Exhibit (h)(3)
DISTRIBUTION SERVICES AGREEMENT
AGREEMENT made as of September 30, 2005 by and between The Xxxxxx Group
(the "Adviser"), and BISYS Fund Services Limited Partnership (the
"Distributor").
WHEREAS, the Adviser (including for purposes hereof its separate asset
management divisions and subsidiaries) serves as investment adviser for Giant 5
Funds Trust Company (the "Company"), an open-end investment company 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 Company currently in effect (the "Distribution Agreement"), the Distributor
acts as the principal underwriter and distributor of shares of the portfolios of
the Company (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 and reimburse the Distributor to the extent
that the Funds are not authorized to so compensate and reimburse 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 and
reimbursement of the expenses 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 and reimburse the
Distributor in full in accordance with the Distribution Agreement, the Adviser
shall compensate and reimburse the Distributor to the extent that the Funds are
not so authorized, but only to the extent such compensation and reimbursement do
not constitute a violation of the Act or rules or regulations thereunder.
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 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;
(ii) the contractual advisory fees that the Adviser charges the
Company do not contain any component for the purpose of paying for fund
distribution; and
(iii) this Agreement will be disclosed to the Board of Trustees or
Directors, as applicable, of the Company (the "Board") promptly after the date
of this Agreement, and the Adviser has provided or will promptly provide 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
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approval of the arrangements contemplated hereunder, including any amounts
expended by the Adviser hereunder.
(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 wholesalers and other personnel with day to
day job responsibilities that are substantially dedicated to the activities
(including wholesaling activities) to be performed on behalf of the Adviser and
the Company (collectively, the "Distributor-employed Distribution Services
Personnel"). With respect to any individuals who are not employed by the
Distributor, but who are registered by the Distributor on Form U-4 in order for
such individuals ("non-Distributor-employed Distribution Services Personnel",
and together with the Distributor-employed Distribution Services Personnel
(whether or not internal or external), collectively, the "Distribution Services
Personnel") to perform activities (including wholesaling activities) on behalf
of the Adviser and the Company, the Distributor shall have the following rights
exercisable at any time within its sole discretion: (i) to terminate the
registration by filing Form U-5 or such other necessary and appropriate
documents; (ii) to take disciplinary action, including, without limitation,
making reports to regulatory bodies and authorities; (iii) to seek damages for
actions taken or omissions of the non-Distributor-employed Distribution Services
Personnel; (iv) to receive information (including, without limitation, reports
and certifications) from the Adviser's Code Compliance Officer and/or Chief
Compliance Officer regarding the non-Distributor-employed Distribution Services
Personnel's compliance with the Adviser's Code of Ethics; and (v) to receive
periodic certification from the non-Distributor-employed Distribution Services
Personnel regarding his or her compliance with the manuals and policies of the
Distributor. In addition, the Adviser shall provide the Distributor with, and
the Distributor shall have the right to receive, copies of any reports,
complaints, documents or inquiries relating to the performance of the
non-Distributor-employed Distribution Services Personnel, and any information
that would affect the non-Distributor-employed Distribution Services Personnel's
status of, or information on, his or her Form U-4 registration. For avoidance of
confusion, it is expressly agreed and understood that all Distribution Services
Personnel, whether or not Distributor-employed Distribution Services Personnel
or non-Distributor-employed Distribution Services Personnel, are considered
"Wholesaling Personnel" for purposes of the Distribution Agreement, and the
Distributor shall be entitled to be compensated and reimbursed with respect to
such Distribution Services Personnel, in accordance with the Distribution
Agreement.
(b) Subject to Section 7(a), the Distributor shall not be liable to the
Adviser or the Company 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 other than the Distribution Services Personnel) 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
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disregard by the Distributor of its express obligations and duties hereunder
and/or the Distribution Agreement.
(c) NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE CONTRARY, UNDER
NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR SIMILAR DAMAGES, INCLUDING LOST
REVENUE, LOST PROFITS OR LOST OR DAMAGED DATA, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES.
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 000 Xxxxx Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxx Xxxxxxx, XX 00000, Attn: President; and if to Distributor,
to it at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attn: Broker Dealer
Chief Compliance Officer, with a copy to BISYS Distribution Services, 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attn: 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.
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.
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(e) No amendment to this Agreement shall be valid unless made in writing
and executed by both parties hereto.
(f) The Adviser acknowledges that certain FRC publications referred to in
the Distribution Agreement may be provided only to parties that have entered
into a written agreement or addendum that sets forth the terms of use of such
publications and the associated fee. The Distribution Agreement provides that
the Company will notify the Distributor whether the Company or the Adviser or
both will enter into such an agreement or addendum. The Adviser acknowledges
that if only one of the Company or the Adviser enters into such agreement or
addendum, the other party will be prohibited from receiving or using such
publications.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE XXXXXX GROUP BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS FUND SERVICES, INC.,
its General Partner
By: By:
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Name: Name:
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Title: Title:
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