DISTRIBUTION AGREEMENT
BETWEEN
INVESTBIO OPPORTUNITY TRUST
AND
INVESTPRIVATE, INC.
THIS AGREEMENT dated as of June 25, 2002, by and between INVESTBIO
OPPORTUNITY TRUST, a Delaware business trust (the "Trust"), with respect to
the series of beneficial interest set forth on Appendix A to this Agreement
(the "Fund"), and INVESTPRIVATE, INC., a Delaware corporation (the
"Distributor").
WHEREAS, the Trust wishes to retain the Distributor as principal
underwriter in connection with the offering and sale of shares of the Fund and
the Distributor is willing to accept such appointment to furnish such services
on the terms and conditions hereinafter; and
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. The Trust on behalf of the Fund hereby appoints the Distributor
and such affiliates of the Distributor that enter into similar agreements as its
exclusive agents for the sale of shares of the Fund to the public directly
and/or through investment dealers and financial institutions.
2. The Trust shall not sell any shares of the Fund except through one
of its agents and under the terms and conditions set forth in paragraph 4 below.
As used in this Agreement, the term "Registration Statement" shall mean the
currently effective registration statement of the Fund, and any supplements
thereto, under the Securities Act of 1933, as amended (the "1933 Act"), and the
Investment Company Act of 1940, as amended (the "1940 Act").
3. The Distributor hereby accepts appointment as agent for the sale
of the shares of the Fund and agrees that it will use its best efforts to sell
such shares; provided, however, that:
(a) the Distributor may, and when requested by the Trust on behalf
of the Fund shall, suspend its efforts to effectuate such sales at any time
when, in the opinion of the Distributor or of the Trust, no sales should be made
because of market or other economic considerations or abnormal circumstances of
any kind; and
(b) the Trust may withdraw the offering of the shares of the Fund
(i) at any time with the consent of the Distributor, or (ii) without such
consent when so required by the provisions of any statute or of any order, rule
or regulation of any governmental body having jurisdiction. It is mutually
understood and agreed that the Distributor does not undertake to sell any
specific amount of the shares of the Fund. The Trust shall have the right to
specify minimum amounts for initial and subsequent orders for the purchase of
shares of the Fund.
4. (a) The public offering price of the shares of the Fund (the
"offering price") shall be the net asset value plus a sales charge, if any. Net
asset value per share shall be determined in accordance with the provisions of
the Registration Statement.
(b) As compensation for its services under this Agreement, the
Distributor shall receive from the Trust a 12b-1 fee, at the rate and under the
terms and conditions of the distribution plan adopted by the Trust on behalf of
the Fund pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plan"), as such
Plan is amended from time to time, and subject to any further limitations on
such fee as the Board of Trustees may impose.
(c) As compensation for its activities under this Agreement with
respect to the distribution of shares, the Distributor shall retain the initial
sales charges, if any, on purchases of the shares as set forth in the
Registration Statement. The Distributor is authorized to collect the gross
proceeds derived from the sale of the shares, remit the net asset value thereof
to the Trust upon receipt of the proceeds and retain the initial sales charge,
if any.
(d) As compensation for its activities under this Agreement with
respect to the distribution of the shares, the Distributor shall receive from
the Trust a 12b-1 fee, at the rate and under the terms and conditions of the
12b-1 Plan, as such Plan is amended from time to time, and subject to any
further limitations on such fee as the Board of Trustees may impose.
(e) The Distributor may reallow any or all of the initial sales
charges or 12b-1 fees (including distribution and/or service fees) which it is
paid under this Agreement with respect to the shares to such dealers as the
Distributor may from time to time determine.
5. The Distributor shall act as agent of the Trust on behalf of the
Fund in connection with the sale and repurchase of shares of the Fund. Except
with respect to such sales and repurchases, the Distributor shall act as
principal in all matters relating to the promotion of the sale of shares of the
Fund and shall enter into all of its own engagements, agreements and contracts
as principal on its own account. The Distributor may enter into agreements with
investment dealers and financial institutions selected by the Distributor,
authorizing such investment dealers and financial institutions to offer and sell
shares of the Fund to the public upon the terms and conditions set forth
therein, which shall not be inconsistent with the provisions of this Agreement.
Each agreement shall provide that the investment dealer and financial
institution shall act as a principal, and not as an agent, of the Trust on
behalf of the Fund.
2
6. The Fund shall bear:
(i) the expenses of qualification of shares of the Fund for sale
in connection with such public offerings in such states as
shall be selected by the Distributor, and of continuing the
qualification therein until the Distributor notifies the
Trust that it does not wish such qualification continued; and
(ii) all legal expenses in connection with the foregoing.
7. (a) The Distributor shall bear the expenses of printing from the
final proof and distributing the Fund's prospectuses and statements of
additional information (including supplements thereto) relating to public
offerings made by the Distributor pursuant to this Agreement (which shall not
include those prospectuses and statements of additional information, and
supplements thereto, to be distributed to shareholders of the Fund), and any
other promotional or sales literature used by the Distributor or furnished by
the Distributor to dealers in connection with such public offerings, and
expenses of advertising in connection with such public offerings.
(b) The Distributor may be reimbursed for all or a portion of such
expenses, or may receive reasonable compensation for distribution related
services, to the extent those services are deemed to be appropriate subjects for
the payment of "service fees", including but not limited to, providing ongoing
shareholder liaison services, including responding to shareholder inquiries,
providing shareholders with information on their investments, and other services
now and hereinafter deemed to be appropriate payments under Rule 2830 of the
Conduct Rules of the National Association of Securities Dealers, Inc. and
permitted by the 12b-1 Plan.
8. The Distributor will accept orders for the purchase of shares of
the Fund only to the extent of purchase orders actually received and not in
excess of such orders, and it will not avail itself of any opportunity of making
a profit by expediting or withholding orders. It is mutually understood and
agreed that the Trust may reject purchase orders where, in the judgment of the
Trust, such rejection is in the best interest of the Trust.
9. The Trust, on behalf of the Fund, and the Distributor shall each
comply with all applicable provisions of the 1940 Act, the 1933 Act and all
other federal and state laws, rules and regulations governing the issuance and
sale of shares of the Fund.
10. (a) In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Distributor, the Trust on behalf of the Fund agrees to indemnify the
Distributor against any and all claims, demands, liabilities and expenses which
the 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 any Registration Statement or prospectus of the Fund, 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 or the Fund in connection therewith by or on behalf of the Distributor.
The Distributor agrees to indemnify the Trust and the Fund against any and all
claims, demands, liabilities and
3
expenses which the Trust or the Fund may incur arising out of or based upon any
act or deed of the Distributor or its sales representatives which has not been
authorized by the Trust or the Fund in its prospectus or in this Agreement.
(b) The Distributor agrees to indemnify the Trust and the Fund
against any and all claims, demands, liabilities and expenses which the Trust or
the Fund 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
any Registration Statement or prospectus of the Fund, or any omission to state a
material fact therein if such statement or omission was made in reliance upon,
and in conformity with, information furnished to the Trust or the Fund in
connection therewith by or on behalf of the Distributor.
11. Nothing herein contained shall require the Trust to take any
action contrary to any provision of its Agreement and Declaration of Trust, or
to any applicable statute or regulation.
12. The Distributor shall prepare reports for the Board of Trustees of
the Trust upon request showing information concerning expenditures related to
this Agreement.
13. This Agreement shall become effective with respect to the Fund as
of the date hereof, shall continue in force and effect until June 25, 2003,
and shall continue in force and effect from year to year thereafter, provided,
that such continuance is specifically approved at least annually (a)(i) by the
Board of Trustees of the Trust or (ii) by the vote of a majority of the
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
and (b) by vote of a majority of the Trust's trustees who are not parties to
this Agreement or "interested persons" (as defined in Section 2(a)(19) of the
0000 Xxx) of any party to this Agreement cast in person at a meeting called for
such purpose.
14. (a) This Agreement may be terminated with respect to the Fund at
any time, without the payment of any penalty, by vote of the Board of Trustees
of the Trust or by vote of a majority of the outstanding voting securities of
the Fund, or by the Distributor, on sixty (60) days' written notice to the other
party.
(b) This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" having the meaning set forth in Section
2(a)(4) of the 1940 Act.
15. The Distributor acknowledges and agrees that any non-public
personal information relating to customers of the Trust may be provided to the
Distributor solely for the purpose of enabling it to perform services pursuant
to this Agreement and may not be re-used by the Distributor for any other
purpose. The Trust has provided the Distributor with a copy of the Trust's
privacy policy under Regulation S-P, 17 C.F.R. Part 240, and will provide copies
of annual and other notices under, or amendments to its privacy policy. The
Distributor agrees that non-public personal information will not be released to
any third parties except as permitted by both Regulation S-P and policies of the
Trust. The Distributor represents and warrants to the Trust that it has adopted
and implemented procedures to safeguard non-public personal information relating
to customer records and information, and that such procedures are
4
reasonably designed to: (i) insure the security and confidentiality of customer
records and information; (ii) protect against any anticipated threats or hazards
to the security or integrity of customer records and information; and (iii)
protect against unauthorized access to or use of customer records or
information.
16. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage prepaid, to the other party at such address as
the other party may designate for the receipt of notices. Until further
notice to the other party, it is agreed that the address of the Trust shall
be 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 and the address of the
Distributor shall be 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000.
17. Notice is hereby given that, as provided by applicable law, the
obligations of or arising out of this Agreement are not binding upon any of the
shareholders of the Trust individually, but are binding only upon the assets and
property of the Trust and that the shareholders shall be entitled, to the
fullest extent permitted by applicable law, to the same limitation on personal
liability as stockholders of private corporations for profit.
18. This Agreement shall be deemed to be a contract made in the State
of Delaware and governed by, construed in accordance with and enforced pursuant
to the internal laws of the State of Delaware without reference to its conflicts
of laws rules.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate on the day and year first above written.
INVESTBIO OPPORTUNITY TRUST
By:
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
Attest:
Name:
Title:
INVESTPRIVATE, INC.
By:
----------------------------------------
Name:
Title:
Attest:
Name:
Title:
6
APPENDIX A
TO
DISTRIBUTION AGREEMENT
OF
INVESTBIO OPPORTUNITY TRUST
InvestBio Opportunity Fund
7
