proprietary information
contained in the Book, the Strategies, and the names "Horizon Investment
Services" and "Xxxxxxx X. Xxxxxxx" (collectively, the "Property") are owned by
Xxxxxxx and Horizon;
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 in
accordance with one or more of the Strategies (the "Trusts");
WHEREAS, Xxx Xxxxxx, on behalf of the Trusts, desires to license the
Property for use in connection with the Trusts; and
WHEREAS, Xxxxxxx and Horizon are willing to license the Property to Xxx
Xxxxxx and the Trusts 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, Xxxxxxx and Horizon hereby grant to Xxx Xxxxxx and the Trusts an
Exclusive (as defined below) license to use and refer to the Property, with
prior approval from Horizon, in connection with the Trusts, provided, however,
that Xxx Xxxxxx and the Trusts may not republish the Book in its entirety
without any necessary consent from the publisher of the Book. The license
granted herein shall continue until the later to occur of the termination of
this Agreement or the termination date of the last existing Trust.
(b) Each of Xxxxxxx and Horizon 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 initial sale of the Trusts or subsequent
resales of the Trusts in the secondary market.
(c) Each of Xxxxxxx and Horizon represents and warrants that they own
all proprietary rights in and to the Property and have 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 each of
Xxxxxxx and Horizon have represented and warranted that the Property is the
exclusive property of Xxxxxxx and Horizon and that Xxxxxxx and Horizon have and
retain all proprietary rights there except to the extent otherwise provided
herein. Except as otherwise specifically provided herein, Xxxxxxx and Horizon
reserve all rights to the Property, and this Agreement shall not be construed to
transfer to Xxx Xxxxxx or the Trusts any ownership right to, or equity interest
in, any of the Property.
2. Fees. For the license granted herein, Xxx Xxxxxx, on behalf of the
Trusts, agrees that the Trusts shall pay Horizon the license fee set forth in
Exhibit B hereto.
3. Term. Subject to Section 7, 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 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 (each, a
"Renewal Term") unless a party terminates the Agreement by providing the other
parties a written notice to that effect ninety (90) days prior to the end of the
then-current term. The Initial Term and the Renewal Term are referred to herein
as the "Term".
4. Exclusivity and Right of First Refusal. (a) Each of Xxxxxxx and
Horizon covenants and agrees that the licenses granted herein shall be Exclusive
(as defined below) during the period from the Effective Date until the two year
anniversary thereof (the "Initial Exclusivity Period"). This period shall be
extended for additional one-year periods (each one-year period being an
"Extended Exclusivity Period") if at the end of the Initial Exclusivity Period
and, subsequent thereto, at the end of an Extended Exclusivity Period, either
(i) the asset balance of all outstanding Trusts equals or exceeds $250 million
or (ii) Xxx Xxxxxx pays Horizon an up front annual minimum license fee with
respect to each Extended Exclusivity Period equal to (A) $62,500 plus (B)
$62,500 minus two and one-half basis points (0.025%) of the asset balance of all
outstanding Trusts. "Exclusive" as used herein shall mean that neither Xxxxxxx
nor Horizon, or anyone acting on behalf of any of the aforesaid parties, shall
take any action to market or promote any UIT based on a Strategy other than the
Trusts or shall permit the use of any of the Property in connection with the
creation, marketing or promotion of any UIT other than the Trusts. Except as
provided in Section 4(b), nothing contained herein shall limit the right of
Xxxxxxx or Horizon 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.
(b) Xxxxxxx and Horizon covenant and agree that, during the Term of
this Agreement, neither Xxxxxxx nor Horizon, or anyone acting on their behalf,
shall be associated or involved with anyone in connection with the creation,
administration, management, marketing or sale of any unit investment trust
within the United States unless Xxxxxxx and Horizon shall have first promptly
delivered a bona fide written offer to Xxx Xxxxxx to act as sponsor, depositor,
adviser, promoter, underwriter or distributor of such an unit investment trust
and Xxx Xxxxxx shall have failed to provide a written acceptance of such offer
to Xxxxxxx or Horizon within 15 days after receipt of such offer.
5. Assignment. None of the parties hereto may assign its respective
rights and obligations under this Agreement without the prior written consent of
the others.
6. 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 Xxxxxxx or Horizon, and that the services performed
hereunder by Xxxxxxx and Horizon shall be as independent contractors and not as
employees or agents of Xxx Xxxxxx. Xxxxxxx and Horizon shall have no authority
whatsoever to bind Xxx Xxxxxx on any agreement or obligation and each of Xxxxxxx
and Horizon agree that he or it shall not hold itself out as an employee or
agent of Xxx Xxxxxx.
7. Termination. (a) Xxxxxxx and Horizon 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 Xxxxxxx or Horizon that is
not remedied within ten (10) business days after written notice thereof.
(c) Xxxxxxx and Horizon and Xxx Xxxxxx may terminate this Agreement at
any time upon the execution by all parties of a written agreement to that
effect.
Any termination under Section 7(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.
8. 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
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, in addition to all other remedies
available to such party at law or in equity.
(e) The covenants set forth in this Section shall survive the
termination of this Agreement.
9. 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, Xxxxxxx and Horizon 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 Xxxxxxx or Horizon piece or in response to
questions of the media or others, without Xxx Xxxxxx'x prior written consent,
except that Xxxxxxx and Horizon may state that Xxxxxxx or Horizon license 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.
10. Indemnification. (a) In the event any claim is brought by any third
party against Xxxxxxx or Horizon 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 applicable, to comply with any
law, rule or regulation relating to the Trusts, Xxxxxxx or Horizon, as
applicable, 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 Xxxxxxx or Horizon, as applicable, 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. Xxxxxxx and Horizon 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, Xxxxxxx and Horizon 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 gross negligence or willful misconduct of Xxxxxxx or
Horizon.
(b) 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 Xxxxxxx or Horizon of their
respective obligations hereunder, or the failure of Xxxxxxx or Horizon 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 Xxxxxxx or Horizon, as
applicable, and Xxxxxxx or Horizon shall defend such claim at its expense and
under its control. Xxxxxxx and Horizon 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, Xxxxxxx and Horizon
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 shall survive the
termination of this Agreement for any cause whatsoever.
11. Arbitration and Governing Law. (a) Any dispute, controversy or
difference which may arise among the parties hereto out of or in connection with
this Agreement or any agreement entered into among the parties pursuant to this
Agreement or any breach hereof or thereof shall, if possible, be settled by
mutual consultation in good faith between senior executive officers of the
parties having requisite decision making authority. Such mutual consultation
shall take place as soon as practicable after the receipt by one party of a
written notice from another party describing the dispute, controversy or
difference between them. Except as provided in Section 8, in the event that the
dispute is not resolved to the satisfaction of such parties by such consultation
within 90 days of the written notice given to one party pursuant to this Section
11(a), either party to the dispute may initiate the arbitration procedure set
forth in Section 11(b) of this Agreement. Such arbitration shall be the
exclusive method for resolving any such unresolved disputes.
(b) Subject to Section 11(a), all disputes arising in connection with
this Agreement that are not resolved as contemplated by Section 11(a), shall be
finally settled under the Rules of the American Arbitration Association (the
"Rules") by one or more arbitrators appointed in accordance with the said Rules.
Such arbitration shall be held in New York, New York in accordance with the
Rules.
(c) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York.
(d) An arbitration award rendered shall be final and binding upon the
parties hereto. The amount of the costs of any such arbitration and by whom they
shall be paid will be determined as part of the arbitration. Judgment upon such
arbitration award may be entered in any court having jurisdiction over the
parties or their assets.
12. 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.
13. 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.
14. 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 Xxxxxxx or Horizon:
Horizon Investment Services, LLC
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
If to Xxx Xxxxxx:
0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
With copy to :
Xxx Xxxxxx Investments 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.
15. 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.
16. 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 the trust agreement in respect thereof shall control.
17. 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____________________________________________________
XXXXXXX X. XXXXXXX
HORIZON INVESTMENT SERVICES, LLC
By
Name_____________________________________________________
Title____________________________________________________
EXHIBIT A
STRATEGIES
"Strategy" means:
o Purchase the 5 or 10 worst performing stocks from the Dow Xxxxx
Industrial Average over the preceding 12 month time period based
percent price change.
o Purchase the 5 or 10 stocks from the Dow Xxxxx Industrial Average
trading the farthest percent below their 200 day moving average price
at any given point in time.
o Sell short the 5 or 10 best performing stocks from the Dow Xxxxx
Industrial Average over the preceding 12 month time period based
percent price change.
o Sell short the 5 or 10 stocks from the Dow Xxxxx Industrial Average
trading the farthest above below their 200 day moving average price at
any given point in time.
The above strategies shall include purchases or sales of the 5 lowest
priced stocks from the 10 worst/best performers or the 10 farthest below/above
their 200 day moving average.
EXHIBIT B
LICENSE FEES
Xxx Xxxxxx shall pay license fees in accordance with the following:
During each Year (defined below) of the Term, the Xxx Xxxxxx will
provide to Horizon a written report (each, a "Quarterly Report"), within 10 days
after the end of each Quarter (defined below), which sets forth (i) the asset
balance for the Trusts at such Quarter-end, and (ii) a calculation of the
Rolling Average Asset Balance (defined below) at such Quarter-end. Within 10
days after the end of each Quarter during each Year of the Term, the Xxx Xxxxxx
will pay (each, a "Quarterly Payment"), to the Horizon, an amount equal to
one-quarter of the Basis Point Amount (defined below).
All amounts will be paid in cash or readily available funds and will be
non-refundable.
All amounts are stated in U.S. dollars (at the applicable exchange rate
prevailing at the time payment is due, as published in The Wall Street Journal).
Definitions:
"Basis Point Amount" means, at any time during a Year, an amount equal
to eight (8) basis points (.08) on the then Rolling Average Asset Balance.
"Quarter" means, with respect to any Year, the three-month period
commencing on the first day of such Year, and each succeeding three-month period
during such Year.
"Rolling Average Asset Balance" means, at any Quarter-end during a
Year, the average assets in the Trusts in the aggregate for the month then ended
together with all previous months in such Year, calculated by adding the
month-end asset balances for the Trusts for such months and dividing the result
by the number of such months.
"Year" means a twelve-month period commencing on the Effective Date or
on any anniversary of the Effective Date.
CONFIDENTIAL
LICENSE AGREEMENT
This License Agreement, dated as of May 3, 2004, is made by
and between Dow Xxxxx & Company, Inc. ("Dow Xxxxx"), having an office at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Horizon Investment Services, LLC
(the "Licensee"), having an office at 0000 Xxxxxxx Xxxxxx, Xxxxxxx, XX
00000-0000.
WHEREAS, Dow Xxxxx compiles, calculates and maintains the Dow
Xxxxx Industrial Average (the "Index"), and Dow Xxxxx owns rights in and to the
Index, the proprietary data contained therein, and the Dow Xxxxx Marks (defined
below) (such rights, including without limitation, copyright, trademark or
proprietary rights and trade secrets, being hereinafter collectively referred to
as the "Intellectual Property"); and
WHEREAS, Dow Xxxxx uses in commerce and has trade name,
trademark and/or service xxxx rights to the designations "Dow Xxxxx," "Dow Xxxxx
Industrial Average," "DJIA," "Dow Industrials," "The Dow", "The Dow 10" and "The
Dow 5" (such rights being hereinafter individually and collectively referred to
as the "Dow Xxxxx Marks"); and
WHEREAS, the Licensee wishes to use the Index and the related
Dow Xxxxx Marks, pursuant to the terms and conditions hereinafter set forth, in
connection with (i) the issuance, marketing and promotion of the Products (as
defined in Section 1(b)) and (ii) making disclosure about such Products under
applicable laws, rules and regulations in order to indicate that the Products
are based on the Index and that Dow Xxxxx is the source of the Index.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, it is agreed as follows:
1. Grant of License.
(a) Subject to the terms and conditions of this Agreement, Dow Xxxxx
hereby grants to the Licensee a non-transferable non-exclusive
license to use and refer to the Dow Xxxxx Marks in connection
with the issuance, management, sale, marketing and promotion of
the Products in order to indicate that the amounts payable under
the terms of the Products are calculated with reference to the
Strategy (as defined in Schedule A) and that Dow Xxxxx is the
source of the Index, and as may otherwise be required by
applicable laws, rules or regulations or under this Agreement.
(b) As used in this Agreement, "Products" means the products
described on Schedule A hereto that are issued and managed by the
Licensee or a Sublicensee (pursuant to a sublicense agreement
attached hereto as Exhibit I). Any changes to the terms and
conditions of the Products, as those terms are described in
Schedule A, will be subject to Dow Xxxxx' prior written consent.
(c) Except as otherwise expressly provided in Schedule A, nothing
contained in this Agreement constitutes a license to the Licensee
to use (i) any one or more of the indexes compiled, calculated
and maintained by Dow Xxxxx, including the Index (collectively,
the "indexes"), or (ii) any one or more of the indexes of which
any of the Indexes is comprised (if applicable) (the "Component
Indexes"), for any purpose.
(d) The Licensee acknowledges that the Index and the Dow Xxxxx Marks
are the exclusive property of Dow Xxxxx and that Dow Xxxxx has
and retains all Intellectual Property and other proprietary
rights therein. Except as otherwise specifically provided herein,
Dow Xxxxx reserves all rights to the Index and the Dow Xxxxx
Marks, and this Agreement shall not be construed to transfer to
the Licensee any ownership right to, or equity interest in, any
of the Index or the Dow Xxxxx Marks, or in any Intellectual
Property or other proprietary rights pertaining thereto.
(e) The Licensee acknowledges that the Index and its compilation and
composition, and any changes therein, are and will be in the
complete control and sole discretion of Dow Xxxxx.
(f) Dow Xxxxx' xxxxx of license to the Index to the Licensee shall be
Exclusive (as defined below) during the period from the
Commencement Date until the two year anniversary thereof (the
"Initial Exclusivity Period"). The Exclusivity Period shall be
extended for additional one-year period(s) (the "Extended
Exclusivity Period") if at the end of the Initial Exclusivity
Period and each Year of the Initial Term, either (i) the asset
balance of the Products equals or exceeds US$250 million or (ii)
Licensee pays Dow Xxxxx an up front annual minimum license fee
equal to $62,500 with respect to each upcoming one-year period.
"Exclusive" as used herein shall mean that Dow Xxxxx may not
grant a license to any third party a license to use the Index in
connection with the Strategy in the United States.
2. Term.
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 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 (each, a "Renewal Term") unless
either 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. (The Initial Term and the
Renewal Term, the "Term".) Dow Xxxxx shall have the right to
modify the license fees payable hereunder at the end of the
Initial Term and each Renewal Term by providing Licensee sixty
(60) days written notice of such modification. If Licensee
objects to such modification, Licensee shall have the right to
terminate the Agreement by providing Dow Xxxxx written notice of
termination within thirty (30) days of receipt of notification of
the modification.
3. License Fees.
(a) As consideration for the license granted herein, the Licensee
shall pay to Dow Xxxxx license fees ("License Fees") as set forth
on Schedule B hereto.
(b) If independently audited financial statements for the Products
are prepared, the Licensee shall provide Dow Xxxxx with such
audited financial statements promptly after receipt thereof by
the Licensee. Dow Xxxxx may use such audited financial statements
to confirm the accuracy of any one or more calculations of
License Fees. Dow Xxxxx shall not bear the cost of any such
audit. In addition, Dow Xxxxx shall have the right to audit on a
confidential basis the relevant books and records of the Licensee
to confirm the accuracy of any one or more calculations of
Licensee Fees. Dow Xxxxx shall bear its own costs of any such
audit unless it is determined that Dow Xxxxx has been underpaid
by 5% or more with respect to the payments being audited, in
which case Dow Xxxxx' costs of such audit shall be paid by the
Licensee.
4. Termination.
(a) If there is a material breach of this Agreement by either party
(such party, the "breaching party," and, the other party, the
"non-breaching party"), or if either party (such party, the
"harmed party") believes in good faith that material damage or
harm is occurring to its reputation or good will by reason of its
continued performance hereunder (other than pursuant to Section
4(d)), then the non-breaching party or the harmed party, as the
case may be, may terminate this Agreement, effective thirty (30)
days after written notice thereof to the other party (with
reasonable specificity as to the nature of the breach or the
condition causing such damage or harm, as the case may be, and
including a statement as to such party's intent to terminate),
unless the other party shall correct such breach or the condition
causing such damage or harm, as the case may be, within such
30-day period.
(b) The Licensee may terminate this Agreement upon ninety (90) days'
prior written notice to Dow Xxxxx (or such lesser period of time
as may be necessary pursuant to law, rule, regulation or court
order) if (i) any legislation or regulation is finally adopted or
any government interpretation is issued that prevents the
Licensee from issuing, marketing or promoting the Products; (ii)
any material litigation or regulatory proceeding regarding the
Products is commenced; or (iii) any of the events set forth in
Section 4(c)(i) or (iii) occurs.
(c) Dow Xxxxx may terminate this Agreement upon ninety (90) days'
prior written notice to the Licensee if (i) any legislation or
regulation is finally adopted or any government interpretation is
issued that in Dow Xxxxx' reasonable judgment materially impairs
Dow Xxxxx' ability to license and provide the Index or the Dow
Xxxxx Marks under this Agreement; (ii) any litigation or
proceeding is commenced which relates, directly or indirectly, to
Dow Xxxxx' licensing and providing the Index or the Dow Xxxxx
Marks under this Agreement, or any such litigation proceeding is
threatened and Dow Xxxxx reasonably believes that such litigation
or proceeding would be reasonably likely to have a material and
adverse effect on the Index or the Dow Xxxxx Marks or on Dow
Xxxxx' ability to perform under this Agreement; (iii) Dow Xxxxx
elects (other than pursuant to Section 4(d)) to cease compiling,
calculating and publishing values of the Index; or (iv) any of
the events set forth in Section 4(b)(i) through (ii) occurs.
(d) Notwithstanding anything to the contrary herein, Dow Xxxxx shall
have the right, in its sole discretion, to cease compiling,
calculating and publishing values of the Index at any time that
Dow Xxxxx determines that such Index no longer meets or will not
be capable of meeting the criteria established by Dow Xxxxx for
maintaining the Index, and thereupon to terminate this Agreement
(but Dow Xxxxx will use all reasonable efforts to provide the
Licensee with as much prior notice as is reasonably practicable
under the circumstances).
(e) Dow Xxxxx may terminate this Agreement, upon written notice to
the Licensee, if any securities exchange (i) ceases to provide
data to Dow Xxxxx necessary for providing the Index, (ii)
terminates Dow Xxxxx' right to receive data in the form of a
"feed" from such securities exchange, (iii) materially restricts
Dow Xxxxx' right to redistribute data received from such
securities exchange, or (iv) institutes charges (other than
nominal charges or charges which Dow Xxxxx deems to be reasonable
to be incurred in connection with providing the Index) for the
provision of data to Dow Xxxxx or the redistribution of data by
Dow Xxxxx.
(f) Dow Xxxxx may terminate this Agreement upon written prior notice
to the Licensee if no offering with respect to any Products has
commenced by 180 days after the date hereof.
5. Dow Xxxxx Obligations.
(a) Dow Xxxxx is not, and shall not be, obligated to engage in any
way or to any extent in any marketing or promotional activities
in connection with the Products or in making any representation
or statement to investors or prospective investors in connection
with the marketing or promotion of the Products by the Licensee.
(b) Dow Xxxxx agrees to provide reasonable support for the Licensee's
development and educational efforts with respect to the Products
by responding in a timely fashion to any reasonable request by
the Licensee for information regarding the Index.
(c) Dow Xxxxx shall use reasonable efforts to safeguard the
confidentiality of all impending changes in the components or
method of computation of the Index until such changes are
publicly disseminated, and shall require the same of any agent
with whom it has contracted for computation thereof. Dow Xxxxx
shall implement reasonable procedures so that only those persons
at Dow Xxxxx directly responsible for changes in the composition
or method of computation of the Index shall be granted access to
information respecting impending changes.
6. Trademark Filings; Recognition of Intellectual Property Rights;
Protection of Intellectual Property; Quality Control.
(a) Dow Xxxxx shall apply only for such trademark and trade name
registrations for the Dow Xxxxx Marks only in such jurisdictions,
if any, where Dow Xxxxx, in its sole discretion, considers such
filings appropriate. The Licensee shall reasonably cooperate with
Dow Xxxxx in the maintenance of such rights and registrations and
shall do such acts and execute such instruments as are reasonably
necessary or appropriate for such purpose. The Licensee shall use
the following notice when referring to the Index or any of the
Dow Xxxxx Marks in any informational materials to be used in
connection with the Products (including all prospectuses,
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 Dow Xxxxx,
the Index or any of the Dow Xxxxx Marks (collectively, the
"Informational Materials"):
"Dow Xxxxx Industrial AverageSM", "DJIASM", "Dow 30SM", "Dow
IndustrialsSM", "The Xxx XX", and "The Dow 10 SM" are
service marks of Dow Xxxxx & Company, Inc. and have been
licensed for use for certain purposes by [INSERT NAME OF
LICENSEE]. [INSERT NAME OF LICENSEE]'S [INSERT NAME OF
PRODUCT(S)], based on the Dow Xxxxx Industrial AverageSM,
are not sponsored, endorsed, sold or promoted by Dow Xxxxx,
and Dow Xxxxx makes no representation regarding the
advisability of investing in such product(s). or such
similar language as may be approved in advance in writing by
Dow Xxxxx.
(b) The Licensee agrees that the Dow Xxxxx Marks and all Intellectual
Property and other rights, registrations and entitlement thereto,
together with all applications, registrations and filings with
respect to any of the Dow Xxxxx Marks and any renewals and
extensions of any such applications, registration and filings,
are and shall remain the sole and exclusive property of Dow
Xxxxx. The Licensee acknowledges that each of the Dow Xxxxx Marks
is part of the business and goodwill of Dow Xxxxx and agrees that
it shall not contest the fact that the Licensee's rights in the
Dow Xxxxx Marks under this Agreement (i) are limited solely to
the use of the Dow Xxxxx Marks in connection with the issuance,
marketing, and/or promotion of the Products and disclosure about
the Products under applicable law as provided in Section 1(a),
and (ii) shall cease upon termination or expiration of this
Agreement, except as otherwise expressly provided herein. Upon
termination or expiration of this Agreement, the Licensee shall
have no right to use any Dow Xxxxx Marks and shall inform any
recipients of Informational Materials that in any way use or
refer to any Dow Xxxxx Marks that this Agreement has been
terminated or has expired and that Dow Xxxxx no longer provides
the Index to the Licensee. The Licensee recognizes the great
value of the reputation and goodwill associated with the Dow
Xxxxx Marks and acknowledges that such goodwill associated with
the Dow Xxxxx Marks belongs exclusively to Dow Xxxxx, and that
Dow Xxxxx is the owner of all right, title and interest in and to
the Dow Xxxxx Marks in connection with the Products. The Licensee
further acknowledges that all rights in any translations,
derivations or modifications in the Dow Xxxxx Marks which may be
created by or for the Licensee shall be and shall remain the
exclusive property of Dow Xxxxx and said property shall be and
shall remain a part of the Intellectual Property subject to the
provisions and conditions of this Agreement. The Licensee shall
never, either directly or indirectly, contest Dow Xxxxx'
exclusive ownership of any of the Intellectual Property. The
Licensee shall not, except with Dow Xxxxx' prior written consent,
use any Dow Xxxxx Xxxx, or the designation "Dow Xxxxx" or "Dow,"
or any other Dow Xxxxx xxxx, in conjunction with the Licensee's
own trademark(s) resulting in a composite xxxx, and, if the
Licensee obtains Dow Xxxxx' consent therefor, then such resulting
composite xxxx shall be part of the intellectual property of Dow
Xxxxx and included in the Dow Xxxxx Marks as defined herein, and
Dow Xxxxx shall be permitted to register such usage in all
jurisdictions, if any, as Dow Xxxxx deems to be reasonably
necessary or prudent, without opposition from the License. The
Licensee agrees to cooperate with Dow Xxxxx, at Dow Xxxxx'
expense, in the maintenance of such rights and registrations and
shall do such acts and execute such instruments as are reasonably
necessary or appropriate for such purpose.
(c) In the event that the Licensee learns of any infringement or
imitation of the Index and/or any Dow Xxxxx Xxxx, or of any use
by any person of a trademark similar to any of the Dow Xxxxx
Marks, it shall promptly notify Dow Xxxxx. Dow Xxxxx shall take
such action, if any, as it deems advisable for the protection of
rights in and to the Index and the Dow Xxxxx Marks and, if
requested to do so by Dow Xxxxx, the Licensee shall cooperate
with Dow Xxxxx in all respects, at Dow Xxxxx' expense, including,
without limitation, by being a plaintiff or co-plaintiff and,
upon Dow Xxxxx' reasonable request, by causing its officers to
execute appropriate pleadings and other necessary documents. In
no event, however, shall Dow Xxxxx be required to take any action
it deems inadvisable. The Licensee shall have no right to take
any action which would materially affect the Index and/or any of
the Dow Xxxxx Marks without Dow Xxxxx' prior written approval.
(d) The Licensee shall use all reasonable efforts to protect the
goodwill and reputation of Dow Xxxxx, the Index and the Dow Xxxxx
Marks in connection with its use of the Index and any of the Dow
Xxxxx Marks under this Agreement. The Licensee shall submit to
Dow Xxxxx, for Dow Xxxxx' review and approval, and the Licensee
shall not use until receiving Dow Xxxxx' approval thereof in
writing, all Informational Materials that in any way use or refer
to Dow Xxxxx, the Index or any of the Dow Xxxxx Marks. Dow Xxxxx'
approval shall be required with respect to the use of and
description of Dow Xxxxx, the Index or any of the Dow Xxxxx
Marks. Dow Xxxxx shall notify the Licensee of its approval or
disapproval of any Informational Materials within 72 hours
(excluding any day which is a Saturday or Sunday or a day on
which The New York Stock Exchange is closed) following receipt
thereof from the Licensee. Once Informational Materials have been
approved by Dow Xxxxx, subsequent Informational Materials which
do not alter the use or description of Dow Xxxxx, the Index or
such Dow Xxxxx Marks, as the case may be, need not be submitted
for review and approval by Dow Xxxxx.
(e) Whenever the Dow Xxxxx Marks are used in any Informational
Material in connection with any of the Products, the name of the
Licensee shall appear in close proximity to the Dow Xxxxx Marks
so that the identity of the Licensee, and its status as an
authorized licensee of such Dow Xxxxx Marks, is clear and
obvious.
7. Proprietary Rights.
(a) The Licensee acknowledges that the Index is selected, compiled,
coordinated, arranged and prepared by Dow Xxxxx through the
application of methods and standards of judgment used and
developed through the expenditure of considerable work, time and
money by Dow Xxxxx. The Licensee also acknowledges that the Index
and the Dow Xxxxx Marks are valuable assets of Dow Xxxxx and
agrees that it will take reasonable measures to prevent any
unauthorized use of the information provided to it concerning the
selection, compilation, coordination, arrangement and preparation
of the Index.
(b) Each party shall treat as confidential and shall not disclose or
transmit to any third party (i) any documentation or other
materials that are marked as "Confidential" by the providing
party and (ii) the terms of this Agreement (collectively,
"Confidential Information"). Confidential Information as
described in clause (i) of the preceding sentence shall not
include (A) 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 (B)
any information that is independently developed by the receiving
party without use of or reference to information from the
providing party.
(c) 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 (i)
approved in writing by the providing party for disclosure or (ii)
required by law, regulatory agency or court order to be disclosed
by the receiving party, provided, if permitted by law, that prior
written notice of such required disclosure is given to the
providing party and provided further that the receiving party
shall cooperate with the providing party to limit the extent of
such disclosure. The provisions of Sections 7(b) and (c) shall
survive termination or expiration 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.
8. Warranties; Disclaimers.
(a) 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 execution and delivery of this Agreement and its
performance hereunder will not violate any agreement applicable
to it or violate any applicable law or regulation. The Licensee
represents and warrants to Dow Xxxxx that the issuance,
marketing, promotion, sale and resale of the Products by the
Licensee will not violate any agreement applicable to the
Licensee or violate any applicable laws, rules or regulations,
including without limitation, securities, commodities and banking
laws.
(b) The Licensee represents, warrants and covenants to Dow Xxxxx that
the Products shall at all times comply with the descriptions set
forth on Schedule A.
(c) The Licensee shall include the statement contained in Exhibit II
hereto in any filing with a governmental agency, each prospectus
and registration statement, and in any contracts relating to the
Products (and upon request shall furnish copies thereof to Dow
Xxxxx), and the Licensee expressly agrees to be bound by the
terms of the statement contained in Exhibit II hereto (which
terms are expressly incorporated herein by reference and made a
part hereof). Any changes in the statement contained in Exhibit
II hereto must be approved in advance in writing by an authorized
officer of Dow Xxxxx.
(d) Notwithstanding any provision of this Agreement, and without
limiting the disclaimers set forth in this Agreement (including
in Exhibit II hereto), in no event shall the cumulative liability
of Dow Xxxxx to the Licensee and its affiliates under or relating
to this Agreement at any time exceed the aggregate amount of
License Fees received by Dow Xxxxx pursuant to this Agreement.
9. Indemnification.
(a) The Licensee shall indemnify and hold harmless Dow Xxxxx and its
affiliates, and their respective officers, directors, members,
employees and agents, against any and all judgments, damages,
liabilities, costs and losses of any kind (including reasonable
attorneys' and experts' fees) (collectively, "Losses") as a
result of any claim, action or proceeding that arises out of or
relates to (i) this Agreement (except to the extent such Losses
arise out of or relate to a breach by Dow Xxxxx of its
representations and warranties under this Agreement) or (ii) the
Products, provided, however, that Dow Xxxxx must promptly notify
the Licensee in writing of any such claim, action or proceeding
(but the failure to do so shall not relieve the Licensee of any
liability hereunder except to the extent the Licensee has been
materially prejudiced therefrom). The Licensee may elect, by
written notice to Dow Xxxxx within ten (10) days after receiving
notice of such claim, action or proceeding from Dow Xxxxx, to
assume the defense thereof with counsel reasonably acceptable to
Dow Xxxxx. If the Licensee does not so elect to assume such
defense or disputes its indemnity obligation with respect to such
claim, action or proceeding, or if Dow Xxxxx reasonably believes
that there are conflicts of interest between Dow Xxxxx and the
Licensee or that additional defenses are available to Dow Xxxxx
with respect to such defense, then Dow Xxxxx shall retain its own
counsel to defend such claim, action or proceeding, at the
Licensee's expense. The Licensee shall periodically reimburse Dow
Xxxxx for its expenses incurred under this Section 9. Dow Xxxxx
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 and with respect to which the Licensee has
elected to assume the defense; provided, however, that Dow Xxxxx
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 the Licensee unless Dow Xxxxx waives its
right to indemnity hereunder. The Licensee, in the defense of any
such claim, action or proceeding, except with the written consent
of Dow Xxxxx, shall not consent to entry of any judgment or enter
into any settlement which (i) does not include, as an
unconditional term, the grant by the claimant to Dow Xxxxx of a
release of all liabilities in respect of such claims or (ii)
otherwise adversely affects the rights of Dow Xxxxx.
(b) The indemnification provisions set forth herein are solely for
the benefit of Dow Xxxxx and are not intended to, and do not,
create any rights or causes of actions on behalf of any third
party.
10. Suspension of Performance.
Notwithstanding anything herein to the contrary, neither Dow
Xxxxx nor the Licensee shall bear responsibility or liability for
any Losses arising out of any delay in or interruptions of
performance of their respective obligations under this Agreement
due to any act of God, act of governmental authority, or act of
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,
other work stoppage, or slow-down), severe or adverse weather
conditions, power failure, communications line or other
technological failure, or other similar cause beyond the
reasonable control of the party so affected; provided, however,
that this Section 10 shall not affect the Licensee's obligations
under Section 9(a) in the case of any claim, action or proceeding
brought by a third party.
11. Injunctive Relief.
In the event of a material breach by one party ("Breaching
Party") of provisions of this Agreement relating to the
Confidential Information of the other party ("Non-breaching
Party"), the Breaching Party acknowledges and agrees that damages
would be an inadequate remedy and that the Non-breaching Party
shall be entitled to preliminary and permanent injunctive relief
to preserve such confidentiality or limit improper disclosure of
such Confidential Information, but nothing herein shall preclude
the Non-breaching Party from pursuing any other action or remedy
for any breach or threatened breach of this Agreement. All
remedies under this Section 11 shall be cumulative.
12. Other Matters.
(a) This Agreement is solely and exclusively between the parties
hereto and, except to the extent otherwise expressly provided
herein, shall not be assigned or transferred, nor shall any duty
hereunder be delegated, by either party, without the prior
written consent of the other party, and any attempt to so assign
or transfer this Agreement or delegate any duty hereunder without
such written consent shall be null and void. This Agreement shall
be valid and binding on the parties hereto and their successors
and permitted assigns.
(b) This Agreement, including the Schedules and Exhibits hereto
(which are hereby expressly incorporated into and made a part of
this Agreement), constitutes the entire agreement of the parties
hereto with respect to its subject matter. This Agreement
supersedes any and 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 waiver, modification or amendment of any of the terms and
conditions hereof shall be valid or binding unless set forth in a
written instrument signed by duly authorized officers of both
parties. The delay or failure by any party to insist, in any one
or more instances, upon strict performance of any of the terms or
conditions of this Agreement or to exercise any right or
privilege herein conferred shall not be construed as a waiver of
any such term, condition, right or privilege, but the same shall
continue in full force and effect.
(d) 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.
(e) All notices and other communications under this Agreement shall
be (i) in writing, (ii) delivered by hand (with written
confirmation of receipt), by registered or certified mail (return
receipt requested), or by facsimile transmission (with
confirmation of receipt), to the address or facsimile number set
forth below or to such other address or facsimile number as
either party shall specify by a written notice to the other, and
(iii) deemed given upon receipt.
If to Dow Xxxxx: Dow Xxxxx & Company, Inc.
---------------
U.S. Route 0 Xxxxx xx Xxxxx Xxxx
Xxxxxxxx Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Managing Director, Dow Xxxxx Indexes
Fax No: 609/000-0000
With a copy to: Dow Xxxxx & Company, Inc.
--------------
0000 X. Xxxxx 0
Xxxxx Xxxxxxxxx, XX 00000
Attn: Legal Department
Fax No: 000 000 0000
If to the Licensee: Horizon Investment Services, LLC
------------------
0000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx Xxxxxxx, CEO
(f) 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. Each party agrees that any legal action, proceeding,
controversy or claim between the parties arising out of or
relating to this Agreement may be brought and prosecuted 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 by execution of this Agreement
each party hereto submits to the exclusive jurisdiction of such
court and waives any objection it might have based upon improper
venue or inconvenient forum. Each party hereto hereby waives any
right it may have in the future to a jury trial in connection
with any legal action, proceeding controversy or claim between
the parties arising out of or relating to this Agreement.
(g) This Agreement (and any related arrangements between the parties
hereto) is solely and exclusively for the benefit of the parties
hereto and their respective successors, and nothing in this
Agreement (and any related arrangements between the parties
hereto), express or implied, is intended to or shall confer on
any other person or entity (including, without limitation, any
sublicensee of the Licensee hereunder or any purchaser of any
Products issued by the Licensee), any rights, benefits or
remedies of any nature whatsoever under or by reason of this
Agreement (or any such related arrangements between the parties
hereto).
(h) Sections 6(b), 7(b) and (c) (as provided therein), 8, 9, 11 and
12(f), and this Section 12(h), shall survive the expiration or
termination of this Agreement.
(i) The parties hereto are independent contractors. Nothing herein
shall be construed to place the parties in the relationship of
partners or joint venturers, and neither party shall acquire any
power, other than as specifically and expressly provided in this
Agreement, to bind the other in any manner whatsoever with
respect to third parties.
(j) All references herein to "reasonable efforts" shall include
taking into account all relevant commercial and regulatory
factors. All references herein to "regulations" or "regulatory
proceedings" shall include regulations or proceedings by
self-regulatory organizations such as securities exchanges.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed as of the date first set forth above.
DOW XXXXX & COMPANY, INC.
By:
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President, Dow Xxxxx Indexes
HORIZON INVESTMENT SERVICES, LLC
By:
--------------------------------------------------
Name:
Title:
INDEX OF ATTACHMENTS
SCHEDULES:
Schedule A Products Description
Schedule B License Fees
EXHIBITS:
Exhibit I Sublicense Agreement
Exhibit II Disclaimer Language
SCHEDULE A
PRODUCTS DESCRIPTION
An investment [?--read this in connection with (a)(ii)- a "fund that is ...
publicly-offered debt obligations"] that is either (a) (i) a unit investment
trust registered under the Investment Company Act of 1940[not defined] or (ii)
publicly-offered debt obligations, (b) whose investment objective is based on
the Strategy and (c) not traded on an exchange (electronically or otherwise).
The term "Strategy" shall mean the investment strategy pursuant to which funds
are invested as set forth below. The below strategy is commonly referred to as
the "Underdogs of The DowSM" or Worst to First strategy.
Strategy means that Licensee will:
1.) Purchase the 5 or 10 worst performing stocks from the [Not defined] Dow
Xxxxx Industrial Average over the preceding 12 month time period based percent
price change. 2.) Purchase the 5 or 10 stocks from the Dow Xxxxx Industrial
Average trading the farthest percent below their 200 day moving average price at
any given point in time.
3.) Sell short the 5 or 10 best performing stocks from the Dow Xxxxx Industrial
Average over the preceding 12 month time period based percent price change. 4.)
Sell short the 5 or 10 stocks from the Dow Xxxxx Industrial Average trading the
farthest above below their 200 day moving average price at any given point in
time.
5.) This should also apply to choosing the 5 lowest priced stocks from the 10
worst/best performers or the 10 farthest below/above their 200 day moving
average.
The name of the Products shall be subject to Dow Xxxxx' prior written approval.
EXHIBIT I
SUBLICENSE AGREEMENT
This Sublicense Agreement (the "Sublicense Agreement"), dated
as of May 3, 2004, is made by and between Xxx Xxxxxx Funds Inc., on behalf of
itself and certain unit investment trusts, (the "Sublicensee"), Dow Xxxxx &
Company, Inc. ("Licensor"), and Horizon Investment Services, LLC
("Sublicensor").
W I T N E S S E T H :
WHEREAS, pursuant to that certain License Agreement, dated as
of May 3, 2004, by and between Licensor and Sublicensor ("License Agreement"),
Licensor has granted Sublicensor a license to use and sublicense certain
Intellectual Property (as defined in the License Agreement) in connection with
the issuance, management, sale, marketing and/or promotion of certain Products
(as defined in the License Agreement); and
WHEREAS, Sublicensee wishes to issue, manage, sell, market
and/or promote the Products and to use and refer to the Intellectual Property in
connection therewith.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. License. Sublicensor hereby grants to Sublicensee a
non-exclusive and non-transferable sublicense to use the Intellectual Property
in connection with the issuance, management distribution, marketing and/or
promotion of the Products (as modified by Appendix A hereto, if applicable). All
capitalized terms used herein shall have the meanings assigned to them in the
License Agreement unless otherwise defined herein.
2. The Sublicensee acknowledges that it has received and read
a copy of the License Agreement (excluding Schedule B). Except as described
herein, Sublicensee agrees to obligate itself to all the provisions thereof as
if Sublicensee were the Licensee thereunder (including, without limitation, the
indemnification obligations in Section 9 insofar as such obligations arise out
of or relate to the Products to be sold, issued, marketed and/or promoted by the
Sublicensee), other than the obligation to pay the License Fees imposed by
Section 3 of the License Agreement, which shall be paid by Sublicensor as
Licensee thereunder.
3. Sublicense Fees.
(a) As consideration for the license granted herein,
Sublicensee shall pay to Sublicensor license fees
("Sublicense Fees") as set forth on Schedule 1 hereto.
(b) If independently audited financial statements for the
Products are prepared, the Sublicensee shall provide
Sublicensor with such audited financial statements
promptly after receipt thereof by the Sublicensee.
Sublicensor may use such audited financial statements
to confirm the accuracy of any one or more calculations
of Sublicense Fees. Sublicensor shall not bear the cost
of any such audit. In addition, Sublicensor shall have
the right to audit on a confidential basis the relevant
books and records of the Sublicensee to confirm the
accuracy of any one or more calculations of Sublicense
Fees. Sublicensor shall bear its own costs of any such
audit unless it is determined that Sublicensor has been
underpaid by 5% or more with respect to the payments
being audited, in which case Sublicensor's costs of
such audit shall be paid by the Sublicensee.
4. Sublicensee agrees that its obligations under the License
Agreement pursuant to Section 2 of this Sublicense Agreement are as principal
and shall be unaffected by any defense or claim that Sublicensor may have
against Licensor.
5. All notices and other communications under this Sublicense
Agreement shall be (i) in writing, (ii) delivered by hand (with written
confirmation of receipt), by registered or certified mail (return receipt
requested), or by facsimile transmission (with confirmation of receipt), to the
address or facsimile number set forth below or to such other address or
facsimile number as either party shall specify by a written notice to the other,
and (iii) deemed given upon receipt.
If to Licensor: Dow Xxxxx & Company, Inc.
--------------
U.S. Route 0 Xxxxx xx Xxxxx Xxxx
Xxxxxxxx Xxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Managing Director, Dow Xxxxx Indexes
Fax No: 609/000-0000
With a copy to: Dow Xxxxx & Company, Inc.
--------------
0000 X. Xxxxx 0
Xxxxx Xxxxxxxxx, XX 00000
Attn: Legal Department
Fax No: 000 000 0000
If to the Sublicensor: Horizon Investment Services, LLC
---------------------
0000 Xxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx 00000-0000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Xxxxx Xxxxxxx, CEO
If to Sublicensee: Xxx Xxxxxx Funds Inc.
-----------------
0 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxx
Fax No: 630/000-0000
With a copy to: Xxx Xxxxxx Investments Inc.
--------------
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Office of the General Counsel
Fax No: 212/000-0000
5. This Sublicense Agreement shall be construed 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.
6. This Sublicense Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Sublicense Agreement as of the date first set forth above.
SUBLICENSEE
Xxx Xxxxxx Funds Inc.
By:_______________________________
Title:______________________________
SUBLICENSOR
Horizon Investment Services, LLC
By:_______________________________
Title:______________________________
LICENSOR
Dow Xxxxx & Coompany, Inc.
By:_______________________________
Title:______________________________
SCHEDULE 1
TO
SUBLICENSE AGREEMENT
SUBLICENSE FEES
Sublicensee shall pay license fees in accordance with the following:
During each Year (defined below) of the Term, the Sublicensee will provide
to Sublicensor a written report (each, a "Quarterly Report"), within 10
days after the end of each Quarter (defined below), which sets forth (i)
the asset balance for each Product at such Quarter-end, and (ii) a
calculation of the Rolling Average Asset Balance (defined below) at such
Quarter-end. Within 10 days after the end of each Quarter during each Year
of the Term, the Sublicensee will pay (each, a "Quarterly Payment"), to the
Sublicensor, an amount equal to one-quarter of the Basis Point Amount
(defined below).
o All amounts will be paid in cash or readily available funds and
will be non-refundable.
o All amounts are stated in U.S. dollars (at the applicable
exchange rate prevailing at the time payment is due, as published
in The Wall Street Journal).
o The terms hereof shall be deemed "Confidential Information" for
purposes of Section 7(b) of the License Agreement.
o Definitions:
"Basis Point Amount" means, at any time during a Year, an amount
equal to two (2) basis points (.02) on the then Rolling Average
Asset Balance.
"Quarter" means, with respect to any Year, the three-month period
commencing on the first day of such Year, and each succeeding
three-month period during such Year.
"Rolling Average Asset Balance" means, at any Quarter-end during
a Year, the average assets in the Products in the aggregate for
the month then ended together with all previous months in such
Year, calculated by adding the month-end asset balances for the
Products for such months and dividing the result by the number of
such months.
"Year" means a twelve-month period commencing on the Effective
Date or on any anniversary of the Effective Date.
EXHIBIT II
The [Products] are not sponsored, endorsed, sold or promoted by Dow
Xxxxx. Dow Xxxxx makes no representation or warranty, express or implied, to the
owners of the [Product(s)] or any member of the public regarding the
advisability of investing in securities generally or in the [Product(s)]
particularly. Dow Xxxxx' only relationship to the Licensee is the licensing of
certain trademarks, trade names and service marks of Dow Xxxxx and of the Dow
Xxxxx Industrial Average,SM which is determined, composed and calculated by Dow
Xxxxx without regard to [the Licensee] or the [Product(s)]. Dow Xxxxx has no
obligation to take the needs of [the Licensee] or the owners of the [Product(s)]
into consideration in determining, composing or calculating the Dow Xxxxx
Industrial AverageSM. Dow Xxxxx is not responsible for and has not participated
in the determination of the timing of, prices at, or quantities of the
[Product(s)] to be issued or in the determination or calculation of the equation
by which the [Product(s)] are to be converted into cash. Dow Xxxxx has no
obligation or liability in connection with the administration, marketing or
trading of the [Product(s)].
DOW XXXXX DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF
THE DOW XXXXX INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN AND DOW XXXXX
SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW
XXXXX MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY
[THE LICENSEE], OWNERS OF THE [PRODUCT(S)], OR ANY OTHER PERSON OR ENTITY FROM
THE USE OF THE DOW XXXXX INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN. DOW
XXXXX 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 DOW XXXXX INDUSTRIAL AVERAGESM OR ANY DATA INCLUDED THEREIN.
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW XXXXX HAVE ANY
LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL
DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE NO
THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN DOW XXXXX
AND [THE LICENSEE].
Nasdaq-100 Index License
Version: 7.04
AGREEMENT FOR NASDAQ-100 INDEX(R) RELATED DERIVATIVE PRODUCTS
This agreement ("AGREEMENT"), is made by and between The Nasdaq Stock
Market, Inc. ("NASDAQ"), a Delaware Corporation (Nasdaq and its affiliates are
collectively referred to as the "CORPORATIONS") whose principal offices are
located at Xxx Xxxxxxx Xxxxx, 000 Xxxxxxxx, Xxx Xxxx, XX 00000 and Xxx Xxxxxx
Funds Inc. ("LICENSEE") whose principal offices are located at 0000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, XX 00000. Nasdaq and Licensee are collectively referred
to as the "PARTIES" and individually as a "PARTY".
WHEREAS, Nasdaq possesses certain rights to Nasdaq(R), Nasdaq-100(R),
and Nasdaq-100 Index(R) as trade names, trademarks or service marks ("MARKS");
WHEREAS, Nasdaq determines the components of the Nasdaq-100 Index(R)
and the proprietary data contained therein ("INDEX") and such efforts involve
the considerable expenditure of time, effort, judgment and money; and
WHEREAS, Nasdaq calculates, maintains, and disseminates the Index; and
WHEREAS, Licensee desires to use and Nasdaq desires to license the
right to use the Index as a benchmark, component of a pricing or settlement
mechanism for the fund, financial instrument, derivative or other products noted
in Attachment II ("DERIVATIVE PRODUCTS") to be issued, listed and/or traded by
Licensee or its authorized affiliates and use the Marks solely in materials
relating or referring to the Derivative Products; and
WHEREAS, Licensee is legally authorized to issue shares of the fund, or
issue, enter into, write, sell, redeem, purchase and/or renew ("ISSUE",
"ISSUING", or "ISSUANCE") such Derivative Products, and each Derivative Product
will be Issued as legally required under applicable law;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, Licensee and Nasdaq, intending to be
legally bound, agree as follows:
SECTION 1. TERM AND LIFE OF AGREEMENT.
1.1 The term ("TERM") of this Agreement for a particular Derivative
Product is that stated for that Derivative Product in Attachment II. In the
absence of a statement there, the Term for that Derivative Product is the period
from the Effective Date stated in Attachment II (if none is stated, the date the
Agreement is signed by Nasdaq) until the end of one year therefrom; thereafter,
the Term of this Agreement shall renew for subsequent one year terms, unless
either Party gives Notice to the other at least ninety (90) days before the end
of the present Term, or otherwise terminates the Term of this Agreement as
provided herein.
1.2 The life ("LIFE") of this Agreement for a particular Derivative
Product is that stated for that Derivative Product in Attachment II. In the
absence of a statement there, the Life for that Derivative Product is until one
year after the date of the expiration or cancellation of the last of that
Derivative Product Issued under this Agreement.
SECTION 2. SCOPE OF LICENSE. Nasdaq hereby grants Licensee a non-exclusive,
non-transferable and non-sub-licensable (except as provided herein) license to
use the Index as a component of a pricing or settlement mechanism for Derivative
Products that are Issued by Licensee during the Term of this Agreement. Nasdaq
further grants Licensee the right to use the Marks solely in materials referring
or relating to the Derivative Products during the Life of this Agreement. No
license is granted to use the Index or Marks for any other use, including as
part of a news service or for collateral products, without the Consent of
Nasdaq.
SECTION 3. FEES. Licensee shall pay Nasdaq the fees specified in Attachment II
("FEES"), in immediately available United States funds. Where there are Annual
Fees, such are due as of the effective date of this Agreement, or by the
beginning date of any subsequent Term. Fees established as due by a particular
date, are due by that date. All other Fees are due within thirty (30) days of
the date established for the production of the report or date of the invoice
upon which the Fee is based. Any amount not paid within thirty (30) days after
its due date is subject to interest at the rate of one and one-half percent (1
1/2 %) per month (or the highest rate permitted by law, whichever is lower)
until paid, plus costs of collection, including reasonable in-house and outside
attorneys' fees. Licensee shall also assume full and complete responsibility for
the payment of any taxes, charges or assessments imposed on Licensee, any
sub-licensee, or the Corporations by any foreign or domestic national, state,
provincial, local or other government bodies, or subdivisions thereof, and any
penalties or interest, (other than personal property or income taxes imposed on
Nasdaq) relating to this Agreement. In addition, if Licensee is required by
applicable law to deduct or withhold any such tax, charge or assessment from the
amounts due Nasdaq, then such amounts due shall be increased so that the net
amount actually received by Nasdaq after the deduction or withholding of any
such tax, charge or assessment, will equal one hundred percent (100%) of the
charges specified.
SECTION 4. AUDIT RIGHTS. During the Life of this Agreement, Nasdaq shall have
the right, with reasonable Notice to Licensee, during normal business hours, to
audit on a Confidential basis, any relevant books and records of Licensee or its
sub-licensees to ensure that the type and amount of Fees calculated or stated to
be payable to Nasdaq are complete and accurate. Licensee shall bear the costs of
such audit (including reasonable in-house and outside accountant and attorneys'
fees, if incurred) if Nasdaq determines that Licensee (together with its
sub-licensees) has not paid, calculated, and/or reported Fees of more than five
percent (5%) of that due Nasdaq under this Agreement.
SECTION 5. REVIEW OF MATERIALS.
5.1 Licensee shall submit to Nasdaq for review a copy of any material
submitted to any regulatory body or governmental agency, which is required in
order to obtain approval for the Issuance or resale of any Derivative Product.
To the extent practicable, such materials or a copy of the then best draft shall
be given to Nasdaq at least three (3) business days before their submittal to
the body or agency (but in any event, a copy of the final document shall be sent
by Notice to Nasdaq no later than three (3) business days after submittal to the
agency or body).
5.2 Licensee shall give Nasdaq a copy, within three (3) business days
of receipt, of any notice, correspondence, process, or other material received
from any regulatory body, governmental agency, or any court, during or after the
approval process which indicates that any Derivative Product is or might be in
violation of, or otherwise not subject to approval because of, any law, or any
rule, regulation, or order of any applicable body or agency.
5.3 For Derivative Product offerings which may be sold to the public,
Licensee shall provide Nasdaq with a copy of any informational or promotional
materials referring or relating to such offering, including, any prospectus,
offering memorandum, registration statement, circular, advertisement, or
brochure at least three (3) business days prior to its initial dissemination to
third parties. Licensee need not resupply a copy of any material that is
substantially like material previously submitted to Nasdaq and is identical as
it describes the Corporations or their operations, the markets operated by the
Corporations, the Index or the Marks, or the authorization, review, or
endorsement of the Corporations of the Derivative Product. For all other
Derivative Products, Licensee shall provide a description of such product to
Nasdaq within 3 business days of the initial Issue of such product, and upon
reasonable request, provide Nasdaq, on a Confidential basis, a copy of any
materials or agreements related to such product.
5.4 If Nasdaq reasonably objects by Notice or fax transmission to
Licensee to any material as it describes the Corporations or their operations,
the markets operated by the Corporations, the Index or the Marks, or the
authorization, review, or endorsement of the Corporations of the Derivative
Product, Licensee shall alter or withdraw such material to Nasdaq's satisfaction
within thirty (30) days of receipt of Nasdaq objection. If Licensee refuses to
so alter or withdraw, Nasdaq may terminate the Term of this License with regard
to that Derivative Product, upon thirty (30) days Notice to Licensee, with an
opportunity to cure within that period.
SECTION 6. PROTECTION OF MARKS. Nasdaq will use reasonable efforts to maintain
and protect the value of its Index and Marks. However, nothing shall obligate
Nasdaq to undertake an action or settlement, or refrain from an action or
settlement with respect to any particular potential, threatened, or actual
infringement of its Index or Marks. Licensee shall cooperate with Nasdaq in
maintenance, registrations, and policing of Nasdaq's rights in the Index and the
Marks. Such cooperation is not a waiver of nor shall it require violation of its
attorney/client, work product, or other privilege.
SECTION 7. CALCULATION OF INDEX.
7.1 Licensee agrees that the Index is a product of the selection,
coordination, arrangement, and editing of Nasdaq and that such efforts involve
the considerable expenditure by Nasdaq of time, effort, and judgment. As between
the Parties, Licensee recognizes that Nasdaq is the rightful licensor of the
Index and the Marks. No license is granted to Licensee to calculate the Index.
While Nasdaq will use reasonable efforts based on sources deemed reliable in
calculating the Index, NASDAQ DOES NOT GUARANTEE THE ACCURACY OR COMPLETENESS OF
THE INDEX OR OF THE DATA USED TO CALCULATE THE INDEX OR DETERMINE THE INDEX
COMPONENTS, OR THE UNINTERRUPTED OR UN-DELAYED CALCULATION OR DISSEMINATION OF
THE INDEX. NASDAQ DOES NOT GUARANTEE THAT THE INDEX ACCURATELY REFLECTS PAST,
PRESENT, OR FUTURE MARKET PERFORMANCE. NASDAQ IS NOT RESPONSIBLE FOR ANY
MANIPULATION OR ATTEMPTED MANIPULATION OF THE INDEX BY MEMBERS OF THE NASD.
Nasdaq is free to pick and alter the components and method of calculation of the
Index without Consent of Licensee.
7.2 Nasdaq shall give Licensee at least ninety (90) days Notice of the
cessation of public calculation or dissemination of the Index. However, Nasdaq
shall either continue to provide Licensee with a calculation of the Index for
the Life of this Agreement, or, on a Confidential basis, provide Licensee with
the then applicable method of calculation of the Index. Licensee may terminate
the Term of this Agreement on the date Noticed by Nasdaq for the cessation or
dissemination of the Index, and Nasdaq shall refund Licensee a portion of the
pre-paid Fees for that Term calculated according to Section 11.
SECTION 8. MARKING OF LICENSEE'S USE.
8.1 In any prospectus, offering memorandum, contract, or in some other
conspicuous written manner, for each Derivative Product to each third party
involved in such Issuance, Licensee shall insure that substantially the
following language appears (in conspicuous type, such as at least eleven (11)
point type and the second paragraph in bold) so as to be enforceable under
applicable local law(s):
The Product(s) is not sponsored, endorsed, sold or promoted by The
Nasdaq Stock Market, Inc. or its affiliates) (Nasdaq, with its
affiliates, are referred to as the "Corporations"). The Corporations
have not passed on the legality or suitability of, or the accuracy or
adequacy of descriptions and disclosures relating to, the Product(s).
The Corporations make no representation or warranty, express or implied
to the owners of the Product(s) or any member of the public regarding
the advisability of investing in securities generally or in the
Product(s) particularly, or the ability of the Nasdaq-100 Index(R) to
track general stock market performance. The Corporations' only
relationship to Xxx Xxxxxx Funds Inc. ("Licensee") is in the licensing
of the Nasdaq(R), Nasdaq-100(R), and Nasdaq-100 Index(R) trademarks,
and certain trade names of the Corporations and the use of the
Nasdaq-100 Index(R) which is determined, composed and calculated by
Nasdaq without regard to Licensee or the Product(s). Nasdaq has no
obligation to take the needs of the Licensee or the owners of the
Product(s) into consideration in determining, composing or calculating
the Nasdaq-100 Index(R). The Corporations are not responsible for and
have not participated in the determination of the timing of, prices at,
or quantities of the Product(s) to be issued or in the determination or
calculation of the equation by which the Product(s) is to be converted
into cash. The Corporations have no liability in connection with the
administration, marketing or trading of the Product(s).
THE CORPORATIONS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED THEREIN.
THE CORPORATIONS MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO
BE OBTAINED BY LICENSEE, OWNERS OF THE PRODUCT(S), OR ANY OTHER PERSON
OR ENTITY FROM THE USE OF THE NASDAQ-100 INDEX(R) OR ANY DATA INCLUDED
THEREIN. THE CORPORATIONS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND
EXPRESSLY DISCLAIM ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR USE WITH RESPECT TO THE NASDAQ-100 INDEX(R) OR
ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT SHALL THE CORPORATIONS HAVE ANY LIABILITY FOR ANY LOST PROFITS OR
SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES, EVEN
IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
8.2 In all other materials relating or referring to a Derivative
Product, Licensee shall include at least this much of the above language, or
similar formulation:
Nasdaq(R), Nasdaq-100(R), and Nasdaq-100 Index(R), are trademarks of
The Nasdaq Stock Market, Inc. (which with its affiliatEs is referred to
as the "Corporations") and are licensed for use by Xxx Xxxxxx Funds
Inc.. The Product(s) have not been passed on by the Corporations as to
their legality or suitability. The Product(s) are not issued, endorsed,
sold, or promoted by the Corporations. THE CORPORATIONS MAKE NO
WARRANTIES AND BEAR NO LIABILITY WITH RESPECT TO THE PRODUCT(S).
SECTION 9. SUB-LICENSEES. Licensee may sub-license the use of the Index by the
subsidiaries or affiliates listed in Attachment I. Licensee may, by Notice to
Nasdaq, request permission to sub-license other subsidiaries or affiliates under
Licensee's control. Nasdaq will not unreasonably refuse its Consent (as that
term is further defined in Section 26 herein) to such a request. Licensee must
also request Nasdaq's prior Consent to sub-license an entity that is a necessary
participant in a Derivative Product (e.g., a corporation Issuing a corporate
bond with the Licensee as underwriter and utilizing the Index as a pricing
component). Nasdaq, in its sole discretion, may Consent to such sub-license. The
present list of sub-licensable entities is listed in Attachment I. However,
Licensee shall assume all responsibility for and will hold harmless and
indemnify the Corporations against any action or inaction by a sub-licensee as
if such action or inaction were that of the Licensee. In order to sub-license
any entity, Licensee must have obtained an agreement with the sub-licensee,
which is enforceable under applicable local law and contains the provisions set
forth in Attachment III, modified solely to make them enforceable under
applicable local law(s). Licensee may not waive any provision of the sub-license
or of this Agreement without Consent of Nasdaq.
SECTION 10. LIMITED WARRANTY. Nasdaq warrants that it will calculate the Index
in accordance with its then applicable method for calculation of the Index.
LICENSEE'S SOLE REMEDY IN EVENT OF A FAILURE OF THIS WARRANTY IS TO HAVE NASDAQ
RECALCULATE THE INDEX FOR THE AFFECTED TIMES ACCORDING TO NASDAQ'S APPLICABLE
METHOD FOR CALCULATION OF THE INDEX AT THE AFFECTED TIME(S). IN THE EVENT THAT
NASDAQ IS UNABLE OR UNWILLING TO RECALCULATE THE INDEX FOR AN AFFECTED PERIOD OF
OVER SEVEN CONSECUTIVE BUSINESS DAYS, NASDAQ WILL REFUND TO THE LICENSEE THE
PORTION OF FEES CALCULATED IN SECTION 11. THE CORPORATIONS DO NOT REPRESENT OR
WARRANT THAT THE INDEX OR THE MEANS BY WHICH NASDAQ CALCULATES THE INDEX IS FREE
OF DEFECTS. THE CORPORATIONS DO NOT REPRESENT OR WARRANT THE TIMELINESS,
SEQUENCE, ACCURACY OR COMPLETENESS OF THE CALCULATION OF THE INDEX, OR THAT THE
INDEX WILL MEET LICENSEE'S REQUIREMENTS. THE FOREGOING WARRANTIES ARE IN LIEU OF
ALL CONDITIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT
LIMITED TO, ANY IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR USE OR PURPOSE, ANY IMPLIED WARRANTY ARISING FROM TRADE USAGE,
COURSE OF DEALING, OR COURSE OF PERFORMANCE, AND OF ANY OTHER WARRANTY OR
OBLIGATION ON THE PART OF THE CORPORATIONS.
SECTION 11. REFUNDS. Where this Section is cross-referenced, the portion of Fees
refunded will be calculated as follows. If an applicable Fee was paid for the
right to Issue a Derivative Product during a period of time, then the amount of
the Fee to be refunded shall be the amount of the Fee times the number of days
remaining in the period for which the affected Derivative Product(s) were not
permitted under this Agreement to be Issued, divided by the total number of days
in the period. If a Fee was paid which related to Issuance of an entire
Derivative Product, then the amount of the Fee to be refunded shall be the
amount of the Fee actually paid which related to that portion of that Derivative
Product that was affected.
SECTION 12. INDEMNIFICATION.
12.1 Nasdaq has registered the Marks in the United States and certain
other countries. In the United States Nasdaq warrants and represents that it has
the right to grant the rights to use the Index and Marks specified in this
Agreement and that the license shall not infringe the title or any patent,
copyright, trade secret, trademark, service xxxx, or other proprietary
("INTELLECTUAL PROPERTY") right of any third party. Nasdaq will as its sole and
entire liability and obligation to Licensee (and any third party or
sub-licensee): defend, indemnify, and hold harmless ("INDEMNIFY") Licensee
(including its and its sub-licensee's officers, directors, employees, and
agents) against any and all claims, demands, actions, suits, or proceedings
("DISPUTES") asserting that the Index or any Xxxx infringes any Intellectual
Property right of any third party and Nasdaq will pay the third party the total
amount of any award, judgment, or settlement (including all damages however
designated) awarded to such third party resulting from the Dispute to the extent
caused by failure of Nasdaq's warranty.
12.2 Licensee agrees to Indemnify Corporations (including its and their
officers, directors, employees, and agents) from any and all Disputes as the
result of Licensee (including any sub-licensee) failure to fulfill its
obligations under this Agreement, any Licensee (including any sub-licensee) use
of the Index or any Xxxx that is not expressly permitted by this Agreement,
claims relating to or arising from a Derivative Product, or any other matter
relating or arising out of this Agreement except to the extent directly caused
by actions of the Corporations and will pay the third party the total amount of
any award, judgment, or settlement (including all damages however designated)
awarded such third party resulting from such Dispute except to the extent
directly caused by actions of the Corporations.
12.3 The right to be Indemnified shall apply to a dispute only if:
(a) the Party seeking indemnification promptly, and within no more
than five (5) calendar days of its receipt of notice of such
Dispute, gives Notice to the other Party of the Dispute;
(b) the Party seeking to be Indemnified cooperates fully with the
other in the defense thereof (such cooperation does not
require and is without waiver by either Party of
attorney/client, work product, or other privilege);
(c) the Indemnifying Party has sole control of the defense and all
related settlement negotiations.
12.4 In the event of a Dispute involving infringement or if in Nasdaq's
opinion such a Dispute is likely to occur, or if the use of the Index or Xxxx is
enjoined, Nasdaq may, at its sole option and expense, procure for Licensee the
right to continue using the Index or Xxxx, replace or modify the Index or Xxxx
to become non-infringing, or terminate the Term of the Agreement (with a refund
of Fees for that Term calculated in Section 11).
SECTION 13. LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY RESULTING FROM THE
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE CORPORATIONS AND EXCEPT TO THE
EXTENT STATED IN SECTIONS 12, OR 16, THE TOTAL AMOUNT OF THE CORPORATIONS'
LIABILITY FOR CLAIMS OR LOSSES BASED UPON, ARISING OUT OF, RESULTING FROM OR IN
ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT, WHETHER
BASED UPON CONTRACT, TORT, WARRANTY, OR OTHERWISE, SHALL IN NO CASE EXCEED THE
GREATER OF ONE YEAR'S FEES UNDER THIS AGREEMENT OR $20,000. THE ESSENTIAL
PURPOSE OF THIS PROVISION IS TO LIMIT THE CORPORATIONS' LIABILITY UNDER THIS
AGREEMENT. BOTH PARTIES UNDERSTAND AND AGREE THAT THE TERMS OF THIS AGREEMENT
REFLECT A NEGOTIATED AND REASONABLE ALLOCATION OF RISK AND LIMITATIONS GIVEN
COMMERCIAL REALITIES OF THE TRANSACTION.
SECTION 14. CONSEQUENTIAL DAMAGES. EXCEPT AS NOTED IN SECTION 12 AND EXCEPT FOR
A BREACH OF SECTION 16, THE CORPORATIONS SHALL NOT BE LIABLE TO THE LICENSEE,
ANY SUB-LICENSEE, OR ANY OTHER PERSON FOR ANY LOST PROFITS, ANTICIPATED PROFITS,
LOSS BY REASON OF SHUTDOWN IN OPERATION OR INCREASED EXPENSES OF OPERATION, LOSS
OF GOODWILL, FOR LOSS CAUSED IN SALE OF, PURCHASE OF, OR BY THE DERIVATIVE
PRODUCT, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR SPECIAL DAMAGES, EVEN
IF THE CORPORATIONS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
SECTION 15. FORCE MAJEURE. Notwithstanding any other term or condition of this
Agreement, neither Nasdaq nor Licensee shall be obligated to perform or observe
its obligations undertaken in this Agreement if prevented or hindered from doing
so by any circumstances beyond its control, including, without limitation, acts
of God, perils of the sea and air, fire, flood, drought, war, explosion,
sabotage, terrorism, embargo, civil commotion, acts of any governmental body,
supplier delays, communications, or power failure, equipment or software
malfunction, and labor disputes.
SECTION 16. CONFIDENTIALITY. Each Party shall protect information declared by
the other Party to be CONFIDENTIAL, or Proprietary. In fulfilling its
confidentiality obligations, each Party shall use a reasonable standard of care,
at least the same standard of care that it uses to protect its own similar
confidential or proprietary information. All confidential or proprietary
information must be conspicuously marked PROPRIETARY or CONFIDENTIAL.
Information revealed orally becomes subject to protection when related to marked
written materials or when designated as PROPRIETARY or CONFIDENTIAL as long as
the designation is confirmed in writing within ten (10) calendar days of the
designation. Either Party (including the Corporations) may disclose information
to the extent demanded by a court, revealed to a government agency with
regulatory jurisdiction over the Party (including the Corporations), or in the
Party's regulatory responsibilities over its members, associated persons,
issuers, or others under the Exchange Act of 1934, or similar applicable law.
The obligation of non-disclosure shall not extend to information which: (a) is
then already in the possession of the Party (including the Corporations) while
not under a duty of non-disclosure; (2) is generally known or revealed to the
public or within the applicable industry; (3) is revealed to the Party
(including the Corporations) by a third party--unless the Party (including the
Corporations) knows that such third party is under a duty of non-disclosure; or
(4) that Party (including the Corporations) develops independently of the
disclosure. Each copy, including its storage media, shall be marked with all
notices that appear on the original. The obligation of non-disclosure shall
survive for a period of three (3) years from the date of disclosure.
SECTION 17. NON-USE OF NASDAQ NAMES AND MARKS. Except as provided hereunder,
Licensee shall not use the names The Nasdaq Stock Market, Inc., "The Nasdaq
Stock Market", or "Nasdaq" nor any other trade name, trademark, service xxxx,
copyright, or patent of the Corporations, registered or unregistered, in any
advertising or promotional media of Licensee without the prior review and
written consent of Nasdaq.
SECTION 18. SURVIVAL OF PROVISIONS. The terms of this Agreement shall apply to
any rights that survive through the Life of this Agreement or the cancellation,
termination, or rescission of this Agreement, namely--all warranties,
indemnification and confidentiality obligations, and the Non-Use of Nasdaq Names
and Marks.
SECTION 19. CANCELLATION.
19.1 Either Party may elect, without prejudice to any other rights or
remedies, to terminate the Term this Agreement, upon thirty (30) days notice
with an opportunity to cure within the stated period, if the other Party has
failed to perform any material obligation under this Agreement.
19.2 Either Party may elect, without prejudice to any other rights or
remedies, to terminate the Term of this Agreement without notice, if a petition
in bankruptcy has been filed by or against the other Party or the other Party
has made an assignment for the benefit of creditors, or a receiver has been
appointed for the other Party or any substantial portion of the other Party's
property, or the other Party's or its officers or directors takes action
approving or makes an application for any of the above.
19.3 Licensee represents and warrants that at each time there is any
Issuance of a Derivative Product, that it and each of its sub-licensees and
involved entities shall have all applicable authority to Issue such Derivative
Products and that each such Derivative Product is Issued strictly in accordance
with all applicable legal requirements. Nasdaq may elect, without prejudice to
any other rights or remedies, to terminate the Term of this Agreement with
reasonable notice with an opportunity to cure within such period, if Nasdaq
reasonably believes that any Derivative Product is illegal or has been illegally
Issued, or if the Licensee or any sub-licensee or any involved entity does not
have the power to Issue any of the Derivative Products which it has or is
attempting to Issue.
19.4 Either Party may elect, without prejudice to any other rights or
remedies, to terminate the Term of this Agreement with thirty (30) days Notice
(or in the event of an emergency, with such Notice as is practicable), if either
Party's ability to perform its obligations under this Agreement is substantially
impaired by any new statute, or new rule, regulation, order, opinion, judgment,
or injunction of the Securities and Exchange Commission, a court, an arbitration
panel, or governmental body or Self-Regulatory Organization with jurisdiction
over the Party.
SECTION 20. SUBSEQUENT PARTIES; LIMITED RELATIONSHIP. The Agreement shall inure
to the benefit of and shall be binding upon the Parties hereto and their
respective permitted successors, or assigns. Licensee shall not assign this
Agreement (including by operation of law) without the written consent of Nasdaq.
Nothing in the Agreement, express or implied, is intended to or shall (a) confer
on any person other than the Parties hereto (and any of the Corporations), or
their respective permitted successors or assigns, any rights to remedies under
or by reason of this Agreement; (b) constitute the Parties hereto partners or
participants in a joint venture; or (c) appoint one Party the agent of the
other.
SECTION 21. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, and supersedes
all prior negotiations, communications, writings, and understandings.
SECTION 22. GOVERNING LAW. This Agreement shall be deemed to have been made in
the United States, in the State of New York and shall be construed and enforced
in accordance with, and the laws of the State of New York hereof shall govern
the validity and performance, without reference to principles of conflicts of
laws thereof. Licensee hereby consents to submit to the jurisdiction of the
courts for or in the City and State of New York in connection with any action or
proceeding instituted relating to this Agreement.
SECTION 23. AUTHORIZATION. This Agreement shall not be binding upon a Party
unless executed by an authorized officer of that Party. Licensee, Nasdaq, and
the persons executing this Agreement represent that such persons are duly
authorized by all necessary and appropriate corporate or other action to execute
the Agreement on behalf of Nasdaq or Licensee.
SECTION 24. HEADINGS. Section Headings are included for convenience only and are
not to be used to construe or interpret this Attachment.
SECTION 25. NOTICES. All notices, invoices, and other communications required to
be given in writing under this Agreement shall be directed to the persons
identified in subsections (a) and (b) below and shall be deemed to have been
duly given upon actual receipt by the Parties, or upon constructive receipt if
sent by certified mail, return receipt requested (as of the date of signature or
of first refusal of the return receipt), or by any other delivery method which
obtains a signed delivery receipt, addressed to the person named below to the
following addresses or to such other address as any Party hereto shall hereafter
specify by written notice to the other Party or Parties hereto:
(a) IF TO LICENSEE:
Name: Xxxxx Xxxxxxx
Title: Xxx Xxxxxx Funds Inc.
Address: 0 Xxxxxxxx Xxxxx
X.X. Xxx 0000
Xxx Xxxxx Xxxxxxx, XX 00000
Telephone #: 000-000-0000
WITH A COPY TO:
Name: Xxx Xxxx XxXxxxx
Title: Office of the General Counsel
Xxx Xxxxxx Investments Inc.
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone #: 000-000-0000
(b) IF TO NASDAQ:
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
Address: The Nasdaq Stock Market, Inc.
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone #: 000.000.0000
With, in the event of notices of Dispute or default, a required copy to:
The Nasdaq Stock Market, Inc.
Office of the General Counsel
0000 Xxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Nasdaq Contracts Group
SECTION 26. AMENDMENT, WAIVER, AND SEVERABILITY. Except as otherwise provided
herein, no provision of this Agreement may be amended, modified, or waived,
unless by an instrument in writing executed by a duly authorized officer of the
Party against whom enforcement of such amendment, modification, or waiver is
sought ("CONSENT").
26.1 No failure on the part of Nasdaq or Licensee to exercise, no delay
in exercising, and no course of dealing with respect to any right, power, or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power, or privilege preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege under this Agreement.
26.2 If any of the provisions of this Agreement, or application thereof
to any person or circumstance, shall to any extent be held invalid or
unenforceable, the remainder of this Agreement, or the application of such terms
or provisions to persons or circumstances other than those as to which they are
held invalid or unenforceable, shall not be affected thereby and each such term
and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
SECTION 27. COUNTERPARTS. The Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and such counterparts
together shall constitute but one and the same instrument.
SECTION 28. SCHEDULE OF ATTACHMENTS. The following Attachments are referred to
in this Agreement and are incorporated as if set forth in full herein. In the
event of a conflict between the Attachments and this Agreement, the Attachments
shall govern:
Attachment I -- Sub-Licensees
Attachment II -- Definition of Derivative Product(s) and Fees
Attachment II. -- Sub-License Agreement
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR DULY AUTHORIZED OFFICERS.
XXX XXXXXX FUNDS INC. ("LICENSEE")
By: __________________________________________
Name: __________________________________________
Title: __________________________________________
AUTHORIZED OFFICER
Date: __________________________________________
Executed this ______ day of _____________________, 2005, for and on behalf of:
THE NASDAQ STOCK MARKET, INC. ("NASDAQ")
By: __________________________________________
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
2005 Main license agreement (2)
1/11/2005
ATTACHMENT I
Permitted Sub-Licensees of Xxx Xxxxxx Funds Inc..
ATTACHMENT II
DEFINITION OF DERIVATIVE PRODUCTS AND PRICES
NO INDEX-LICENSED PRODUCT MAY BE AN INSTRUMENT ISSUED BY THE OPTIONS CLEARING
CORPORATION (OCC) OR ANOTHER CLEARING AGENCY REGISTERED UNDER SECTION 17 OF THE
SECURITIES EXCHANGE ACT OF 1934 OR ANY INSTRUMENT EXCLUSIVELY REGULATED BY THE
COMMODITY FUTURES TRADING COMMISSION ("CFTC") OR TRADED ON AN ELECTRONIC TRADING
FACILITY MAINTAINED BY THE CFTC, OR AN OPTION ON SUCH INSTRUMENTS. AN
INDEX-LICENSED PRODUCT MAY ONLY BE LISTED OR TRADED ON A NON-AMERICAN MARKET. A
"NON-AMERICAN MARKET" MEANS AN EXCHANGE OR MARKET FOR ANY FINANCIAL INSTRUMENT
(INCLUDING EQUITIES, OPTIONS, FUTURES, DEBT, ETC.) NOT LOCATED IN THE AMERICAS
AND ONE NOT REGISTERED, AND WHOSE SPONSOR IS NOT REGISTERED, WITH ANY SECURITIES
REGULATORY AGENCY OR BODY IN THE AMERICAS. IN ANY COUNTRY OR GEOGRAPHIC REGION
IN WHICH THE NASDAQ STOCK MARKET MAY OWN, OPERATE, OR BE AFFILIATED WITH AN
ORGANIZED TRADING MARKET VENUE ON WHICH THE INDEX-LICENSED PRODUCT WOULD BE
ELIGIBLE TO BE LISTED, SUCH NASDAQ TRADING MARKET VENUE MUST BE GRANTED THE
RIGHT OF FIRST REFUSAL TO LIST THE INDEX-LICENSED PRODUCT BEFORE THE PRODUCT MAY
BE LICENSED FOR LISTING OR TRADING ON ANOTHER EXCHANGE OR MARKET.
NASDAQ RESERVES AS ITS OWN ALL WORLDWIDE PROPRIETARY INTEREST IN THE NASDAQ
MARKS, WHICH MAY BE USED IN CONNECTION WITH EXCHANGE TRADED FUND-TYPE PRODUCTS
BASED ON THE NASDAQ-100 INDEX(R). THEREFORE, NO LICENSE IS GRANTED FOR AN
EXCHANGE TRADED FUND ("ETF"), WHETHER OR NOT REGISTERED AS AN INVESTMENT COMPANY
IN THE FORM OF AN OPEN-END MUTUAL FUND, A UNIT INVESTMENT TRUST, OR OTHERWISE
WORLDWIDE. FURTHERMORE, NO LICENSE IS GRANTED FOR ANY FINANCIAL INSTRUMENTS
WHOSE INVESTMENT ATTRIBUTES, AS DETERMINED BY NASDAQ IN ITS SOLE DISCRETION,
MAKE IT SIMILAR TO AN EXCHANGE TRADED FUND BASED ON THE NASDAQ-100 INDEX(R). IN
ASSESSING SIMILARITY TO AN ETF, FACTORS TO BE CONSIDERED INCLUDE, AMONG OTHERS:
1) WHETHER THE MARKET VALUE OF THE INSTRUMENT IS LIKELY TO MOVE UP OR DOWN IN
CLOSE CORRELATION TO THE NASDAQ-100 INDEX(R) OR TO A NASDAQ ETF BASED ON THE
INDEX; 2) WHETHER THE INSTRUMENT IS AVAILABLE TO BE PURCHASED OR SOLD BY THE
AVERAGE PUBLIC INVESTOR AND HELD IN A BROKERAGE ACCOUNT IN A MANNER SIMILAR TO
THAT OF AN ORDINARY SHARE OF STOCK; AND 3) WHETHER THE INSTRUMENT IS LISTED OR
TRADED ON A WELL-ESTABLISHED MARKETPLACE WHICH SEEKS TO ATTRACT THE ORDER FLOW
OF THE AVERAGE PUBLIC INVESTOR. IN CONSIDERING THE FACTS AND CIRCUMSTANCES
PERTAINING TO ANY PARTICULAR PRODUCT IN LIGHT OF THE ABOVE CRITERIA OR OTHER
REASONABLE CRITERIA, NASDAQ RESERVES THE ABSOLUTE RIGHT WITHIN ITS SOLE
DISCRETION TO REFRAIN FROM GRANTING A LICENSE WITH RESPECT TO THE NASDAQ MARKS
AS IT DEEMS NECESSARY TO PROTECT ITS PROPRIETARY INTEREST.
DESCRIPTION OF DERIVATIVE PRODUCT(S)
NAME Xxx Xxxxxx Unit Trusts- Nasdaq
Select 10 Portfolio
SHORT NAME NASQ
PORTFOLIO SECURITIES 10 Securities
PROCESS 1.) Begin with the Nasdaq-100 Index.
2.) Rank the companies by market
capitalization and chose the top
twenty 3.) Rank those twenty companies
based on the previous twelve month's
sales as most recently reported 4.)
Select the ten companies with the
highest annual sales, by dollar amount
and equally weight each security.
Term: Effective November 1, 2004
FEES
The annual license fees are the greater of $10,000 ( the "Annual Minimum Fee")
or four (4) basis points (.0004%) of the total assets under management of the
Nasdaq Select 10 Portfolio, PAYABLE quarterly. The Minimum Annual Fees shall be
payable on the commencement date, for the term of the License Agreement. Amounts
in excess of the Minimum Annual Fee shall be paid to Nasdaq 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 addition, a year-end statement for the preceding calendar year
shall be provided and shall include the monthly average assets under management
at each month end.
The first day of the calendar quarter that includes the date of Issuance of the
first shares of the first series of each Derivative Product shall be referred to
as the "Anniversary Date". The Licensee shall pay to Nasdaq the greater of the
Annual Minimum Fee or .0001 basis points of the funds then under management for
that Derivative Product on each Anniversary Date (for the first year, the assets
are those under management on the issuance date; for subsequent years, the
assets under management are calculated based on the assets then under management
of the entire series for that Derivative Product on the day before the date of
the termination of the series of that Derivative Product that expires at the end
of that quarter). Thereafter, within 30 days after the end of each calendar
quarter, Licensee shall file a report calculating the fee based upon .0001 basis
points of the assets then under management of the entire series of the
Derivative Product that expires at the end of that quarter. Licensee shall pay,
within 30 days after the end of the applicable calendar quarter, the difference
between: (a) the cumulative total of the fees calculated each quarter since the
last Anniversary Date; and (b) the Annual Minimum Fee plus fees paid in quarters
since the last Anniversary Date.
Nasdaq-100 Index License
Version: 7.04
ATTACHMENT III
Sub-License Agreement
This agreement ("AGREEMENT"), is made by and between [Insert Name of Licensee]
("LICENSEE"), whose principal offices are located at
------------------------------------
and who is a Licensee of The Nasdaq Stock Market, Inc. ("NASDAQ"), a Delaware
Corporation whose principal offices are located at Xxx Xxxxxxx Xxxxx, 000
Xxxxxxxx, Xxx Xxxx, XX 00000 and __________________________ ("SUB-LICENSEE"),
whose principal offices are located at
____________________________________________.
WHEREAS, Nasdaq possesses certain rights to Nasdaq(R), Nasdaq-100(R),
and Nasdaq-100 Index(R) as trade names, trademarKs or service marks ("MARKS");
WHEREAS, Nasdaq determines the components of the Nasdaq-100 Index(R)
and the proprietary data contained therein ("INDEX") anD such efforts involve
the considerable expenditure of time, effort, judgment and money; and
WHEREAS, Nasdaq calculates, maintains, and disseminates the Index; and
WHEREAS, Nasdaq and Licensee have previously entered into a separate
agreement concerning use of the Index and Marks in relating to certain
Derivative Products ("LICENSE AGREEMENT"); and
WHEREAS, Sub-Licensee is either: (1) an affiliate or subsidiary under
the control of Licensee which desires to use the Index as a component of a
pricing or settlement mechanism for the Derivative Products; or (2) a necessary
participant in a Derivative Product (e.g., a corporation Issuing a corporate
bond with the Licensee as underwriter and utilizing the Index as a pricing
component) Issued by Licensee or an authorized Sub-Licensee affiliate or
subsidiary under the control of Licensee; and
WHEREAS, Licensee is legally authorized to issue shares of the fund, or
issue, enter into, write, sell, purchase and/or renew ("ISSUE", "ISSUING", or
"ISSUANCE") such Derivative Products, and each Derivative Products will be
Issued as legally required under applicable law;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein, Licensee and Sub-Licensee, 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
Licensee and Nasdaq relating to use of the Index and Marks. Except as noted
herein, Sub-Licensee hereby agrees to obligate itself to all the terms,
conditions, and obligations of that License Agreement as if Sub-Licensee were
the Licensee. Sub-Licensee agrees that Nasdaq may exercise any rights against
Sub-Licensee (including, for example, limitation of liability, indemnification,
or audit rights) Nasdaq has against the Licensee to the same extent as if
Sub-Licensee were directly contracting with Nasdaq. Sub-Licensee agrees it will
not assert against Nasdaq any defense, claim, or right Sub-Licensee may have
against Licensee, including those of set-off, abatement, counter-claim,
contribution, or indemnification. SECTION 2. NO FURTHER SUB-LICENSE. All
references in the License Agreement to sub-licenses and sub-licensees, including
any right of sub-licensee to grant further sub-licenses or to permit further
sub-licensees are not applicable to this Sub-Licensee Agreement and are as if
deleted from the License Agreement.
SECTION 3. TERM. The Term of this Sub-License Agreement automatically
terminates, without Notice, if the Term of the License Agreement terminates for
any reason.
SECTION 4. GENERAL PROVISIONS. Sections from 21, through and including, Section
27 of the License Agreement govern this Sub-License Agreement. All terms and
definitions used in this Sub-License Agreement, unless otherwise indicated, have
the same meanings and definitions as in the License Agreement. LICENSEE HAS NO
AUTHORITY TO WAIVE, RENEGOTIATE, OR FORGIVE ANY PROVISION OF THE LICENSE
AGREEMENT AS IT APPLIES TO SUB-LICENSEE.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS SUB-LICENSE AGREEMENT TO
BE EXECUTED BY THEIR DULY AUTHORIZED OFFICERS.
[INSERT NAME OF LICENSEE] ("LICENSEE")
By: ______________________________________________
Name: ______________________________________________
Title: ______________________________________________
AUTHORIZED OFFICER
Date: ______________________________________________
[INSERT NAME OF SUB-LICENSEE] ("SUB-LICENSEE")
By: ______________________________________________
Name: ______________________________________________
Title: ______________________________________________
AUTHORIZED OFFICER
Date: ______________________________________________
ATTACHMENT II.
Definition of Derivative Products and Prices
NO INDEX-LICENSED PRODUCT MAY BE AN INSTRUMENT ISSUED BY THE OPTIONS
CLEARING CORPORATION (OCC) OR ANOTHER CLEARING AGENCY REGISTERED UNDER SECTION
17 OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANY INSTRUMENT EXCLUSIVELY
REGULATED BY THE COMMODITY FUTURES TRADING COMMISSION (CFTC) OR TRADED ON AN
ELECTRONIC TRADING FACILITY MAINTAINED BY THE CFTC, OR AN OPTION ON SUCH
INSTRUMENTS. AN INDEX-LICENSED PRODUCT MAY ONLY BE LISTED OR TRADED ON A
NON-AMERICAN MARKET. A "NON-AMERICAN MARKET" MEANS AN EXCHANGE OR MARKET FOR ANY
FINANCIAL INSTRUMENT (INCLUDING EQUITIES, OPTIONS, FUTURES, DEBT, ETC.) NOT
LOCATED IN THE AMERICAS AND ONE NOT REGISTERED, AND WHOSE SPONSOR IS NOT
REGISTERED, WITH ANY SECURITIES REGULATORY AGENCY OR BODY IN the AMERICAS. IN
ANY COUNTRY OR GEOGRAPHIC REGION IN WHICH THE NASDAQ STOCK MARKET MAY OWN,
OPERATE, OR BE AFFILIATED WITH AN ORGANIZED TRADING MARKET VENUE ON WHICH THE
INDEX-LICENSED PRODUCT WOULD BE ELIGIBLE TO BE LISTED, SUCH NASDAQ TRADING
MARKET VENUE MUST BE GRANTED THE RIGHT OF FIRST REFUSAL TO LIST THE
INDEX-LICENSED PRODUCT BEFORE THE PRODUCT MAY BE LICENSED FOR LISTING OR TRADING
ON ANOTHER EXCHANGE OR MARKET.
NASDAQ RESERVES AS ITS OWN ALL WORLDWIDE PROPRIETARY INTEREST IN THE
NASDAQ-100(R) AND THE NASDAQ-100 INDEX(R) (THE NASDAQ MARKS), WHICH MAY BE USED
IN CONNECTION WITH EXCHANGE TRADED FUND-TYPE PRODUCTS BASED ON THE NASDAQ-100
INDEX(R). THEREFORE, NO LICENSE IS GRANTED FOR AN EXCHANGE TRADED FUND (ETF),
WHETHER OR NOT REGISTERED AS AN INVESTMENT COMPANY IN THE FORM OF AN OPEN-END
MUTUAL FUND , A UNIT INVESTMENT TRUST, OR OTHERWISE WORLDWIDE. FURTHERMORE, NO
LICENSE IS GRANTED FOR ANY FINANCIAL INSTRUMENTS WHOSE INVESTMENT ATTRIBUTES, AS
DETERMINED BY NASDAQ IN ITS SOLE DISCRETION, MAKE IT SIMILAR TO AN EXCHANGE
TRADED FUND BASED ON THE NASDAQ-100 INDEX(R). IN ASSESSING SIMILARITY TO AN ETF,
FACTORS TO BE CONSIDERED INCLUDE, AMONG OTHERS: 1) WHETHER THE MARKET VALUE OF
THE INSTRUMENT IS LIKELY TO MOVE UP OR DOWN IN CLOSE CORRELATION TO THE
NASDAQ-100 INDEX(R) OR TO A NASDAQ ETF BASED ON THE INDEX; 2) WHETHER THE
INSTRUMENT IS AVAILABLE TO BE PURCHASED OR SOLD BY THE AVERAGE PUBLIC INVESTOR
AND HELD IN A BROKERAGE ACCOUNT IN A MANNER SIMILAR TO THAT OF AN ORDINARY SHARE
OF STOCK; AND 3) WHETHER THE INSTRUMENT IS LISTED OR TRADED ON A
WELL-ESTABLISHED MARKETPLACE WHICH SEEKS TO ATTRACT THE ORDER FLOW OF THE
AVERAGE PUBLIC INVESTOR. IN CONSIDERING THE FACTS AND CIRCUMSTANCES PERTAINING
TO ANY PARTICULAR PRODUCT IN LIGHT OF THE ABOVE CRITERIA OR OTHER REASONABLE
CRITERIA, NASDAQ RESERVES THE ABSOLUTE RIGHT WITHIN ITS SOLE DISCRETION TO
REFRAIN FROM GRANTING A LICENSE WITH RESPECT TO THE NASDAQ MARKS AS IT DEEMS
NECESSARY TO PROTECT ITS PROPRIETARY INTEREST.
DESCRIPTION OF PRODUCT(S)
The Enhanced Index Strategies Portfolio will combine 6 different Xxx Xxxxxx UIT
strategies into a single portfolio
INVESTMENT SCREENING PROCESSES
These will vary with each of the six strategies. The Dow Contrarian Strategy,
also known as the "Underdogs," is simply the 10 Dow Xxxxx Industrial Average
stocks with the worst performance on a price basis over the last 52 weeks. Three
of the strategies, the Large Cap Growth, Mid-Cap Value, and Small Cap Core,
utilize the quantitative models developed by Lightstone Capital Management. The
EAFE Select 20 uses sales, earnings and dividend growth screens, followed by
liquidity and dividend ranking screens. The NASDAQ Select 10 uses market cap and
sales screens to develop its portfolio. Each strategy has hypothetical
performance, including sales charges and expenses, dating back to at least 1992,
and in some cases over 30 years.
FEES
The annual license fees are the greater of $2,000 ( the "Annual Minimum Fee") or
..85 basis points (.0085%) of the total assets under management of the Global
Enhanced Index Strategies Portfolio, PAYABLE quarterly. The Minimum Annual Fees
shall be payable on the commencement date, for the term of the License
Agreement. Amounts in excess of the Minimum Annual Fee shall be paid to Nasdaq
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 addition, a year-end statement for the
preceding calendar year shall be provided and shall include the monthly average
assets under management of the Nasdaq-100 Account at each month end. The first
day of the calendar quarter that includes the date of Issuance of the first
shares of the first series of each Derivative Product shall be referred to as
the "Anniversary Date". The Licensee shall pay to Nasdaq the greater of the
Annual Minimum Fee or .02125 basis points of the funds then under management for
that Derivative Product on each Anniversary Date (for the first year, the assets
are those under management on the issuance date; for subsequent years, the
assets under management are calculated based on the assets then under management
of the entire series for that Derivative Product on the day before the date of
the termination of the series of that Derivative Product that expires at the end
of that quarter). Thereafter, within 30 days after the end of each calendar
quarter, Licensee shall file a report calculating the fee based upon .02125
basis points of the assets then under management of the entire series of the
Derivative Product that expires at the end of that quarter. Licensee shall pay,
within 30 days after the end of the applicable calendar quarter, the difference
between: (a) the cumulative total of the fees calculated each quarter since the
last Anniversary Date; and (b) the Annual Minimum Fee plus fees paid in quarters
since the last Anniversary Date.
This Attachment II is meant to supplement and not to supersede the prior
Attachment II.
IN WITNESS WHEREOF, AUTHORIZED OFFICERS OF THE PARTIES HAVE SIGNED THIS
AGREEMENT WITH THE INTENT TO BE BOUND THEREBY.
Xxx Xxxxxx Investments____________ (Licensee)
The Nasdaq Stock Market, Inc. (Nasdaq)
----------------------------------
By: ________________________ By _____________________________
Name: ________________________ Name: Xxxx X. Jacobs______________
Title: ________________________ Title Executive Vice President______
AUTHORIZED OFFICER
Date: ________________________ Date: ___________________________
