EXHIBIT (h)
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into this 1st day of July, 2004 by
and between Mount Yale Opportunity Fund, LLC (the "Company") and Alpha Brokerage
Partners, LLC, (the "Distributor").
W I T N E S S E T H:
1. Distribution Services. The Company hereby engages the Distributor,
and the Distributor hereby agrees to act, as principal underwriter for the
Company in the sale and distribution, on a private basis, of the Company's
limited liability company interests (the "Interests"), either through dealers or
otherwise. The Distributor agrees to offer such Interests for sale at all times
when such Interests are available for sale and may lawfully be offered for sale
and sold.
2. Sale of Company Interests. Such Interests are to be sold only on the
following terms:
(a) All subscriptions, offers or sales shall be subject to
acceptance or rejection by the Company. Any offer or sale shall be
conclusively presumed to have been accepted by the Company if the
Company shall fail to notify the Distributor of the rejection of such
offer or sale prior to the computation of the net asset value of the
interests next following receipt by the Company of notice of such offer
and sale.
(b) No Interest shall be sold by the Company for any
consideration other than cash or for any amount less than the net asset
value of such Interest, computed as provided in the currently effective
Private Placement Memorandum of the Company (the "Net Asset Value").
All Interests sold by the Distributor shall be sold at their offering
price, as hereinafter defined, provided that the Distributor may allow,
or sell at, a discount from said public offering price to
broker-dealers that have entered into sales agreements with the
Distributor, which discount shall be no greater than the applicable
sales load or charge.
(c) The offering price of the Interests shall be the Net Asset
Value thereof next determined following receipt of an order by the
Distributor plus any applicable sales load or charge. The sales load or
charge may be an initial charge of a percentage of the public offering
price, as set forth in Company's current Private Placement Memorandum
and specifically approved by the Board of Managers of the Company.
(d) Any applicable sales loads or charges may, at the
discretion of the Company and the Distributor, be reduced or eliminated
as permitted by the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules and regulations thereunder, as they may be
amended from time to time, provided that such reduction or elimination
shall be set forth in the currently effective Private Placement
Memorandum for the Company, and provided that the Company shall in no
event receive for any Interests sold an amount less than the Net Asset
Value thereof.
3. Registration Exemptions. The Company agrees to make prompt and
reasonable efforts to effect and keep in effect, at its own expense, the
registration or qualification or the exemption from registration or
qualification of its Interests for sale in such jurisdictions as the Company may
designate.
4. Information to be Furnished to Distributor. The Company agrees that
it will furnish the Distributor with such information with respect to the
affairs and accounts of the Company as the Distributor may from time to time
reasonably require, and further agrees that the Distributor, at all reasonable
times, shall be permitted to inspect the books and records of the Company.
5. Allocation of Expenses. During the period of this Agreement, the
Company shall pay or cause to be paid all expenses, costs and fees incurred by
the Company which are not assumed by the Distributor or Mount Yale Asset
Management, LLC (the "Adviser"). The Distributor shall pay all costs of
distributing the Interests, including, but not limited to, (a) compensation paid
to broker-dealers, including the Distributor and its registered representatives,
for their sales of Interests; (b) compensation paid to broker-dealers for
providing administrative services with respect to the Company's investors; and
(c) other advertising and promotional expenses in connection with the
distribution of Interests; provided that the Adviser, rather than the
Distributor, may bear the expenses referred to in this sentence, but the
Distributor shall be primarily liable for such expenses until paid.
6. Compensation to Distributor. As compensation for all of its services
provided and its costs assumed under this Agreement, the Distributor shall
receive such front-end sales charges and quarterly service fees as described in
the Company's current Private Placement Memorandum, as amended and supplemented
from time to time.
7. Limitation of Distributor's Authority. The Distributor shall be
deemed to be an authorized independent contractor and, except as specifically
provided or authorized herein, shall have no authority to act for or represent
the Company.
8. Subscription for Interests; Refund for Canceled Orders. The
Distributor shall subscribe for the Interests of the Company only for the
purpose of covering purchase orders already received by it or for the purpose of
investment for its own account. In the event that an order for the purchase of
Interests is placed with the Distributor by a customer or dealer and
subsequently canceled, the Distributor shall forthwith cancel the subscription
for such Interests entered on the books of the Company and, if the Distributor
has paid the Company for such Interests, shall be entitled to receive from the
Company in refund of such payment the lesser of:
(a) the consideration received by the Company for said
Interests; or
(b) the Net Asset Value of such Interests at the time of
cancellation by the Distributor.
9. Freedom to Deal with Third Parties. The Distributor shall be free to
render to others services of a nature either similar to or different from those
rendered under this Agreement, except such as may impair its performance of the
services and duties to be rendered by it hereunder.
10. Effective Date. This Agreement shall become effective upon the
initial effective date of the Company's Registration Statement on Form N-2.
11. Duration. Unless sooner terminated as hereinafter provided, this
Agreement shall continue in effect from year to year but only so long as such
continuance is specifically approved at least annually either (a) by the Board
of Managers of the Company, including the specific approval of a majority of the
managers who are not Interested Persons of the Company or of the Distributor,
cast in person at a meeting called for the purpose of voting on such approval;
or (b) by the vote of the holders of a majority of the outstanding Interests of
the Company.
12. Termination. This Agreement may be terminated at any time without
the payment of any penalty by the vote of a majority of the members of the Board
of Managers of the Company who are not
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Interested Persons of the Company or by the Distributor, upon not more than 60
days' written notice to the other party. This Agreement shall automatically
terminate in the event of its assignment.
13. Amendments to Agreement. No material amendment to this Agreement
shall be effective until approved by the Distributor and by the vote of a
majority of the Board of Managers of the Company who are not Interested Persons
of the Distributor.
14. Notices. Any notices under this Agreement shall be in writing,
addressed, delivered or mailed, postage prepaid, to the other party at such
address as such other party may designate in writing for the receipt of such
notice.
IN WITNESS WHEREOF, the Company and the Distributor have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
MOUNT YALE OPPORTUNITY FUND, LLC
By
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Its
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ALPHA BROKERAGE PARTNERS, LLC
By
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Its
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