DISTRIBUTION AGREEMENT
This AGREEMENT, dated this the 26th day of April, 2007, between DGHM 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 (the "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 (the "1933
Act"), pursuant to a registration statement on Form N-1A (the "Registration
Statement"), including a prospectus (the "Prospectus") and a statement of
additional information (the "Statement of Additional Information"); and
WHEREAS, the Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1
under the 1940 Act (the "Distribution Plan") with respect to Shares of certain
classes of the Fund, 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 of the Fund
for the period of this Agreement;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Appointment of Distributor.
(a) The Trust hereby appoints Distributor its exclusive agent for the
distribution of the Shares of the Fund in jurisdictions wherein such Shares may
be legally offered for sale; provided, however, that the Trust in its absolute
discretion may issue Shares of the Fund 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 hereby accepts such appointment as exclusive agent for
the distribution of the Shares of the Fund 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 Trust.
(c) Distributor may sell Shares of the Fund 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 Statement of Additional Information, 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 of the Fund 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 Statement of Additional
Information.
(e) 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 of the Fund 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 Fund.
Distributor may reallow 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 Statement
of Additional Information. 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 of the Fund under this Agreement. The Trust shall also make available a
sufficient number of copies of the Fund's current Prospectus and Statement of
Additional Information for use by the Distributor.
4. Expenses.
(a) The Trust will pay or cause to be paid the following expenses: (i)
preparation, printing and distribution to shareholders of the Prospectus and
Statement of Additional Information; (ii) preparation, printing and distribution
of reports and other communications to shareholders; (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.
(b) 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 of the Fund; (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 Fund's
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 a 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 Statements of Additional Information 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.
(c) 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
each 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 of the Fund 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 Statement of Additional Information 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
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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 which 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 Statement of Additional Information 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 Fund Shares
hereunder, or their sales representatives, that has not been authorized by the
Trust in any Prospectus or Statement of Additional Information of any Fund or by
this Agreement.
8. Term and Termination.
(a) With respect to the Fund, this Agreement shall become effective
upon the commencement of operations of such Fund as set forth in the attached
appendices. Unless terminated as herein provided, with respect to the Fund, this
Agreement shall continue in effect for two years from the date of the Fund's
commencement of operations and, with respect to the 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 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 the 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 Fund or by
Distributor, on sixty 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. 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 "DGHM 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.
10. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Distributor hereby agrees that all records which
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.
11. 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 the DGHM Investment Trust, 000 Xxxxx Xxxxxx, Xxxxx 0000,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxx, Xx., Chairman 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 the
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.
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12. Anti-Money Laundering. The Distributor agrees to perform such
anti-money ("AML") functions with respect to the Fund 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 the
Fund. It is understood and agreed that shareholders of the Fund are not
customers of the Distributor and the Trust and Fund retain legal responsibility
under the USA Patriot Act for AML compliance with respect to transactions in
Fund shares. The Distributor agrees to allow federal examiners having
jurisdiction over the Fund to obtain information and records relating to the
Trust's AML program in its possession and to inspect the Distributor for
purposes thereof.
13. 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 to not 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 National Association of Securities Dealers (NASD) 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 Fund, the Fund's investment adviser, or any of the Fund's 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.
DGHM INVESTMENT TRUST
/s/ Xxxx X. Xxxx, Xx.
By:________________________________________
Print Name: Xxxx X. Xxxx, Xx.
Title: Chairman
CAPITAL INVESTMENT GROUP, INC.
/s/ Xxxxxxx X. Xxxxxx
By:________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
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APPENDIX A
Dated as of April 26, 2007
DGHM All- Cap Value Fund
Date Fund commenced operations : April __, 2007
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