DISTRIBUTION AGREEMENT
This AGREEMENT, dated July 16, 2009 between STARBOARD INVESTMENT
TRUST, a statutory trust organized under the laws of
the State of Delaware (the “Trust”) and CAPITAL INVESTMENT
GROUP, INC., a North Carolina corporation (the
“Distributor”).
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (“1940 Act”); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares
of beneficial interest (“Shares”) representing interests in a series of
securities and other assets, as identified in Appendix A (each a “Fund”);
and
WHEREAS, the Trust offers the Shares of such Fund and has registered (or
will register) the Shares under the Securities Act of 1933, as amended (“1933
Act”), pursuant to a registration statement on Form N-1A “Registration
Statement”), including a prospectus “Prospectus”) and a statement of additional
information(“SAI”); and
WHEREAS, the Trust has adopted a Plan of Distribution Pursuant to Rule
12b-1 under the 1940 Act (“Distribution Plan”) with respect to Shares of certain
classes of the Funds, and may enter into related agreements providing for the
distribution of such Shares; and
WHEREAS, Distributor has agreed to act as distributor of the Shares for
the term of this Agreement;
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NOW, THEREFORE, it is agreed between the parties hereto as
follows:
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1.
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Appointment of
Distributor.
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(a) The Trust appoints
Distributor its exclusive agent for the distribution of the Shares in
jurisdictions wherein such Shares may be legally offered for sale; provided,
however, that the Trust in its absolute discretion
may issue Shares in connection with (i) the payment or reinvestment of dividends
or distributions; (ii) any merger or consolidation of the Trust or of a Fund
with any other investment company or trust or any personal holding company, or
the acquisition of the assets of any such entity or another Fund of the Trust;
or (iii) any offer of exchange permitted by Section 11 of the 1940 Act, or any
other applicable provision.
(b) Distributor accepts
such appointment as exclusive agent for the distribution of the Shares and
agrees that it will sell the Shares as agent for the Trust at prices determined
as hereinafter provided and on the terms hereinafter set forth, all according to
applicable federal and state laws and regulations and to the Trust’s Declaration
of the Trust.
(c) Distributor may sell
Shares to or through qualified securities dealers or others. Distributor will
require each dealer or other such party to conform to the provisions hereof, the
Registration Statement and the Prospectus and SAI, and applicable law; and
neither Distributor nor any such dealers or others shall withhold the placing of
purchase orders for Shares so as to make a profit thereby.
(d) Distributor shall
order Shares from the Trust only to the extent that it shall have received
purchase orders therefor. Distributor will not make, or authorize any dealers or
others to make: (i) any short sales of Shares; or (ii) any sales of Shares to
any Trustee or officer of the Trust or to any officer or director of Distributor
or of any corporation or association furnishing
investment advisory, managerial, or supervisory services to the Trust, or
to any such corporation or association, unless such sales are made in accordance
with the then current Prospectus and SAI.
(e) Distributor is not
authorized by the Trust to give any information or make any representations
regarding the Shares of a Fund, except such information or representations as
are contained in the Registration Statement or in the current Prospectus or SAI
of the applicable Fund, or in advertisements and sales literature prepared by or
on behalf of the Trust for Distributor’s use.
(f) Notwithstanding any
provision hereof, the Trust may terminate, suspend, or withdraw the offering of
Shares of any Fund whenever, in its sole discretion, it deems such action to be
desirable.
2. Offering Price of
Shares. All Shares sold under this Agreement shall be
sold at the public offering price per Share in effect at the time of the sale,
as described in the then current Prospectus of the applicable Fund. The excess,
if any, of the public offering price over the net asset value of the Shares sold
by Distributor, as agent, shall be retained by Distributor as a commission for
its services hereunder. Out of such commission Distributor may allow commissions
or concessions to dealers and may allow them to others in its discretion in such
amounts as Distributor shall determine from time to time. Except as may be
otherwise determined by Distributor from time to time, such commissions or
concessions shall be uniform to all dealers. At no time shall the Trust receive
less than the full net asset value of the Shares, determined in the manner set
forth in the then current Prospectus and SAI for the applicable Fund.
Distributor shall also be entitled to such commissions and other fees and
payments as may be authorized by the Trustees of the Trust from time to time
under the Distribution Plan.
3. Furnishing of
Information. The Trust shall furnish to Distributor
copies of any information, financial statements, and other documents that
Distributor may reasonably request for use in connection with the sale of Shares
under this Agreement. The Trust shall also make available a sufficient number of
copies of each Fund’s current Prospectus and SAI for use by the
Distributor.
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4.
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Fees and
Expenses.
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(a) In addition to any
commissions, fees, or payments authorized by the Trustees under the Distribution
Plan, the Trust will pay or cause to be paid to the Distributor for services
provided and expenses assumed by the Distributor the fee of $5,000.00 per annum
per Fund. Such fee shall be paid to the Distributor in monthly installments.
(b) The Trust will also
pay or cause to be paid the following expenses: (i) preparation, printing, and
distribution to shareholders of the Prospectus and SAI for each Fund; (ii)
preparation, printing, and distribution of reports and other communications to
shareholders of each Fund; (iii) registration of the Shares under the federal
securities laws; (iv) qualification of the Shares for sale in certain states;
(v) qualification of the Trust as a dealer or broker under state law as well as
qualification of the Trust as an entity authorized to do business in certain
states; (vi) maintaining facilities for the issue and transfer of Shares; (vii)
supplying information, prices, and other data to be furnished by the Trust under
this Agreement; (viii) certain taxes applicable to the sale or delivery of the
Shares or certificates therefore, and (ix) such other compensation to the
Distributor as the Trustees may authorize, from time to time, in their sole
discretion.
(c) Except to the extent
such expenses are borne by the Trust pursuant to the Distribution Plan,
Distributor will pay or cause to be paid the following expenses: (i) payments to
sales representatives of the Distributor and to securities dealers and others in
respect of the sale of Shares; (ii) payment of compensation to and expenses of
employees of the Distributor and any of its affiliates to the extent they engage
in or support distribution of the Shares or render shareholder support services
not otherwise provided by the Trust’s transfer agent, administrator, or
custodian, including, but not limited to, answering routine inquiries regarding
each Fund, processing
shareholder transactions, and providing such other shareholder services
as the Trust may reasonably request; (iii) formulation and implementation of
marketing and promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine, and other mass media
advertising; (iv) preparation, printing, and distribution of sales literature
and of Prospectuses and SAIs and reports of the Trust for recipients other than
existing shareholders of a Fund; and (v) obtaining such information, analyses,
and reports with respect to marketing and promotional activities as the Trust
may, from time to time, reasonably request.
(d) If so requested by the
Trustees in connection with the Distribution Plan, Distributor shall prepare and
deliver reports to the Trustees of the Trust on a regular basis, at least
quarterly, showing the expenditures with respect to any Fund pursuant to the
Distribution Plan and the purposes therefor, as well as any supplemental reports
as the Trustees of the Trust, from time to time, may reasonably
request.
5. Repurchase of
Shares. Distributor as agent and for the account of
the Trust may repurchase Shares offered for resale to it and redeem such Shares
at their net asset value.
6. Indemnification by the
Trust. In absence of willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties hereunder on
the part of Distributor, the Trust agrees to indemnify Distributor and its
officers and partners against any and all claims, demands, liabilities, and
expenses that Distributor may incur under the 1933 Act, or common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or any Prospectus or SAI
of a Fund, or in any advertisements or sales literature prepared by or on behalf
of the Trust for Distributor’s use, or any omission to state a material fact
therein, the omission of which makes any statement contained therein misleading,
unless such statement or omission was made in reliance upon and in conformity
with information furnished to the Trust in connection therewith by or on behalf
of Distributor. Nothing herein contained shall require the Trust to take any
action contrary to any provision of its Agreement and Declaration of Trust or
any applicable statute or regulation.
7. Indemnification by
Distributor. Distributor agrees to indemnify the
Trust and its officers and Trustees against any and all claims, demands,
liabilities, and expenses that the Trust may incur under the 1933 Act, or common
law or otherwise, arising out of or based upon (i) any alleged untrue statement
of a material fact contained in the Registration Statement or any Prospectus or
SAI of any Fund, or in any advertisements or sales literature prepared by or on
behalf of the Trust for Distributor’s use, or any omission to state a material
fact therein, the omission of which makes any statement contained therein
misleading, if such statement or omission was made in reliance upon and in
conformity with information furnished to the Trust in connection therewith by or
on behalf of Distributor; or (ii) any act or deed of Distributor or its sales
representatives, or securities dealers and others authorized to sell Shares
hereunder, or their sales representatives, that has not been authorized by the
Trust in any Prospectus or SAI of any Fund or by this Agreement.
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8.
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Term and
Termination.
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(a) With respect to any
Fund, this Agreement shall become effective upon the commencement of operations
of the Fund. Unless terminated as herein provided, with respect to a Fund, this
Agreement shall continue in effect for two years from the date of the Fund’s
commencement of operations and, with respect to a Fund, shall continue in full
force and effect for successive periods of one year thereafter, but only so long
as each such continuance is approved (i) by either the Trustees of the Trust or
by vote of a majority of the outstanding voting securities (as defined in the
0000 Xxx) of the applicable Fund and, in either event, (ii) by vote of a
majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons (as defined in the 0000 Xxx) of any such party and who have
no direct or indirect financial interest in this Agreement or in the operation
of the Distribution Plan or in any agreement related thereto (“Independent
Trustees”), cast at a meeting called for the purpose of voting on such
approval.
(b) With respect to any
Fund, this Agreement may be terminated at any time without the payment of any
penalty by vote of the Trustees of the Trust or a majority of the Independent
Trustees or by vote of a majority of the outstanding voting securities (as
defined in the 0000 Xxx) of the applicable Fund or by Distributor, on sixty (60)
days’ written notice to the other party.
(c) This Agreement shall
automatically terminate in the event of its assignment (as defined in the 1940
Act).
9. Subcontract.
The Distributor may, at its expense and with the
approval of the Trustees, appoint another firm or company as its sub-distributor
or agent. The Distributor shall not, however, be relieved of any of its
obligations under this Agreement by the appointment of such sub-distributor or
agent.
10. Limitation of
Liability. The obligations of the Trust hereunder
shall not be binding upon any of the Trustees, officers, or shareholders of the
Trust personally, but shall bind only the assets and property of the Trust. The
term “Starboard Investment Trust” means and refers to the Trustees from time to
time serving under the Trust’s Declaration of Trust. The execution and delivery
of this Agreement has been authorized by the Trustees, and this Agreement has
been signed on behalf of the Trust by an authorized officer of the Trust, acting
as such and not individually, and neither such authorization by such Trustees
nor such execution and delivery by such officer shall be deemed to have been
made by any of them individually or to impose any liability on any of them
personally, but shall bind only the assets and property of the Trust as provided
in the Trust’s Declaration of Trust.
11. Books and
Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Distributor agrees that all records that it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust’s
request.
12. Notices.
Notices of any kind to be given to the Trust
hereunder by the Distributor shall be in writing and shall be duly given if
mailed or delivered to Starboard Investment Trust, Attn: Secretary, 000 X.
Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 or to such other address or to such
individual as shall be so specified by the Trust to the Distributor. Notices of
any kind to be given to the Distributor hereunder by the Trust shall be in
writing and shall be duly given if mailed or delivered to Capital Investment
Group, Inc., X.X. Xxx 0000, Xxxxx Xxxxx, XX 00000, or at such other address or
to such individual as shall be so specified by the Distributor to the Trust.
Notices shall be effective upon delivery.
13. Anti-Money
Laundering. The Distributor agrees to perform such
anti-money laundering (“AML”) functions with respect to the Shares as the Trust
may reasonably delegate to the Distributor from time to time or as the
Distributor is otherwise obligated to perform. In accordance with mutually
agreed procedures, the Distributor shall use commercially reasonable efforts in
carrying out such functions under the Trust’s AML program as it relates to a
Fund. It is understood and agreed that shareholders of the Funds are not
customers of the Distributor and the Trust and Funds retain legal responsibility
under the USA PATRIOT Act for AML compliance with respect to transactions in
Shares. The Distributor agrees to allow federal examiners having jurisdiction
over the Funds to obtain information and records relating to the Trust’s AML
program in its possession and to inspect the Distributor for purposes thereof.
14. Confidentiality. The Distributor agrees, on
behalf of itself and its officers, directors, agents, and employees, to treat as
confidential all records and other information relating to the Trust and its
prior, present, and future shareholders (“Confidential Information”) and not to
use or disclose the Confidential Information for any purpose other than in
performance of its responsibilities and duties under the Agreement.
Notwithstanding the forgoing, the Distributor may divulge the Confidential
Information (i) with the prior written consent of the Trust; (ii) when the
Distributor, in good faith, believes it may be exposed to civil or criminal
contempt proceedings
for failure to comply with court orders or when requested by duly
constituted governmental authorities or the Financial Industry Regulatory
Authority pursuant to their respective legal authority, upon prior written
notice to the Trust, unless prohibited by the court order or governmental
authority; (iii) to the Trust’s investment adviser(s), administrator, transfer
agent, custodian, outside legal counsel, or independent public accountants, in
the ordinary course of business, to the extent necessary for those service
providers to perform their respective services to the Trust; (iv) to the Trust,
when requested by the Trust; or (v) when requested by a shareholder, but only
with respect to Confidential Information that specifically relates to such
shareholder and the shareholder’s account. For purposes of this section, the
following records and other information shall not be considered Confidential
Information: any record or other information relating to the Trust and its
prior, present, and future shareholders (a) which is or becomes publicly
available through no negligent or unauthorized act or omission by the
Distributor; (b) which is disseminated by the Trust in a public filing with the
SEC or posted on the website of the Trust, the Funds, each Fund’s investment
adviser, or any of the Funds’ other service providers for general public review;
(c) which is lawfully obtained from third parties who are not under an
obligation of confidentiality to the Trust or its prior, present, and future
shareholders; or (d) previously known by the Distributor prior to the date of
the Agreement.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
By: /s/ Xxxx X.
Xxxxxxx
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Print Name: Xxxx X. Xxxxxxx
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Title:
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Chairman
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CAPITAL INVESTMENT
GROUP, INC.
By: /s/ Xxxxxxx X.
Xxxxxx
Print Name: Xxxxxxx X. Xxxxxx
Title: President
APPENDIX
A
SERIES OF THE TRUST
(each a “Fund”)
Updated:
February 18, 2010
Caritas
All-Cap Growth Fund
FMX
Growth Allocation Fund
FMX Total
Return Fund
GlobalAfrica
Equity Fund
GlobalAfrica
Infrastructure Fund
GlobalAfrica
Natural Resources Fund
GlobalAfrica
Income Fund
Presidio
Multi-Strategy Fund
WynnCorr
Value Fund
