EXHIBIT 2.2
LICENSE AGREEMENT
This License Agreement, dated as of ____________, is made by and
between Dow Xxxxx & Company, Inc. ("Dow Xxxxx"), having an office at 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and Xxx Xxxxxx Funds Inc. (the "Licensee"),
having an office at Xxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, XX, 00000.
WHEREAS, Dow Xxxxx compiles, calculates and maintains the Dow ]ones
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," "30 Industrials," "Dow 30," "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 ]ones
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.
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(a) Subject to the terms and conditions of this Agreement, Dow Xxxxx
hereby grants to the Licensee a non-transferable (except to affiliates pursuant
to Section 12(a)) non-exclusive license to use and refer to the Dow Xxxxx Marks
in connection with the issuance, 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. Any material changes to the terms and conditions of the
Products will be subject to Dow Xxxxx' prior written consent.
(c) Dow Xxxxx agrees that no person or entity other than the Licensee
shall need to obtain a license from Dow Xxxxx with respect to the initial sale
of the Products or subsequent resales of the Products in the secondary market.
(d) 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, except as otherwise
contemplated by this Agreement.
(e) 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.
(f) 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.
2. Term.
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The term of this Agreement shall commence as of the date hereof (the
"Commencement Date") and shall remain in full force and effect until the fifth
anniversary of the Commencement Date, unless this Agreement is terminated
earlier as provided herein (such term being referred to as the "Initial Term").
The first twelve months following the Commencement Date are referred to as the
"First Year," the next twelve months are referred to as the "Second Year," and
so on.
Upon expiration of the Initial Term (other than by reason of
termination of this Agreement as provided herein), this Agreement may be renewed
at the election of the Licensee, by delivery of written notice to Dow Xxxxx to
that effect at least 90 days prior to expiration of the Initial Term, for an
additional five years (the "Renewal Term"); provided, however, that Licensee
shall not have the right to renew the term hereunder without Dow Xxxxx' prior
written consent if, (x) at the time of expiration of the Initial Term, the
Licensee is in material breach of this Agreement or (y) the aggregate average
assets invested in the Products in respect of the Fourth Year is less than $500
million. (The Initial Term and the Renewal Term, if any, are referred to herein,
together, as the ("Term.")
3. License Fee.
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(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 License 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.
(c) As of December 31 for each year of the Term of this Agreement,
Licensee shall deliver a report to Dow Xxxxx including the amount of the average
daily net assets of each Product as of December 31. Dow Xxxxx shall have the
right to request, and the Licensee shall deliver to Dow Xxxxx promptly upon such
a request, reasonable information and documentation with respect to any Product.
4. Termination.
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(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 in Licensee's reasonable judgment prevents the Licensee from
issuing, marketing or promoting the Products; (ii) any material litigation or
regulatory proceeding regarding the Products is commenced or threatened and
Licensee reasonably believes that such litigation or proceeding would be
reasonably likely to have a material and adverse effect on the Products or on
Licensee's ability to perform under this Agreement; (iii) the Licensee elects to
terminate the public offering or other distribution of the Products; or (iv) any
of the events set forth in Section 4(c)(i) through (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 my 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) though (iii)
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) of a type or to an extent applicable to Dow Xxxxx (and not
to others generally) 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 90
days after the date hereof.
5. Dow Xxxxx Obligations.
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(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 has, and shall maintain, a policy pursuant to which its
employees who are directly responsible for changes in the components of the
Index are prohibited from purchasing or beneficially owning any interest in the
Products. The Licensee shall have no responsibility for ensuring that such Dow
Xxxxx employees comply with such Dow Xxxxx policy and shall have no duty to
inquire whether any purchasers or sellers of the Products are such Dow Xxxxx
employees. Dow Xxxxx shall have no liability to the Licensee with respect to Dow
Xxxxx' employees' adherence or failure of adherence to such policy.
(d) 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 composition
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.
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(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 written 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
Industrials", "The Dowsm", and "The Dow 10sm" 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, during the Term or
thereafter, 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 License 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
Licensee. 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 reasonable 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 Licensee or Dow Xxxxx be required to take
any action Licensee or Dow Xxxxx, respectively, 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) Wowing receipt thereof from the Licensee. Once Informational Materials
have been approved by Dow ]ones, 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 in authorized licensee of such Dow Xxxxx Marks, is clear and
obvious.
(f) The Licensee agrees that any proposed material change by the
Licensee in (i) the terms and conditions of the Products or (ii) the use of the
Dow Xxxxx Marks shall be submitted to Dow Xxxxx for, and shall be subject to,
Dow Xxxxx' prior written consent.
(g) In the event Dow Xxxxx ceases to compute, calculate and publish the
values of the Index pursuant to Section 4(c)(iii) or 4(d) hereof, Dow Xxxxx
shall provide to the Licensee a list of companies, shares outstanding and
divisors for the discontinued Index as of the effective date of termination. The
Licensee may thereafter use such information to compute, calculate and publish a
new index as the bases for the Products previously based upon the discontinued
Index; provided, however, that the Licensee shall not thereafter make any
reference to the Dow Xxxxx Marks in respect of any such new index, or any
products based thereon, and Dow Xxxxx shall have no further obligations to the
Licensee whatsoever with respect to the discontinued Index, the new index, or
any products based thereon and, provided, further, that the Licensee shall
prominently disclaim any relationship with Dow Xxxxx in respect of the new
index. The Licensee may use the Dow Xxxxx Marks after the date of termination
for the sole purpose of providing notification of such termination as it relates
to the Products; provided, that such notification shall be subject to the prior
written approval of Dow Xxxxx and Licensee shall not be deemed to be in default
of its obligations pursuant to this Section 6(g) upon any unreasonable denial or
delay in approval by Dow Xxxxx.
7. Proprietary Rights.
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(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.
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(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 applicable to Licensee.
(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, as such may be modified from time to time in compliance with this
Agreement.
(c) The Licensee shall, to the extent lawful, include the statement
contained in Exhibit I 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 I hereto (which terms are expressly incorporated herein by reference and
made a part hereof). Any changes in the statement contained in Exhibit I 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 I
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.
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(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 may 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. 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.
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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 obligation under Section 9(a) in the case of any claim, action or
proceeding brought by a third party.
11. Injunctive Relief.
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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.
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(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; provided, however, that any successor
through sale, merger, corporate reorganization, or otherwise, to Licensee's Unit
Investment Trust business, and any affiliate which, directly or indirectly,
controls, is controlled by or is under common control with the Licensee may use
the Index and the Dow Xxxxx Marks in connection with the issuance, marketing and
promotion of the Products, provided that such affiliate or successor shall be
subject to all of the terms and conditions of this Agreement applicable to the
Licensee. 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,
or confidentiality, 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 written 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.
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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.
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Legal Department
Fax No: 212/000-0000
If to the Licensee: Xxx Xxxxxx Funds Inc.
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Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
Fax No: (000) 000-0000
(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: Xxxxx X. Xxxxx
Title: Vice President
XXX XXXXXX FUNDS INC.
By:
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
INDEX OF ATTACHMENTS
SCHEDULES:
Schedule A Products Description
Schedule B License Fees
EXHIBITS:
Exhibit I Disclaimer Language
SCHEDULE A
PRODUCTS DESCRIPTION
One or more investment funds sponsored by the Licensee, whose
investment objective is based on a Strategy. The term "Strategy" shall mean an
investment strategy that meets one of the following descriptions:
1) Funds are invested in the ten stocks included in the Index that have
the highest dividend yield as a percentage of their period-end stock
price (the "High-Yield Stocks"). These investments are held for a
specified period of time. This strategy is commonly referred to as the
"dogs" of The DowSM investment strategy. Any such fund shall be named,
"The DowSM Strategic 10 Trust".
2) Funds are invested in the second through sixth lowest priced stocks
that make up the High-Yield Stocks (the "Five Selected Stocks"). These
investments are held for a specified period of time. Any such fund
shall be named, "The DowSM Strategic 5 Trust".
3) Funds are invested in all thirty stocks included in the Index (the "Dow
Industrial Stocks"). These investments are held for a specified period
of time. Any such fund shall be named, "The Dow 30SM Index Trust".
4) Funds are invested in a combination of all the Dow Industrial Stocks
(at least 50%) and United States Treasury STRIPS. These investments are
held for a specified period of time. Any such fund shall be named, "The
Dow 30SM and Treasuries [Maturity Date] Trust".
SCHEDULE B
LICENSE FEES
Licensee shall pay license fees in accordance with the following:
o On the Commencement Date, and, during the Term, on each
anniversary of the Commencement Date, the Licensee will pay to
Dow Xxxxx a flat annual minimum payment equal to Fifty Thousand
Dollars ($50,000) in respect of the twelve-month period
commencing on the Commencement Date or such anniversary date, as
the case may be (each, an "Annual Minimum Payment").
Notwithstanding the foregoing, with respect to the first Annual
Minimum Payment, Licensee shall pay to Dow Xxxxx $35,000 upon the
Commencement Date and $15,000 upon the earlier of (i) the launch
of The Dow 30SM Index Trust and The Dow 30SM and Treasuries
[Maturity Date] Trust and (ii) sixty (60) days after the
Commencement Date.
o In addition, during each Year (defined below) of the Term, the
Licensee will provide to Dow Xxxxx a written report (each, a
"Monthly Report"), within 10 days after each month-end, which
sets forth (i) the asset balance for each Product at such
month-end, and (ii) a calculation of the Rolling Average Asset
Balance (defined below) at such month-end. Within 10 days after
the end of each Quarter (defined below) during each Year of the
Term, the Licensee will pay (each, a "Quarterly Payment") to the
Dow Xxxxx affiliate designated by Dow Xxxxx an amount equal to
one quarter of the Basis Point Amount (defined below); provided,
however, that, in each year of the Term, Licensee shall be
entitled to apply a credit in an amount equal to the Annual
Minimum Payment against the aggregate of the Quarterly Payments
for that year until such credit is depleted.
o All amounts will be paid in cash and will be non-refundable;
provided, however, that Licensee (without limiting any other
remedy available at law or equity) shall be entitled to a pro
rata refund of License Fees paid in the event that this Agreement
is terminated by Licensee pursuant to Section 4(a) due to Dow
Xxxxx'x breach of this Agreement and it is determined by a court
of competent jurisdiction that Dow Xxxxx was in material breach
of this Agreement.
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 this Agreement.
o Definitions:
-----------
"Basis Point Amount" means, at any time during a Year, an amount equal
to two (2) basis points (.0002) 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 month-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 Commencement Date
or on any anniversary of the Commencement Date.
EXHIBIT I
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].
AMENDMENT NO. 2 TO
LICENSE AGREEMENT DATED
SEPTEMBER 8,1998
This Amendment No. 2 to the License Agreement dated September 8, 1998
between Dow Xxxxx & Company, Inc. ("Dow Xxxxx") and Xxx Xxxxxx Funds Inc. (the
"Licensee"), as amended by an amendment dated December 1, 1999 ("Amendment No.
1"), is made this February 1, 2000 between Dow Xxxxx and the Licensee. All
capitalized terms used in this Amendment No. 2 without definition shall have the
meaning ascribed to them in the License Agreement or Amendment No. 1, as the
case may be.
WHEREAS, Dow Xxxxx has previously granted Licensee a license to use Dow
Xxxxx'x Intellectual Property in connection with the issuance, marketing and
promotion of Products and the Dow 5 Tech Funds.
WHEREAS, Licensee was obligated to pay Dow Xxxxx an Annual Minimum
Payment and Quarterly Payment with respect to the Products, and a separate Dow 5
Tech Fund Annual Minimum Payment and Dow 5 Tech Fund Quarterly Payment with
respect to the Dow 5 Tech Funds.
WHEREAS, the parties wish to consolidate the payments for the Products
and the Dow 5 Tech Fund.
NOW, THEREFORE, the parties agree as follows:
1. Licensee shall pay License Fees in accordance with the following:
(a) On each anniversary of the Commencement Date, Licensee
will pay to Dow Xxxxx a flat annual minimum payment of $70,000 for the
twelve-month period beginning on such anniversary date, which represents the
combined annual minimum payment for the Products and the Dow 5 Tech Funds,
except that the payment due on September 8, 2000 will be $65,000.
(b) In addition, during each Year (defined below) of the Term,
Licensee will provide to Dow Xxxxx a written report (each, a "Quarterly
Report"), within 10 days after the end of each Quarter (defined below), which
sets forth (i) the combined asset balance for each Product and Dow 5 Tech Fund
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 Licensee will pay (each, a "Quarterly
Payment") to the Dow Xxxxx affiliate designated by Dow Xxxxx an amount equal to
one quarter of the Basis Point Amount (defined below); provided, however, that
in each year of the Term, Licensee shall be entitled to apply a credit in an
amount equal to the Annual Minimum Payment against the aggregate of the
Quarterly Payments for that Year until such credit is depleted.
(c) All amounts will be paid in cash and will be
non-refundable; provided, however, that Licensee (without limiting any other
remedy available at law or equity) shall be entitled to a pro rata refund of
License Fees paid in the event that this Agreement is terminated by Licensee
pursuant to Section 4(a) of the License Agreement due to Dow Xxxxx'x breach of
the License Agreement and it is determined by a court of competent jurisdiction
that Dow Xxxxx was in material breach of the License Agreement. 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).
(d) The terms hereof shall be deemed "Confidential
Information" under the License Agreement.
(e) These terms are defined as follows:
"Basis Point Amount" means, at any time during a Year, an
amount equal to two basis points (.0002) 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 aggregate assets in the Products and the Dow 5 Tech
Funds for the Quarter then ended, calculated by adding the asset balances for
the Products and the Dow 5 Tech funds for the three months in such Quarter and
dividing the result by three.
"Year" means a twelve-month period commencing on the
Commencement Date or on any anniversary of the Commencement Date.
2. Except as expressly amended hereby, all provisions in the License
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2
to the License Agreement to be executed as of the date set forth above.
XXX XXXXXX FUNDS INC.
By:
---------------------------------------
Name:
Title:
DOW XXXXX & COMPANY, INC.
By:
---------------------------------------
Xxxxx X. Xxxxx
President, Dow Xxxxx Indexes
CONFIDENTIAL
AMENDMENT NO. 1 TO
LICENSE AGREEMENT DATED
SEPTEMBER 8, 1998
This Amendment No. 1 to the License Agreement dated September 8, 1998
between Dow Xxxxx & Company, Inc. ("Dow Xxxxx") and Xxx Xxxxxx Funds Inc. (the
"Licensee") is made this December 1, 1999 by and between Dow Xxxxx and the
Licensee.
WHEREAS, Dow Xxxxx previously granted Licensee a license to use certain
intellectual property of Dow Xxxxx (as more fully defined in the License
Agreement, the "Intellectual Property") in connection with issuance, marketing
and promotion of certain investment products (as more fully defined in the
License Agreement, the "Products");
WHEREAS, Licensee wishes to issue, sell, market and promote additional
financial products as described in Schedule A hereto (the "Dow 5 Tech Funds")
based on a strategy related to the Dow Xxxxx Industrial AverageSM, and Dow Xxxxx
is willing to grant a license to use the Intellectual Property in connection
with the Dow 5 Tech Funds;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreement contained herein and in the License Agreement, it is
agreed as follows:
1. Subject to the terms and conditions of the License Agreement, Dow
Xxxxx hereby grants to Licensee a non-transferable non-exclusive license to use
and refer to the Dow Xxxxx Marks in connection with the issuance, sale,
marketing and promotion of the Dow 5 Tech Funds to indicate that the amounts
payable under the terms of the Dow 5 Tech Funds are calculated with reference to
the Dow 5 Tech Strategy (as defined in Schedule A hereto) and that Dow Xxxxx is
the source of the Dow Xxxxx Industrial Average, and as may otherwise be required
by applicable laws, rules or regulations under the License Agreement and this
Amendment.
2. Except as otherwise expressly provided herein, all terms and
conditions of the License Agreement that apply to the Products shall apply
equally to the Dow 5 Tech Funds.
3. In consideration for the license granted under this Amendment,
Licensee shall pay to Dow Xxxxx the license fees set forth in Schedule B hereto.
Notwithstanding anything to the contrary in this Amendment, Licensee shall pay
to Dow Xxxxx the Dow 5 Tech Fund Annual Minimum Payment (as defined in Schedule
B hereto) with respect to the initial Dow 5 Tech Fund upon signing of this
Amendment.
4. For the avoidance of doubt, the parties hereby acknowledge and agree
that the Products under the License Agreement (i) shall be registered under the
Investment Company Act of 1940 of the United States and (ii) shall not be traded
or listed on an Organized Securities Market. "Organized Securities Market" shall
mean a U.S. national securities exchange, an automated quotation or other
electronic trading system of a U.S.-registered securities association, a foreign
securities exchange or any other domestic or foreign securities market
determined by Dow Xxxxx in its reasonable judgment to constitute an Organized
Securities Market.
5. Except as expressly amended hereby, all provisions in the License
Agreement shall continue to remain in full force and effect.
6. Except as otherwise specified herein, all capitalized terms used in
this Amendment shall have the meaning ascribed to them in the License Agreement,
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to the License Agreement to be executed as of the date first set forth above.
DOW XXXXX & COMPANY, INC,
By:
-----------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: President, Dow Xxxxx Indexes
XXX XXXXXX FUNDS INC.
By:
-----------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
SCHEDULE A
PRODUCTS DESCRIPTION
The Dow 5 Tech Funds shall be investment funds that meet the following criteria:
(i) the investment objective of the funds is determined with reference to the
Dow 5 Tech Strategy; (ii) the funds are registered under the Investment Company
Act of 1940; and (iii) the funds are not listed or traded on an Organized
Securities Market. The "Dow 5 Tech Strategy" shall mean funds are invested (a)
50% in the five stocks in the Dow Xxxxx Industrial Average that have the highest
dividend yield as a percentage of their period-end stock prices and (b) 50% in
five other technology (as defined by Compustat's S&P Technology Sector
identifier) stocks. The initial Dow 5 Tech Fund shall be named the "Dow 5 & Tech
Strategic Trust".
SCHEDULE B
LICENSE FEES
Licensee shall pay license fees with respect to the Dow 5 Tech Funds in
accordance with the following:
On the Deposit Date (as defined below), and, during the Term, on each
anniversary of the Deposit Date, the Licensee will pay to Dow Xxxxx a
flat annual minimum payment of $20,000 in respect of the twelve-month
period commencing on the Deposit Date or such anniversary date, as the
case may be (each, a "Dow 5 Tech Fund Annual Minimum Payment").
In addition, during each Year (defined below) of the Term, the Licensee
will provide to Dow Xxxxx a written report (each, a "Quarterly Dow 5
Tech Fund Report"), within 10 days after the end of each Quarter (as
defined below), which sets forth (i) the asset balance for the Dow 5
Tech Funds at such Quarter-end, and (ii) a calculation of the Dow 5
Tech Fund 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 Licensee will pay (each, a "Dow 5 Tech Fund
Quarterly Payment") to the Dow Xxxxx affiliate designated by Dow Xxxxx
an amount equal to one quarter of the Dow 5 Tech Fund Basis Point
Amount (defined below); provided, however, that, in each year of the
Term, Licensee shall be entitled to apply a credit in an amount equal
to the Dow 5 Tech Fund Annual Minimum Payment against the aggregate of
the Dow 5 Tech Fund Quarterly Payments.
III. Additional Payment Terms:
------------------------
A. All amounts will be paid in cash and will be non-refundable.
B. 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).
C. The terms hereof shall be deemed "Confidential Information" under
the License Agreement.
IV. Definitions:
-----------
"Deposit Date" means the date on which a Dow 5 Tech Fund is deposited.
"Dow 0 Xxxx Xxxx Xxxxx Xxxxx Xxxxxx" means, at any time during a Year,
an amount equal to two basis points (.0002) on the then Rolling Average Asset
Balance.
"Dow 5 Tech Fund Rolling Average Asset Balance" means, at any
Quarter-end during a Year, the average assets in the Dow 5 Tech Funds in the
aggregate for the Quarter then ended, calculated by adding the asset balances
for the Dow 5 Tech Funds for the three months in such Quarter and dividing the
result by three.
"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.
"Year" means a twelve-month period commencing on Deposit Date or any
anniversary of the Deposit Date, as the case may be.
CONFIDENTIAL
AMENDMENT NO. 3 TO LICENSE AGREEMENT
This amendment ("Amendment") to the License Agreement dated September
8, 1998 between Dow Xxxxx & Company, Inc. ("Dow Xxxxx") Xxx Xxxxxx Funds, Inc.
(the "Licensee"), as amended under Amendment No. 1 dated December 1, 1999 and
Amendment No. 2 dated February 1, 2000 (together, the "License Agreement"), is
made effective as of September 8, 2003 ("Effective Date") by and between Dow
Xxxxx and the Licensee. Capitalized terms not defined herein have the meanings
ascribed to them in the License Agreement.
WHEREAS, Dow Xxxxx and the Licensee entered into the License Agreement,
as previously amended, which expired as of September 8, 2003 and the parties
would like to revive the License Agreement and extend the term of the License
Agreement on the terms and conditions set forth herein;
WHEREAS, Dow Xxxxx previously granted Licensee a license to use certain
intellectual property of Dow Xxxxx (as more fully defined in the License
Agreement, the "Intellectual Property") in connection with the issuance,
marketing and promotion of certain investment products (as more fully defined in
the License Agreement and amendments thereto, the "Products" and the "Dow 5 Tech
Funds");
WHEREAS, License wishes to issue, sell, market and promote additional
financial products as described in Schedule A hereto which is fully incorporated
herein (respectively, the "Select 10 Industrial Portfolio" and "Select 5
Industrial Portfolio") based on strategies related to the Dow Xxxxx Industrial
AverageSM, and Dow Xxxxx is willing to grant a license to use the Intellectual
Property in connection with the Select 10 Industrial Portfolio and the Select 5
Industrial Portfolio;
WHEREAS, Licensee wishes to consolidate payments for the Products, the Dow
5 Tech Funds and the Select 10 Industrial Portfolio and Select 5 Industrial
Portfolio;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and in the License Agreement, it is agreed as follows:
1. Subject to the terms and conditions of the License Agreement, Dow
Xxxxx hereby grants to Licensee a non-transferable, non-exclusive license to use
and refer to the Dow Xxxxx Marks, in connection with the issuance, sale,
marketing, and promotion of the Licensee's Select 10 Industrial Portfolio and
the Select 5 Industrial Portfolio to indicate that the respective amounts
payable under the terms of the Select 10 Industrial Portfolio and the Select 5
Industrial Portfolio are calculated with reference to the "Dogs of The Dow"
investment strategy (as defined in Schedule A hereto) and that Dow Xxxxx is the
source of the Dow Xxxxx Industrial Averagesm, and as may otherwise be required
by applicable laws, rules or regulations under the License Agreement.
2. In consideration for the license granted under the License
Agreement and this Amendment, Licensee shall pay Dow Xxxxx the license fees set
forth in Schedule B hereto which is fully incorporated herein.
3. Except as otherwise expressly provided herein, all terms and
conditions of the License Agreement that apply to the Products and the Dow 5
Tech Funds shall apply equally to the Licensee's Select 10 Industrial Portfolio
and the Select 5 Industrial Portfolio.
4. The term of the License Agreement is extended until December 31,
2004 (the "Initial Renewal Term"). At the end of the Initial Renewal 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. Dow Xxxxx shall have the right to modify the license fees
payable hereunder at the end of the Initial Renewal Term and each Renewal Term
thereafter 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.
5. Except as expressly modified by this Amendment, all other
provisions in the License Agreement shall continue to remain in full force and
effect. For purposes of clarity, all license fee provisions of any preceding
Schedule B to the License Agreement are hereby deleted and replaced with the
provisions of Schedule B to this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the License Agreement to be executed as of the Effective Date.
DOW XXXXX & COMPANY, INC.
By
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: President, Dow Xxxxx Indexes
Date: July 7, 2004
XXX XXXXXX FUNDS, INC.
By
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Director
Date: July 1, 2004
SCHEDULE A
The "Select 10 Industrial Portfolio" shall mean a unit investment trust
("UIT") that meets the following criteria: (i) the investment objective of the
UIT is determined with reference to the Dogs of The Dow investment strategy;
(ii) the UIT is registered under the Investment Company Act of 1940; and (iii)
the UIT's units are not listed or traded on an Organized Securities Market. The
"Dogs of The Dow" strategy shall mean funds are invested in the ten stocks
included in the Dow Xxxxx Industrial Average that have the highest dividend
yield as a percentage of their period-end stock price (the "High Yield Stocks").
These investments are held for a specified period of time, after which they are
replaced by investments in the next set of High-Yield Stocks.
The "Select 5 Industrial Portfolio" shall mean a UIT that meets the
following criteria: (i) the investment objective of the unit investment trust is
determined with reference to Dogs of The Dow investment strategy except that the
Select 5 Industrial Portfolio shall invest in the five lowest-priced of the High
Yield Stocks; (ii) the UIT is registered under the Investment Company Act of
1940; and (iii) the UIT's units are not listed or traded on an Organized
Securities Market. These investments are held for a specified period of time,
after which they are replaced by investments in the next set of the five
lowest-priced of the High-Yield Stocks.
SCHEDULE B
LICENSE FEES
1. Upon execution of this Amendment, the Licensee will pay Dow Xxxxx
for the period of the Initial Renewal Term from September 8, 2003 until March
31, 2004, a pro-rated portion of Seventy Thousand Dollars ($70,000), which
amount represents the combined annual minimum payments for the Products and the
Dow 5 Tech Funds pro-rated for such portion of the Initial Renewal Term.
2. In addition, for the period of the Initial Renewal Term from
September 8, 2003 until March 31, 2004, the Licensee will provide to Dow Xxxxx a
written report (each, a "Quarterly Report"), for each Quarter (as defined below)
within that period, which sets forth (i) the combined asset balance for each
Product and Dow 5 Tech Fund at such Quarter-end, and (ii) a calculation of the
Rolling Average Asset Balance (defined below) at such Quarter-end. In addition,
upon execution of this Amendment, Licensee will pay for each Quarter during the
period of September 8, 2003 until March 31, 2004 (each, a "Quarterly Payment")
to the Dow Xxxxx affiliate designated by Dow Xxxxx an amount equal to one
quarter of the Basis Point Amount (defined below); provided, however, that,
Licensee shall be entitled to apply a credit in an amount equal to the pro-rated
annual minimum payment described in Section 1 of this Schedule B against the
aggregate of such Quarterly Payments until such credit is depleted.
3. Upon execution of this Amendment, the Licensee will pay Dow Xxxxx
for the period of the Initial Renewal Term from April 1, 2004 until December 31,
2004, a pro-rated portion of Seventy Five Thousand Dollars ($75,000), which
amount represents the combined annual minimum payments for the Products, the Dow
5 Tech Funds, the Select 10 Industrial Portfolio and the Select 5 Industrial
Portfolio pro-rated for such portion of the Initial Renewal Term.
4. In addition, for the period of the Initial Renewal Term from April
1, 2004 until December 31, 2004, the Licensee will provide to Dow Xxxxx a
Quarterly Report within ten (10) days after the end of each Quarter, which sets
forth (i) the combined asset balance for each Product, the Dow 5 Tech Fund, the
Select 5 Industrial Portfolio and the Select 10 Industrial Portfolio at such
Quarter-end, and (ii) a calculation of the Rolling Average Asset Balance at such
Quarter-end. Within ten (10) days after the end of each such Quarter during the
period of April 1, 2004 until December 31, 2004, the Licensee will pay a
Quarterly Payment to the Dow Xxxxx affiliate designated by Dow Xxxxx in an
amount equal to one quarter of the Basis Point Amount; provided, however, that,
Licensee shall be entitled to apply a credit in an amount equal to the pro-rated
annual minimum payment described in Section 3 of this Schedule B against the
aggregate of such Quarterly Payments for that period of the Initial Renewal Term
until such credit is depleted.
5. On the first day of a Renewal Term (January 1) and on each
anniversary thereof during a succeeding Renewal Term, the Licensee will pay Dow
Xxxxx a flat annual minimum payment equal to Seventy Five Thousand Dollars
($75,000) for the twelve-month period commencing on the first day of the Renewal
Term or any anniversary thereof, as the case may be (each, an "Annual Minimum
Payment").
6. During each Renewal Term, Licensee will provide to Dow Xxxxx a
Quarterly Report within ten (10) days after the end of each Quarter, which sets
forth (i) the combined asset balance for each Product, Dow 5 Tech Fund, the
Select 5 Industrial Portfolio and the Select 10 Industrial Portfolio at such
Quarter-end, and (ii) a calculation of the Rolling Average Asset Balance
(defined below) at such Quarter-end. Within ten (10) days after the end of each
Quarter during each Renewal Term, the Licensee will pay a Quarterly Payment to
the Dow Xxxxx affiliate designated by Dow Xxxxx in an amount equal to one
quarter of the Basis Point Amount; provided however, that during each Renewal
Term, Licensee shall be entitled to apply a credit in an amount equal to the
Annual Minimum Payment against the aggregate of the Quarterly Payments for that
Renewal Term until such credit is depleted.
7. All amounts will be paid in cash 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).
8. The terms hereof shall be deemed "Confidential Information" under the
License Agreement.
9. Definitions:
"Basis Point Amount" means, at any time during a Year, an
amount equal to two basis points (.0002) 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, as the case may be,
and each succeeding three-month period during the Initial Renewal Term
or Renewal Term except that for the Initial Renewal Term only, the
first "Quarter" of the Initial Renewal Term means the period from
September 8, 2003 until December 31, 2003.
"Rolling Average Asset Balance" means, at any Quarter-end
during a Year of the Initial Renewal Term until March 31, 2004, the
average aggregate assets in the Products and the Dow 5 Tech Funds for
the Quarter then ended, calculated by adding the asset balances for the
Products and the Dow 5 Tech Funds for the three months in such Quarter
and then dividing the result by three. "Rolling Average Asset Balance"
means, at any Quarter-end during a Year of the Initial Renewal Term
after April 1, 2004 or during a Renewal Term, the average aggregate
assets in the Products, the Dow 5 Tech Funds, the Select 5 Industrial
Portfolio and the Select 10 Industrial Portfolio for the Quarter then
ended, calculated by adding the asset balances for the Products, the
Dow 5 Tech Funds, the Select 5 Industrial Portfolio and the Select 10
Industrial Portfolio for the three months in such Quarter and then
dividing the result by three.
"Year" means a twelve-month period commencing on the first day
of a Renewal Term (January 1) or any succeeding Renewal Term, as the
case may be. For the Initial Renewal Term only, "Year" means the period
commencing September 8, 2003 and ending December 31, 2004.
AMENDMENT NO. 1 TO LICENSE AGREEMENT DATED MAY 3, 2004
This Amendment No. 1 to the License Agreement dated May 3, 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, (such license agreement is
referred to herein as the "License Agreement") is made this January 3, 2005 by
and between Xxxxxxx, Horizon and Xxx Xxxxxx.
WHEREAS, pursuant to the License Agreement, Xxxxxxx and Horizon have
previously granted Xxx Xxxxxx a license to use and refer to certain Property (as
defined in the License Agreement) in connection with the issuance, management,
sale, marketing and/or promotion of certain Trusts (as defined in the License
Agreement);
WHEREAS, Xxx Xxxxxx wishes to establish additional financial products
as described in Schedule A hereto (the "Multi-Strategy Trusts") and Xxxxxxx and
Horizon are willing to grant a license to use the Property in connection with
the Multi-Strategy Trusts;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and in the License Agreement and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Subject to the terms and conditions of the License Agreement,
Xxxxxxx and Horizon hereby grant to Xxx Xxxxxx and the Multi-Strategy Trusts an
Exclusive (as defined in the License Agreement) license to use and refer to the
Property, with prior approval from Horizon, in connection with the
Multi-Strategy Trusts to indicate that the amounts payable with respect to the
Multi-Strategy Trusts are calculated with reference to a Strategy (as defined in
Schedule A hereto).
2. 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
Schedule B hereto.
3. Except as otherwise expressly provided herein, all terms and
conditions of the License Agreement that apply to the Trusts shall apply equally
to this Amendment and to the Multi-Strategy Trusts and, except as expressly
amended hereby, all provisions in the License Agreement shall continue to remain
in full force and effect.
4. Except as otherwise specified herein, all capitalized terms used in
this Amendment shall have the meaning ascribed to them in the License Agreement.
5. This Amendment 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 caused this Amendment No. 1
to the License Agreement to be executed as of the date first set forth above.
XXX XXXXXX FUNDS INC.
By
Name_____________________________________________________
Title____________________________________________________
XXXXXXX X. XXXXXXX
HORIZON INVESTMENT SERVICES, LLC
By
Name_____________________________________________________
Title____________________________________________________
SCHEDULE A
MULTI-STRATEGY TRUST DESCRIPTION
A "Multi-Strategy Trust" is a unit investment trust that initially
invests a portion of its assets in securities selected in accordance with a
Strategy (among other securities selected according to investment criteria not
based on the Property of Xxxxxxx or Horizon).
"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.
SCHEDULE B
SUBLICENSE FEES FOR MULTI-STRATEGY TRUSTS
Xxx Xxxxxx shall pay license fees in accordance with the following:
During each Year (defined below) of the Term, Xxx Xxxxxx will provide
to Horizon a written report (each, a "Multi-Strategy Trust Quarterly Report"),
within 10 days after the end of each Quarter (defined below), which sets forth
(i) the asset balance for the Multi-Strategy Trusts at such Quarter-end, and
(ii) a calculation of the Multi-Strategy Trust 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, Xxx Xxxxxx will pay (each, a
"Multi-Strategy Trust Quarterly Payment"), to Horizon, an amount equal to
one-quarter of the Multi-Strategy Trust 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:
"Multi-Strategy Trust Basis Point Amount" means, at any time during a
Year, an amount equal to eight (8) basis points (.08%) on the then
Multi-Strategy Trust Rolling Average Asset Balance multiplied by the Strategy
Ratio.
"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.
"Multi-Strategy Trust Rolling Average Asset Balance" means, at any
Quarter-end during a Year, the average assets in the Multi-Strategy 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 Multi-Strategy
Trusts for such months and dividing the result by the number of such months.
"Strategy Ratio" means the portion of the initial assets in a
Multi-Strategy Trust invested in accordance with a Strategy as a percentage of
all assets in such Multi-Strategy Trust at the time of the creation of such
Multi-Strategy Trust.
"Year" means a twelve-month period commencing on the Effective Date or
on any anniversary of the Effective Date.
AMENDMENT NO. 1 TO SUBLICENSE AGREEMENT DATED MAY 3, 2004
This Amendment No. 1 to the Sublicense Agreement dated May 3, 2004 by
and between Xxx Xxxxxx Funds Inc., on behalf of itself and certain unit
investment trusts, ("Sublicensee"), Dow Xxxxx & Company, Inc. ("Licensor"), and
Horizon Investment Services, LLC ("Sublicensor") (such sublicense agreement is
referred to herein as the "Sublicense Agreement") is made this January 11, 2005
by and between Sublicensee, Licensor and Sublicensor.
WHEREAS, pursuant to the Sublicense Agreement, Sublicensor has
previously granted Sublicensee a sublicense to use and refer to 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);
WHEREAS, Sublicensee wishes to issue, manage, sell, market and/or
promote additional financial products as described in Schedule A hereto (the
"Multi-Strategy Products") based in part on a strategy related to the Dow Xxxxx
Industrial AverageSM, and Sublicensor is willing to grant a license to use the
Intellectual Property in connection with the Multi-Strategy Products;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and in the Sublicense Agreement and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Subject to the terms and conditions of the Sublicense Agreement,
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 Multi-Strategy
Products to indicate that the amounts payable with respect to the Multi-Strategy
Products are calculated with reference to the Strategy (as defined in Schedule A
hereto) that is based on the Dow Xxxxx Industrial Average and that Licensor is
the source of the Dow Xxxxx Industrial Average.
2. In consideration for the license granted under this Amendment,
Sublicensee shall pay to Sublicensor the license fees set forth in Schedule B
hereto.
3. Except as otherwise expressly provided herein, all terms and
conditions of the Sublicense Agreement that apply to the Products shall apply
equally to this Amendment and to the Multi-Strategy Products and, except as
expressly amended hereby, all provisions in the Sublicense Agreement shall
continue to remain in full force and effect.
4. Except as otherwise specified herein, all capitalized terms used in
this Amendment shall have the meaning ascribed to them in the Sublicense
Agreement.
5. This Amendment 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 caused this Amendment No. 1
to the Sublicense Agreement to be executed as of the date first set forth above.
XXX XXXXXX FUNDS INC.
BY:
NAME:____________________________________________________
TITLE:___________________________________________________
HORIZON INVESTMENT SERVICES, LLC
BY:
NAME:____________________________________________________
TITLE:___________________________________________________
DOW XXXXX & COMPANY, INC.
BY:
NAME:____________________________________________________
TITLE:___________________________________________________
SCHEDULE A
MULTI-STRATEGY PRODUCT DESCRIPTION
A "Multi-Strategy Product" is an investment that is (a) a unit investment trust
registered under the Investment Company Act of 1940, (b) the investment
portfolio of which is selected in part based on a Strategy (among other
securities selected according to investment criteria not based on the
Intellectual Property of Licensor) and (c) that is 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:
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.
The name of the Multi-Strategy Products shall be subject to Licensor's prior
written approval.
SCHEDULE B
SUBLICENSE FEES FOR MULTI-STRATEGY PRODUCTS
Sublicensee shall pay license fees in accordance with the following:
During each Year (defined below) of the Term, the Sublicensee will provide
to Sublicensor and Licensor a written report (each, a "Multi-Strategy
Product Quarterly Report"), within 10 days after the end of each Quarter
(defined below), which sets forth (i) the asset balance for each
Multi-Strategy Product at such Quarter-end, and (ii) a calculation of the
Multi-Strategy Product 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 "Multi-Strategy Product
Quarterly Payment"), to the Sublicensor, an amount equal to one-quarter of
the Multi-Strategy Product 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:
"Multi-Strategy Product Basis Point Amount" means, at any time during a
Year, an amount equal to two (2) basis points (.02) on the then Multi-Strategy
Product Rolling Average Asset Balance multiplied by the Strategy Ratio.
"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.
"Multi-Strategy Product Rolling Average Asset Balance" means, at any
Quarter-end during a Year, the average assets in the Multi-Strategy 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 Multi-Strategy
Products for such months and dividing the result by the number of such months.
"Strategy Ratio" means the portion of the initial assets in a
Multi-Strategy Product invested in accordance with a Strategy as a percentage of
all assets in such Multi-Strategy Product at the time of the creation of such
Multi-Strategy Product.
"Year" means a twelve-month period commencing on the Effective Date or
on any anniversary of the Effective Date.
AMENDMENT NO. 1 TO LICENSE AND CONSULTING AGREEMENT
This Amendment No. 1 to the License and Consulting Agreement dated
February 1, 1999 by and between Lightstone Capital Management LLC ("LCM") and
Xxxx Xxxxxx Xxxxxxxx Inc., now known as Xxxxxx Xxxxxxx XX Inc., ("DWR") (such
agreement is referred to herein as the "Agreement") is made this January 3, 2005
by and between LCM and DWR.
WHEREAS, pursuant to the Agreement, LCM has previously granted DWR a
license to benefit from and use any Substrategy (as defined in the Agreement)
for use in a UIT and LCM has previously agreed to provide certain consulting
services in connection with LCM Trusts (as defined in the Agreement);
WHEREAS, DWR desires to license the right to benefit from and use any
Substrategy (as defined in the Agreement) for use in additional UITs and to have
LCM provide certain consulting services in connection with additional UITs; and
WHEREAS, LCM desires to grant DWR a license to benefit from and use any
Substrategy (as defined in the Agreement) for use in such additional UITs and to
provide such consulting services in connection with additional UITs;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions contained herein and in the Agreement and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Section I, Paragraph 6 shall be replaced in its entirety with the
following:
"LCM Trust" is a Unit Investment Trust that is based upon, or
uses a Substrategy and/or the consulting service of LCM in the
selection of all or a portion of the securities in its
Portfolio and the units of which are offered and sold by DWR,
its Affiliates or any of their sub-licensees.
2. Section IX, Paragraph 2 shall be replaced in its entirety with
the following:
DWR, its Affiliates or their sub-licensees as the case may be,
or the LCM Trust shall pay LCM a fee equal to the Substrategy
Ratio multiplied by fifteen basis points (0.15%) of the total
value of the net assets deposited in the LCM Trust, at the
time of deposit, at the end of the primary offering period
(the "Deposit Fee"). For purposes of this Paragraph and
Section IX, Paragraph 3, the term "Substrategy Ratio" means
the portion of the initial assets in a LCM Trust selected by
applying a Substrategy as a percentage of all assets in such
LCM Trust at the time of the creation of such LCM Trust."
3. Section IX, Paragraph 3 shall be replaced in its entirety with
the following:
DWR, its Affiliates or their sub-licensees as the case may be,
or the LCM Trust shall pay LCM a fee equal to the Substrategy
Ratio multiplied by ten basis points (0.10%) of the total
value of the net assets deposited in the LCM Trust, at the
time of the move, moved by unit holders from one LCM Trust to
another LCM Trust (a "Rollover"), which assets shall be
excluded from the net assets for purposes of determining the
Deposit Fee.
4. Except as otherwise expressly provided herein, all terms and
conditions of the Agreement shall apply equally to this Amendment and, except as
expressly amended hereby, all provisions in the Agreement shall continue to
remain in full force and effect.
5. Except as otherwise specified herein, all capitalized terms used in
this Amendment shall have the meaning ascribed to them in the Agreement.
6. This Amendment 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 caused this Amendment No. 1
to the Agreement to be executed as of the date first set forth above.
LIGHTSTONE CAPITAL MANAGEMENT, LLC
By
Name_____________________________________________________
Title____________________________________________________
XXXXXX XXXXXXX XX INC.
By
Name_____________________________________________________
Title____________________________________________________
