INVESTMENT ADVISORY AGREEMENT
AGREEMENT ("AGREEMENT"), dated as of June 25, 2002, between InvestBio
Opportunity Trust, a Delaware business trust ("Trust"), and DBGI Advisors, Inc.,
a Delaware corporation ("DBGI Advisors" or "Advisor").
WHEREAS, the Trust is registered as an investment company under the
Investment Company Act of 1940, as amended ("Investment Company Act");
WHEREAS, DBGI Advisors is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended ("Advisers Act");
WHEREAS, the Trust is and will continue to be a series fund having one or
more investment portfolios, each with its own investment objectives, investment
policies and restrictions;
WHEREAS, the Investment Company Act prohibits any person from acting as an
investment adviser to a registered investment company except pursuant to a
written contract; and
WHEREAS, the Board of Trustees of the Trust wishes to appoint DBGI Advisors
as the investment advisor of the Trust;
NOW, THEREFORE, the Trust and DBGI Advisors hereby agree as follows:
1. APPOINTMENT OF ADVISOR.
The Trust hereby appoints DBGI Advisors as the investment advisor for each
of the portfolios of the Trust specified in Appendix A to this Agreement, as
such Appendix A may be amended by Advisor and the Trust from time to time
("Portfolios"), subject to the supervision of the Trustees of the Trust and in
the manner and under the terms and conditions set forth in this Agreement.
Advisor accepts such appointment and agrees to render the services and to assume
the obligations set forth in this Agreement commencing on its effective date.
Advisor will be an independent contractor and will have no authority to act for
or represent the Trust in any way or otherwise be deemed an agent unless
expressly authorized in this Agreement or another writing by the Trust and
Advisor.
2. DUTIES OF THE ADVISOR.
A. Subject to the general supervision and control of the Trustees of the
Trust and under the terms and conditions set forth in this Agreement, the Trust
acknowledges and agrees that it is contemplated that Advisor will, at its own
expense, select and contract with one or more investment subadvisers
("Subadvisers") to manage the investment operations and composition of each and
every Portfolio of the Trust and render investment advice for each Portfolio,
including the purchase, retention, and disposition of the investments,
securities and cash contained in each Portfolio, in accordance with each
Portfolio's investment objectives, policies and restrictions as stated in the
Trust's Agreement and Declaration of Trust, By-Laws, and such Portfolio's
Prospectus and Statement of Additional Information ("SAI"), as is from time to
time in effect; provided, that any contract with a Subadviser (an "Subadvisory
Agreement") shall be in compliance with and approved as required by the
Investment Company Act or in accordance with exemptive relief granted by the
Securities and Exchange Commission ("SEC") under the Investment Company Act.
B. Subject always to the direction and control of the Trustees of the
Trust, Advisor will have: (1) overall supervisory responsibility for the general
advisory and investment of each Portfolio's
assets; (2) full discretion to select new or additional Subadvisers for each
Portfolio; (3) full discretion to enter into and materially modify existing
Subadvisory Agreements with Subadvisers; (4) full discretion to terminate and
replace any Subadviser; and (5) full investment discretion to make all
determinations with respect to the investment of a Portfolio's assets not then
managed by a Subadviser. In connection with Advisor's responsibilities herein,
Advisor will assess each Portfolio's investment focus and will seek to implement
decisions with respect to the allocation and reallocation of each Portfolio's
assets among one or more current or additional Subadvisers from time to time, as
the Advisor deems appropriate, to enable each Portfolio to achieve its
investment goals. In addition, Advisor will monitor compliance of each
Subadviser with the investment objectives, policies and restrictions of any
Portfolio or Portfolios (or portions of any Portfolio), and review and report to
the Trustees of the Trust on the performance of each Subadviser. Advisor will
furnish, or cause the appropriate Subadviser(s) to furnish, to the Trust such
statistical information, with respect to the investments that a Portfolio (or
portions of any Portfolio) may hold or contemplate purchasing, as the Trust may
reasonably request. On Advisor's own initiative, Advisor will apprise, or cause
the appropriate Subadviser(s) to apprise, the Trust of important developments
materially affecting each Portfolio (or any portion of a Portfolio that they
advise) and will furnish the Trust, from time to time, with such information as
may be appropriate for this purpose. Further, Advisor agrees to furnish, or
cause the appropriate Subadviser(s) to furnish, to the Trustees of the Trust
such periodic and special reports as the Trustees of the Trust may reasonably
request. In addition, Advisor agrees to cause the appropriate Subadviser(s) to
furnish to third-party data reporting services all currently available
standardized performance information and other customary data.
C. Advisor will also furnish to the Trust, at its own expense and without
remuneration from or other cost to the Trust, the following:
(1) OFFICE SPACE. Advisor will provide office space in the offices of
the Advisor or in such other place as may be reasonably agreed
upon by the parties hereto from time to time, and all necessary
office facilities and equipment;
(2) PERSONNEL. Advisor will provide necessary executive and other
personnel, including personnel for the performance of clerical
and other office functions, exclusive of those functions: (a)
related to and to be performed under the Trust's contract or
contracts for administration, custodial, accounting, bookkeeping,
transfer, and dividend disbursing agency or similar services by
any entity, including Advisor or its affiliates, selected to
perform such services under such contracts; and (b) related to
the services to be provided by any Subadviser pursuant to a
Subadvisory Agreement; and
(3) PREPARATION OF PROSPECTUS AND OTHER DOCUMENTS. Advisor will
provide other information and services, other than services of
outside counsel or independent accountants or services to be
provided by any Subadviser under any Subadvisory Agreement,
required in connection with the preparation of all registration
statements and Prospectuses, prospectus supplements, SAIs, all
annual, semiannual, and periodic reports to shareholders of the
Trust, regulatory authorities, or others, and all notices and
proxy solicitation materials, furnished to shareholders of the
Trust or regulatory authorities, and all tax returns.
D. LIMITATIONS ON LIABILITY. Advisor will exercise its best judgment in
rendering its services to the Trust, and the Trust agrees, as an inducement to
Advisor's undertaking to do so, that the Advisor will not be liable for any
error of judgment or mistake of law or for any loss suffered by the Trust in
connection with the matters to which this Agreement relates, but will be liable
only for willful misconduct, bad faith, gross negligence, reckless disregard of
its duties or its failure to exercise due care
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in rendering its services to the Trust as specified in this Agreement. Any
person, even though an officer, director, employee or agent of Advisor, who may
be or become an officer, Trustee, employee or agent of the Trust, shall be
deemed, when rendering services to the Trust or when acting on any business of
the Trust, to be rendering such services to or to be acting solely for the Trust
and not as an officer, director, employee or agent, or one under the control or
direction of Advisor, even though paid by it. Notwithstanding the foregoing,
nothing in this Agreement shall relieve Advisor from any liabilities which it
may have under the Investment Company Act and the Securities Act of 1933, as
amended.
E. SECTION 11 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. The Trust
hereby agrees that any entity or person associated with Advisor that is a member
of a national securities exchange is authorized to effect any transaction on
such exchange for the account of a Portfolio to the extent and as permitted by
Section 11(a)(1)(H) of the Securities Exchange Act of 1934, as amended ("1934
Act").
F. SECTION 28(E) OF THE 1934 ACT. Subject to the appropriate policies and
procedures approved by the Board of Trustees, the Advisor may, to the extent
authorized by Section 28(e) of the 1934 Act, cause a Portfolio to pay a broker
or dealer that provides brokerage or research services to the Advisor, the
Subadviser, the Trust and the Portfolio an amount of commission for effecting a
portfolio transaction in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Advisor
determines, in good faith, that such amount of commission is reasonable in
relationship to the value of such brokerage or research services provided in
terms of that particular transaction or the Advisor's overall responsibilities
to the Portfolio, the Trust or its other investment advisory clients. To the
extent authorized by said Section 28(e) and the Board of Trustees, the Advisor
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of such action. In
addition, subject to seeking the most favorable price and best execution
available and in compliance with the Conduct Rules of the National Association
of Securities Dealers, Inc., the Advisor may also consider sales of shares of
the Trust as a factor in the selection of brokers and dealers.
G. DIRECTED BROKERAGE. Subject to the requirement to seek best price and
execution, and to the appropriate policies and procedures approved by the Board
of Trustees, the Trust reserves the right to direct the Advisor to cause
Subadvisers to effect transactions in portfolio securities through
broker-dealers in a manner that will help generate resources to: (i) pay the
cost of certain expenses which the Trust is required to pay or for which the
Trust is required to arrange payment pursuant to this Agreement; or (ii) finance
activities that are primarily intended to result in the sale of Trust shares. At
the discretion of the Board of Trustees, such resources may be used to pay or
cause the payment of Trust Expenses or may be used to finance activities that
are primarily intended to result in the sale of Trust shares.
3. ALLOCATION OF EXPENSES.
A. EXPENSES PAID BY THE ADVISOR:
(1) Salaries, Expenses and Fees of Certain Persons. Advisor (or its
affiliates) shall pay all salaries, expenses, and fees of the
Trustees and officers of the Trust who are officers,
directors/trustees, partners, or employees of Advisor or its
affiliates; and
(2) Assumption of Trust Expenses. The payment or assumption by
Advisor of any expense of the Trust that Advisor is not required
by this Agreement to pay or assume shall not obligate Advisor to
pay or assume the same or any similar expense of the Trust on any
subsequent occasion.
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B. Expenses Paid by the Trust: The Trust will pay all expenses of its
organization, operations, and business not specifically assumed or agreed to be
paid by Advisor, as provided in this Agreement, or by a Subadviser, as provided
in a Subadvisory Agreement. Without limiting the generality of the foregoing,
the Trust shall pay or arrange for the payment of the following:
(1) PREPARING, PRINTING AND MAILING OF CERTAIN DOCUMENTS. The costs
of preparing, setting in type, printing and mailing of
Prospectuses, Prospectus supplements, SAIs, annual, semiannual
and periodic reports, and notices and proxy solicitation
materials required to be furnished to shareholders of the Trust
or regulatory authorities, and all tax returns;
(2) OFFICERS AND TRUSTEES. Compensation of the officers and Trustees
of the Trust who are not officers, directors/trustees, partners
or employees of Advisor or its affiliates;
(3) REGISTRATION FEES AND EXPENSES. All legal and other fees and
expenses incurred in connection with the affairs of the Trust,
including those incurred with respect to registering its shares
with regulatory authorities and all fees and expenses incurred in
connection with the preparation, setting in type, printing, and
filing with necessary regulatory authorities of any registration
statement and Prospectus, and any amendments or supplements that
may be made from time to time, including registration, filing and
other fees in connection with requirements of regulatory
authorities;
(4) CUSTODIAN AND ACCOUNTING SERVICES. All expenses of the transfer,
receipt, safekeeping, servicing and accounting for the Trust's
cash, securities, and other property, including all charges of
depositories, custodians, and other agents, if any;
(5) INDEPENDENT LEGAL AND ACCOUNTING FEES AND EXPENSES. The charges
for the services and expenses of the independent accountants and
legal counsel retained by the Trust, for itself or its
Independent Trustees (as defined herein);
(6) TRANSFER AGENT. The charges and expenses of maintaining
shareholder accounts, including all charges of transfer,
bookkeeping, and dividend disbursing agents appointed by the
Trust;
(7) BROKERAGE COMMISSIONS. All brokers' commissions and issue and
transfer taxes chargeable to the Trust in connection with
securities transactions to which the Trust is a party;
(8) TAXES. All taxes and corporate fees payable by or with respect to
the Trust to federal, state, or other governmental agencies;
(9) TRADE ASSOCIATION FEES. Any membership fees, dues or expenses
incurred in connection with the Trust's membership in any trade
association or similar organizations;
(10) BONDING AND INSURANCE. All insurance premiums for fidelity and
other coverage;
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(11) SHAREHOLDER AND BOARD MEETINGS. All expenses incidental to
holding shareholders and Trustees meetings, including the
printing of notices and proxy materials and proxy solicitation
fees and expenses;
(12) PRICING. All expenses of pricing of the net asset value per share
of each Portfolio, including the cost of any equipment or
services to obtain price quotations; and
(13) NONRECURRING AND EXTRAORDINARY EXPENSES. Such extraordinary
expenses, such as indemnification payments or damages awarded in
litigation or settlements made.
4. COMPENSATION OF ADVISOR
For its services performed hereunder, the Trust will pay Advisor with
respect to each Portfolio the compensation specified in Appendix B to this
Agreement. Such compensation shall be paid to Advisor by the Trust on the first
day of each month; however, the Trust will calculate this charge on the daily
average value of the assets of each Portfolio and accrue it on a daily basis.
5. NON-EXCLUSIVITY.
The services of Advisor to the Trust are not to be deemed to be exclusive,
and Advisor shall be free to render investment advisory, advisory or other
services to others (including other investment companies) and to engage in other
activities so long as the services provided hereunder by Advisor are not
impaired. It is understood and agreed that the directors, officers and employees
of Advisor are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors/trustees, or employees of any other firm or corporation,
including other investment companies.
6. SUPPLEMENTAL ARRANGEMENTS.
Advisor may enter into arrangements with its parent or other persons
affiliated or unaffiliated with Advisor for the provision of certain personnel
and facilities to Advisor to enable Advisor to fulfill its duties and
obligations under this Agreement.
7. REGULATION.
Advisor shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports, or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
8. RECORDS.
The records relating to the services provided under this Agreement shall be
the property of the Trust and shall be under its control; however, the Trust
shall furnish to Advisor such records and permit it to retain such records
(either in original or in duplicate form) as it shall reasonably require in
order to carry out its duties. In the event of the termination of this
Agreement, such records shall promptly be returned to the Trust by Advisor free
from any claim or retention of rights therein. Advisor shall keep confidential
any information obtained in connection with its duties hereunder and disclose
such information only if the Trust has authorized such disclosure or if such
disclosure is expressly required or lawfully requested by applicable federal or
state regulatory authorities.
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9. DURATION OF AGREEMENT.
This Agreement shall become effective for each Portfolio on June 28, 2002,
or upon the effective date of registration of shares for any Portfolio
identified on Appendix A hereto, whichever is earlier, and shall remain in
effect for a two-year period thereafter. Further amendments to this Agreement
shall become effective on the later of the date specified in such amendment
(after execution by all parties) or the date of any meeting of the shareholders
of the Trust relating to such amendment, which for these purposes may be the
sole initial shareholder of the Trust, at which meeting this Agreement is
approved by the vote of a majority of the outstanding voting securities (as
defined in the Investment Company Act) of the Portfolios. The Agreement will
continue in effect for a period more than two years from the date of its
execution only so long as such continuance is specifically approved after the
initial two year period at least annually either by (i) the Trustees of the
Trust or (ii) by the vote of either a majority of the outstanding voting
securities of the Trust or, as appropriate, a majority of the outstanding voting
securities of any affected Portfolio, provided that, in either event, such
continuance shall also be approved by the vote of a majority of the Trustees of
the Trust who are not "interested persons" ("Independent Trustees") of any party
to this Agreement, cast in person at a meeting called for the purpose of voting
on such approval. The required shareholder approval of the Agreement or of any
continuance of the Agreement shall be effective with respect to any affected
Portfolio if a "majority of the outstanding voting securities" (as defined in
Rule 18f-2(h) under the Investment Company Act) of the affected Portfolio votes
to approve the Agreement or its continuance, notwithstanding that the Agreement
or its continuance may not have been approved by a majority of the outstanding
voting securities of (a) any other Portfolio affected by the Agreement or (b)
all the Portfolios of the Trust.
If the shareholders of any Portfolio fail to approve the Agreement or any
continuance of the Agreement, Advisor will continue to act as investment advisor
with respect to such Portfolio pending the required approval of the Agreement or
its continuance or of a new contract with Advisor or a different investment
advisor or other definitive action; provided, that the compensation received by
Advisor in respect of such Portfolio during such period will be no more than its
actual costs incurred in furnishing investment advisory and Advisory services to
such Portfolio or the amount it would have received under the Agreement in
respect of such Portfolio, whichever is less.
10. TERMINATION OF AGREEMENT.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees, including a majority of the Independent Trustees of
the Trust, by the vote of a majority of the outstanding voting securities of the
Trust, or with respect to any affected Portfolio, by the vote of a majority of
the outstanding voting securities of such Portfolio, on sixty (60) days' written
notice to Advisor, or by Advisor on sixty (60) days' written notice to the
Trust. This Agreement will automatically terminate, without payment of any
penalty, in the event of its assignment.
11. PROVISION OF CERTAIN INFORMATION BY ADVISOR.
Advisor will promptly notify the Trust in writing of the occurrence of any
of the following events:
A. Advisor fails to be registered as an investment adviser under the
Advisers Act or under the laws of any jurisdiction in which Advisor is required
to be registered as an investment adviser in order to perform its obligations
under this Agreement;
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B. Advisor is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board or body, involving the affairs of the Trust; and/or
C. The chief executive officer or controlling stockholder of Advisor
changes or there is otherwise an actual change in control of the Advisor.
12. AMENDMENTS TO THE AGREEMENT.
Except to the extent permitted by the Investment Company Act or the rules
or regulations thereunder or pursuant to any exemptive relief granted by the
SEC, this Agreement may be amended by the parties only if such amendment, if
material, is specifically approved by the vote of a majority of the outstanding
voting securities of each of the Portfolios affected by the amendment (unless
such approval is not required by Section 15 of the Investment Company Act as
interpreted by the SEC or its staff) and by the vote of a majority of the
Independent Trustees of the Trust cast in person at a meeting called for the
purpose of voting on such approval. The required shareholder approval shall be
effective with respect to any Portfolio if a majority of the outstanding voting
securities of the shares of that Portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Portfolio affected by the
amendment or (b) all the Portfolios of the Trust.
13. MISCELLANEOUS PROVISIONS.
A. ENTIRE AGREEMENT. This Agreement contains the entire understanding and
agreement of the parties.
B. HEADINGS. The headings in the sections of this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof.
C. NOTICES. All notices required to be given pursuant to this Agreement
shall be delivered or mailed to the address set forth below for the Trust or
Advisor, as appropriate, in person, by registered mail, or by a private mail or
courier service providing the sender with notice of receipt. Notice shall be
deemed given on the date delivered or mailed in accordance with this section.
D. FORCE MAJEURE. Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot, act
of terrorism, or failure of communication or power supply. In the event of
equipment breakdowns beyond its control, Advisor shall take reasonable steps to
minimize service interruptions but shall have no liability with respect thereto.
E. SEVERABILITY. Should any portion of this Agreement for any reason be
held to be void in law or in equity, the Agreement shall be construed, insofar
as is possible, as if such portion had never been contained herein.
F. INTERPRETATION. Nothing herein contained shall be deemed to require the
Trust to take any action contrary to its Agreement and Declaration of Trust or
By-Laws, or any applicable statutory or regulatory requirements to which it is
subject or by which it is bound, or to relieve or deprive the Trustees of their
responsibility for and control of the conduct of the affairs of the Trust.
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G. GOVERNING LAW. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware (without giving
effect to its conflict of laws principles), or any of the applicable provisions
of the Investment Company Act. To the extent that the laws of the State of
Delaware, or any of the provisions in this Agreement, conflict with applicable
provisions of the Investment Company Act, the latter shall control. Any question
of interpretation of any term or provision of this Agreement having a
counterpart in or otherwise derived from a term or provision of the Investment
Company Act shall be resolved by reference to such term or provision of the
Investment Company Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court,
by rules, regulations or orders of the SEC validly issued pursuant to the
Investment Company Act. Specifically, the terms "vote of a majority of the
outstanding voting securities," "interested persons," "assignment," and
"affiliated persons," as used herein shall have the meanings assigned to them by
Section 2(a) of the Investment Company Act unless otherwise stated herein. In
addition, where the effect of a requirement of the Investment Company Act
reflected in any provision of this Agreement is relaxed by a rule, regulation or
order of the SEC, whether of special or of general application, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first mentioned above.
INVESTBIO OPPORTUNITY TRUST
000 Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
DBGI ADVISORS, INC.
000 Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Executive Vice President
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APPENDIX A
Portfolios of the Trust Covered By The Agreement
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1. InvestBio Opportunity Fund
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APPENDIX B
Compensation
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The Advisor shall be compensated as follows:
For the services it provides to the Fund, the Advisor shall be entitled to
receive an advisory fee calculated at the annual rate of 1.00% of the Fund's
daily net assets.
In addition to the foregoing fee, the Trust shall pay all expenses not assumed
by the Advisor, including, without limitation: the fees and expenses of its
independent accountants and of its legal counsel, the costs of printing and
mailing annual and semi-annual reports to shareholders, proxy statements,
prospectuses, prospectus supplements and statements of additional information,
the costs of printing registration statements; custodian's fees, any proxy
solicitors' fees and expenses, filing fees, any federal, state or local income
or other taxes, any interest, any membership fees of the Investment Company
Institute and similar organizations, fidelity bond and Trustees' liability
insurance premiums and any extraordinary expenses, such as indemnification
payments or damages awarded in litigation or settlements made.
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