Exhibit (e)(5)
DISTRIBUTION SERVICE AGREEMENT II
AGREEMENT made this 2nd day of September, 2003, between Black Diamond
Asset Management LLC ("BDAM") and ALPS Distributors, Inc. ("ALPS").
WHEREAS, BDAM serves as investment adviser to Black Diamond Funds (the
"Trust"), a Delaware business trust registered under the Investment Company Act
of 1940 (the "Act") as an open-end investment company, and ALPS serves as
distributor of shares of beneficial interest of each series of the Trust
identified in APPENDIX A, as may be amended from time to time (each a "Series,"
collectively the "Series");
WHEREAS, the Trust has adopted a distribution plan pursuant to Rule 12b-1
of the Act (the "Distribution Plan") with respect to the shares of beneficial
interest of each Series ("Shares") that authorizes ALPS to pay fees to
broker-dealers and other institutions for providing distribution-related
services in connection with the distribution of Shares;
WHEREAS, ALPS desires that BDAM perform certain distribution-related
activities with respect to the Series and BDAM is willing to perform those
services on the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, for and in consideration of the representations, covenants
and agreements contained herein and other valuable consideration, the
undersigned parties do hereby agree as follows:
SECTION 1. DISTRIBUTION-RELATED ACTIVITIES
BDAM may provide one or more of the following services:
(a) handling selling broker inquiries regarding the Trust;
(b) handling shareholder inquiries regarding the Trust (E.G., responding
to questions concerning investments in the Trust, capital account
balances and reports and tax information provided by the Trust);
(c) assisting in the enhancement of relations and communications between
shareholders and the Trust;
(d) assisting in the establishment and maintenance of shareholder
accounts with the Trust;
(e) assisting in the maintenance of Trust records containing shareholder
information;
(f) printing prospectuses, statements of additional information and
reports for other than existing shareholders;
(g) preparing, printing and distributing sales literature and
advertising materials;
(f) providing such other information and shareholder liaison services as
ALPS may reasonably request.
BDAM's appointment shall be nonexclusive, and ALPS may enter into similar
agreements with other persons.
SECTION 2. COMPENSATION
(a) As compensation for BDAM's activities with respect to the Series,
ALPS shall pay BDAM monthly fees on behalf of the Shares of each Series at a
maximum annual rate of 0.75% of the average daily net assets of the Shares (less
any fees retained by ALPS pursuant to any agreement with the Trust pursuant to
which ALPS serves as the Trust's principal underwriter), or such other amount as
may be agreed upon between the parties as set forth in Appendix A hereto (the
"Payments").
(b) The Payments shall be accrued and paid monthly or at such other
interval as ALPS and BDAM shall agree.
(c) On behalf of the Trust, BDAM may spend such amounts and incur such
expenses as it deems appropriate or necessary on any distribution-related
activities. Such expenses may include any expenses primarily intended to result
in the sale of the shares of the Series, including but not limited to,
compensation to employees, compensation to and expenses, including overhead and
telephone another communication expenses, of BDAM, the printing of prospectuses,
statements of additional information and reports for other than existing
shareholders, and the preparation, printing and distribution of sales literature
and advertising materials, and any costs, including interest expense, of
financing the compensation paid to dealers for selling shares of the Series.
BDAM shall be solely liable for any expenses it incurs.
SECTION 3. REPRESENTATIONS OF BDAM
BDAM represents that:
(a) the compensation payable to it under this Agreement will not result
in an excessive fee to BDAM;
(b) the performance of all its obligations hereunder will comply with
all applicable laws and regulations, including any applicable state and federal
securities laws and self-regulatory organization regulations, the provisions of
its charter documents and bylaws and all material contractual obligations
binding upon BDAM; and
(c) it will promptly inform ALPS of any change in applicable laws or
regulations (or interpretations thereof) or in its charter or bylaws or material
contracts that would prevent or impair full performance of any of its
obligations hereunder.
SECTION 4. TRUST LITERATURE
BDAM is not authorized to make any representations concerning shares of
the Series except those contained in the appropriate then current prospectus and
statement of additional information ("SAI") and printed information issued by
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the Trust. BDAM shall have no responsibility with regard to the accuracy or
completeness of any of the printed information furnished by the Trust and shall
be held harmless by the Trust from and against any cost or loss arising
therefrom.
SECTION 5. REPORTS
BDAM shall prepare and furnish to the Trust, at the request of the Trust
or ALPS, written reports identifying the activities performed by BDAM and
setting forth such other information as the Trust or ALPS shall reasonably
request.
SECTION 6. INDEMNIFICATION
BDAM agrees to indemnify and hold harmless the Trust and ALPS from any
claims, expenses, or liabilities incurred by the Trust and ALPS as a result of
any act or omission of BDAM in connection with its services under this
Agreement, except such acts or omissions in reliance upon or relative to printed
materials supplied by the Trust or ALPS.
SECTION 7. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall not take effect with respect to any Series
unless it first has been approved by votes of a majority of both (a) the
Trustees and (b) those Trustees who are not interested persons of the Series and
have no direct or indirect financial interest in the operation of this Agreement
("Independent Trustees"), cast in person at a meeting called for the purpose of
voting on such approval; and until the Trustees who approve the Agreement's
taking effect with respect to such Series shares have reached the conclusion
required by Rule 12b-1(e) under the Act.
(b) This Agreement shall continue in full force and effect for so long
as such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in Section 7(a).
(c) This Agreement may be terminated as follows:
(i) automatically in the event of the termination of the
Distribution Plan;
(ii) automatically in the event of the assignment of this
Agreement as defined in the Act; and
(iii) by either party to the Agreement without cause by giving
the other party at least sixty (60) days' written notice of
its intention to terminate.
SECTION 8. NOTICES
Any notice under this Agreement shall be in writing and shall be addressed
and delivered, or mailed postage prepaid, to the other party's principal place
of business, or to such other place as shall have been previously specified by
written notice given to the other party. Notices, requests, instructions and
communications received by the parties at their respective principal places of
business, or at such other address as a party may have designated in writing,
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shall be deemed to have been properly given.
SECTION 9. AMENDMENTS
This Agreement may be amended by the parties at any time, subject to
approval in the manner required by Section 7(a).
SECTION 10. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party
for consequential damages under any provision of this Agreement.
(b) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(c) This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject matter
hereof, whether oral or written.
(d) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument. .
(e) 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 the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid. This Agreement shall be construed as if drafted jointly, by both ALPS
and BDAM and no presumptions shall arise favoring any party by virtue of
authorship of any provision of this Agreement.
(f) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(g) Nothing contained in this Agreement is intended to or shall require
the parties to perform any functions or duties on any day other than a Trust
business day. Functions or duties normally scheduled to be performed on any day,
which is not a Trust business day shall be performed on, and as of, the next
Trust business day, unless otherwise required by law.
(h) No affiliated person, employee, agent, director, office or manager
of the Trust shall be liable at law or in equity for the Trust's obligations
under this Agreement.
(i) Each of the undersigned warrants and represents that it has full
power and authority to sign this Agreement on behalf of the party indicated and
that its signature will bind the party indicated to the terms hereof. Each party
hereto warrants and represents that this Agreement, when executed and delivered,
will constitute a legal, valid and binding obligation of the party, enforceable
against the party in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting the rights and remedies of creditors and secured parties.
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(j) The terms "affiliated person" and "assignment" shall have the
meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
ALPS DISTRIBUTORS, INC.
By:
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Name:
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Title:
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BLACK DIAMOND ASSET MANAGEMENT LLC
By:
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Member
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APPENDIX A TO THE
DISTRIBUTION SERVICE AGREEMENT
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SERIES SUBJECT TO THE AGREEMENT: COMPENSATION:
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SERIES II FUNDS (EFFECTIVE: SEPTEMBER 2, 2003):
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Black Diamond 500 Protected Growth Fund II Annual rate of 0.60% of the
Black Diamond 100 Protected Growth Fund II average daily net assets of the
Black Diamond 2000 Protected Growth Fund II Shares of each Series (less any
Black Diamond 400 Protected Growth Fund II fees retained by ALPS pursuant
Black Diamond Total Index Protected Growth to any agreement with the Trust
Fund II pursuant to which ALPS serves
Black Diamond LS Protected Growth Fund II as the Trust's principal
underwriter)
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Appendix Effective: September 2, 2003
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