EXHIBIT 99 (E)(2)
DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made this 14th day of June, 2005, by and between Signal
Capital Management, Inc., an Indiana corporation (the "Adviser"), and BISYS Fund
Services, Limited Partnership, an Ohio limited partnership (the "Distributor").
WHEREAS, the Adviser (including for purposes hereof its separate asset
management divisions and subsidiaries) serves as investment adviser for the
Signal Series of funds (each a "Fund" and collectively, the "Funds"), open-end
investment companies registered with the Securities and Exchange Commission
("SEC") under the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, pursuant to a distribution agreement between the Distributor
and the Funds currently in effect (the "Distribution Agreement"), the
Distributor acts as the principal underwriter and distributor of shares of the
Funds, which shares (the "Shares") are registered under the Securities Act of
1933, as amended; and
WHEREAS, in consideration of Distributor's agreement to provide certain
sales and marketing services as described in the Distribution Agreement, the
Adviser has agreed to compensate the Distributor to the extent that the Funds
are not authorized to so compensate the Distributor;
NOW THEREFORE, in consideration of the covenants hereinafter contained,
the Adviser and the Distributor agree as follows:
1. Services.
Distributor will provide the Funds and the Adviser with some or all of
the marketing and sales support services set forth in the Distribution
Agreement, as the parties agree from time to time.
2. Compensation and Expenses.
(a) The Distributor shall be entitled to receive the compensation set
forth in the Distribution Agreement, based on the services selected by Funds
and/or the Adviser from time to time.
(b) In accordance with the Distribution Agreement, Adviser hereby
agrees that, if the Funds are not authorized to compensate the Distributor in
full in accordance with the Distribution Agreement, the Adviser shall compensate
the Distributor to the extent that the Funds are not so authorized.
3. Term and Termination.
(a) This Agreement will become effective upon the date first set forth
above, will continue in effect throughout the term of the Distribution
Agreement, and will terminate automatically upon any termination of the
Distribution Agreement; provided, however, that,
notwithstanding such termination of the Distribution Agreement, the Adviser will
continue to pay to Distributor all fees to which Distributor is entitled
pursuant to the Distribution Agreement for services performed through such
termination date and any other fees payable upon such termination.
(b) This Agreement will terminate immediately and automatically in the
event the Distributor is expelled as a member of the NASD, and the Adviser may
terminate this Agreement immediately upon written notice in the event the
Distributor's NASD membership is suspended.
(c) In addition, either party may immediately terminate this Agreement
in whole or if the provision of services having substantially the character,
form and scope as those set forth hereunder becomes illegal or contrary to any
applicable law, or with the service and payment model remaining substantially as
reflected herein, a substantial risk that such a violation could occur would be
incurred.
(d) In addition, either party may immediately terminate this Agreement
if it has "Cause" to do so, which, for these purposes is defined as being
applicable if (i) the other party materially breaches this Agreement and the
breach is not remedied within thirty (30) days after the party wishing to
terminate gives the breaching party written notice of the breach; (ii) a final
judicial, regulatory or administrative ruling or order is made in which the
party to be terminated has been found guilty of criminal or unethical behavior
in the conduct of its business; or (iii) the other party makes an assignment for
the benefit of its creditors, files a voluntary petition under any bankruptcy or
insolvency law, becomes the subject of an involuntary petition under any
bankruptcy or insolvency law that is not dismissed within 60 days, or a trustee
or receiver is appointed under any bankruptcy or insolvency law for the other
party or its property.
4. Rights and Obligations of the Adviser and the Distributor.
The Adviser shall be responsible for the accuracy, completeness and
propriety of information concerning its organization and sales channels that the
Adviser furnishes to the Distributor in connection with the performance of the
Distribution Agreement.
5. Representations and Warranties.
(a) The Adviser represents and warrants the following:
(i) this Agreement has been duly authorized by the Adviser
and, when executed and delivered, will constitute a legal, valid and binding
obligation of the Adviser, enforceable against it in accordance with its terms
subject to bankruptcy, insolvency, reorganizations, moratorium and other laws of
general application affecting the rights and remedies of creditors and secured
parties, and
(ii) this Agreement has been disclosed to the Board of
Directors of the Funds (the "Board"), and the Adviser has provided all such
information to the Board as may be appropriate (or as has been requested by the
Board) in connection with the Board's review or approval of the arrangements
contemplated hereunder, including amounts expended by the Adviser hereunder.
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(b) The Distributor represents and warrants the following:
(i) it is presently a duly registered broker-dealer with the
NASD in good standing and covenants that it shall remain so registered and in
good standing for the duration of this Agreement, and shall immediately notify
the Adviser should the foregoing no longer be true during the term of this
Agreement;
(ii) the Distributor also represents and warrants that it is
in material compliance with all laws, rules and regulations applicable to it,
including but not limited to the rules and regulations promulgated by the NASD;
and
(iii) this Agreement has been duly authorized by the
Distributor and, when executed and delivered, will constitute a legal, valid and
binding obligation of the Distributor, enforceable against the Distributor in
accordance with its terms subject to bankruptcy, insolvency, reorganizations,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties.
6. Confidentiality.
During the term of this Agreement, the Distributor and the Adviser may
have access to confidential information relating to such matters as either
party's business, trade secrets, systems, procedures, manuals, products,
contracts, personnel, and clients. As used in this Agreement, "Confidential
Information" means information belonging to the Distributor or the Adviser which
is of value to such party and the disclosure of which could result in a
competitive or other disadvantage to either party, including, without
limitation, financial information, business practices and policies, know-how,
trade secrets, market or sales information or plans, customer lists, business
plans, and all provisions of this Agreement. Confidential Information includes
information developed by either party in the course of engaging in the
activities provided for in this Agreement, unless: (i) the information is or
becomes publicly known without breach of this Agreement, (ii) the information is
disclosed to the other party by a third party not under an obligation
confidentiality to the party whose Confidential Information is at issue of which
the party receiving the information should reasonably be aware, or (iii) the
information is independently developed by a party without reference to the
other's Confidential Information. Each party will protect the other's
Confidential Information with at least the same degree of care it uses with
respect to its own Confidential Information, and will not use the other party's
Confidential Information other than in connection with its duties and
obligations hereunder. Notwithstanding the foregoing, a party may disclose the
other's Confidential Information if (i) required by law, regulation or legal
process or if requested by any Agency; (ii) it is advised by counsel that it may
incur liability for failure to make such disclosure; (iii) requested to by the
other party; provided that in the event of (i) or (ii) the disclosing party
shall give the other party reasonable prior notice of such disclosure to the
extent reasonably practicable and reasonably cooperate with the other party (at
such other party's expense) in any efforts to prevent such disclosure.
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7. Limitation of Liability; Indemnification.
(a) The Distributor retains the general rights and responsibilities
associated with its employment of the Distribution Services Personnel. This
Agreement does not contemplate that any individuals become Distribution Services
Personnel, or become registered with the Distributor, who are not employed by
the Distributor and its affiliates.
(b) Subject to Section 7(a), the Distributor shall not be liable to the
Adviser or the Funds for any action taken or omitted by it in the absence of bad
faith, willful misfeasance, gross negligence or reckless disregard by it (or its
agents or employees) of its obligations and duties under this Agreement or the
Distribution Agreement. As long as the Distributor acts in good faith and
complies with laws and regulations applicable to it in connection with its
services hereunder and/or under the Distribution Agreement, the Adviser shall
indemnify and hold harmless the Distributor and its employees, agents, directors
and officers from and against, any and all claims, demands, actions and suits,
and from and against any and all judgments, liabilities, losses, damages, costs,
charges and reasonable counsel fees incurred in connection therewith
(collectively, "Losses") arising out of or related to the arrangement
contemplated under this Agreement and/or the Distribution Agreement, including
but not limited to all activities, actions and omissions of the Distribution
Services Personnel as registered representatives of the Distributor, except to
the extent that Losses result from (i) the Distributor's general
responsibilities as employer of Distribution Services Personnel, or (ii) the bad
faith, willful misfeasance, gross negligence or reckless disregard by the
Distributor of its express obligations and duties hereunder and/or the
Distribution Agreement.
8. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Adviser, to it at Xxx Xxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxxx, XX 00000, Attention: Xxxx Xxxxxxxx, President and if to
Distributor, to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention:
Broker Dealer Chief Compliance Officer, with a copy to BISYS Distribution
Services, 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President, or at
such other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
9. Assignment.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to a Fund by either of the parties hereto except by the
specific written consent of the other party. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
10. Governing Law.
This Agreement shall be governed by, and interpreted in accordance
with, the laws of the State of New York.
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11. Miscellaneous.
(a) Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(b) This Agreement constitutes the complete agreement of the parties
hereto as to the subject matter covered by this Agreement, and supersedes all
prior negotiations, understandings and agreements bearing upon the subject
matter covered by this Agreement.
(c) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if this Agreement
did not contain such part, term or provision.
(d) This Agreement may be executed in counterparts, each of which shall
be an original but all of which, taken together, shall constitute one and the
same agreement.
(e) No amendment to this Agreement shall be valid unless made in
writing and executed by both parties hereto.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SIGNAL CAPITAL MANAGEMENT, INC. BISYS FUND SERVICES, LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc., its
general partner
By: By:
----------------------------------------- -------------------------------------
Name: Name:
Title: Title:
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