PRINCIPAL UNDERWRITER AGREEMENT
THIS AGREEMENT is made as of the 1st day of October, 2008, by and between
the DGHM Investment Trust, an open-end management investment company (the
"Trust"), and First Dominion Capital Corp., a Virginia corporation ("FDCC").
WHEREAS, FDCC is a broker-dealer registered with the Securities and
Exchange Commission (the "Commission") and a member of the Financial Industry
Regulatory Authority ("FINRA"), formerly known as the National Association of
Securities Dealers, Inc. (the "NASD"); and
WHEREAS, the Trust is registered as a diversified, open-end management
investment company under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Trust is authorized to offer shares of beneficial interest
(the "Shares") in one or more separate series (each a "Fund" and together the
"Funds"), each with one or more separate classes of Shares; and
WHEREAS, the Trust wishes to retain FDCC to provide statutory principal
underwriting services to the Funds, all as more specifically described in this
Agreement, and FDCC is willing to furnish such services; and
WHEREAS, the Board of Trustees of the Trust has approved such engagement:
NOW, THEREFORE, in consideration of the promises and agreements of the
parties contained herein, and for good consideration, the receipt and
sufficiency of which is acknowledged by both parties, the parties, intending to
be legally bound, hereby agree as follows:
1. Appointment.
The Trust hereby engages FDCC as the Funds' exclusive agent for the
distribution of the Shares, and FDCC hereby accepts such appointment under
the terms of this Agreement. While this Agreement is in force, the Trust
shall not sell any Shares except on the terms set forth in this Agreement.
Notwithstanding any other provision hereof, the Trust may terminate, suspend
or withdraw the offering of Shares whenever, in each entity's sole
discretion, it deems such action to be desirable.
FDCC shall perform the services set forth in this Agreement and as further
set forth in Schedule A to this Agreement. Schedule A to this Agreement may
be amended from time to time by written agreement of the parties.
2. Sale and Repurchase of Shares.
(a) FDCC will have the right, as agent for the Funds, to enter
into dealer agreements with responsible investment brokers
and dealers, and to sell Shares to such investment dealers
against orders therefore at the public offering price (as
defined in subparagraph 2(d) hereof) stated in each Fund's
currently effective Registration Statement on Form N-1A
under the Act and the Securities Act of 1933, as amended,
including the then current prospectus and statement of
additional information (the "Registration Statement"). Upon
receipt of an order to purchase Shares from a dealer with
whom FDCC has a dealer agreement, FDCC will promptly cause
such order to be filled by the appropriate Fund.
(b) FDCC will also have the right, as agent for the Funds, to sell such Shares
to the public against orders therefor at the public offering price.
(c) FDCC will also have the right to take, as agent for the Funds, all actions
which, in FDCC's reasonable judgment, are necessary to carry into effect
the distribution of the Shares.
(d) The public offering price for the Shares of each Fund shall
be the respective net asset value of the Shares of that Fund
then in effect, plus any applicable sales charge determined
in the manner set forth in the Registration Statement or as
permitted by the Act and the rules and regulations of the
Commission promulgated thereunder. In no event shall any
applicable sales charge exceed the maximum sales charge
permitted by the Rules of the FINRA Rulebook.
(e) The net asset value of the Shares of each Fund shall be
determined in the manner provided in the Registration
Statement, and when determined shall be applicable to
transactions as provided for in the Fund's Registration
Statement. The net asset value of the Shares of each Fund
shall be calculated by the applicable Fund or its authorized
designee on behalf of the Fund. FDCC shall have no duty to
inquire into or liability for the accuracy of the net asset
value per Share as calculated.
(f) On every sale, the applicable Fund shall receive the applicable net asset
value of the Shares promptly, but in no event later than the third
business day following the date on which FDCC shall have received an order
for the purchase of the Shares.
(g) Upon receipt of purchase instructions, FDCC will transmit such
instructions to the applicable Fund or its authorized transfer agent for
registration of the Shares purchased.
(h) Nothing in this Agreement shall prevent FDCC or any
affiliated person (as defined in the Act) of FDCC from
acting as FDCC or distributor for any other person, firm or
corporation (including other investment companies) or in any
way limit or restrict FDCC or any such affiliated person
from buying, selling or trading any securities for its or
their own account or for the accounts of others from whom it
or they may be acting; provided, however, that FDCC
expressly represents that it will undertake no activities
which, in its reasonable judgment, will adversely affect the
performance of its obligations to the Funds under this
Agreement.
(i) FDCC, as agent of and for the account of the Funds, may repurchase the
Shares at such prices and upon such terms and conditions as shall be
specified in the Registration Statement.
3. Sale of Shares by the Fund.
Each Fund reserves the right to issue any Shares at any time directly to the
holders of Shares ("Shareholders"), to sell Shares to its Shareholders or to
other persons at not less than net asset value and to issue Shares in
exchange for substantially all the assets of any corporation or trust or for
the shares of any corporation or trust.
4. Basis of Sale of Shares.
FDCC does not agree to sell any specific number of Shares. FDCC, as agent for
the Funds, undertakes to sell Shares on a best efforts basis only against
orders therefor.
5. Rules of FINRA, etc.
(a) FDCC will conform its activities to the Rules of FINRA and the securities
laws of the Commission and any jurisdiction in which it sells, directly or
indirectly, any Shares.
(b) FDCC will require each dealer with whom FDCC has a dealer agreement to
conform to the applicable provisions hereof and the Registration Statement
with respect to the public offering price of the Shares, and neither FDCC
nor any such dealers shall withhold the placing of purchase orders so as
to make a profit thereby.
(c) The Trust agrees to furnish to FDCC sufficient copies of any agreements,
plans or other materials it intends to use in connection with any sales of
Shares in reasonably adequate time for FDCC, on behalf of any applicable
Fund, to file and clear them with the proper authorities before they are
put in use, and not to use them until so filed and cleared.
(d) FDCC, at its own expense, will qualify as dealer or broker, or otherwise,
under all applicable state or federal laws required in order that Shares
may be sold in such states as may be mutually agreed upon by the parties.
(e) FDCC shall not make, or permit any representative, broker or
dealer to make, in connection with any sale or solicitation
of a sale of the Shares, any representations concerning the
Shares except those contained in the then current prospectus
and statement of additional information covering the Shares
and in printed information approved by the Funds as
information supplemental to such prospectus and statement of
additional information. Copies of the then effective
prospectus and statement of additional information and any
such printed supplemental information will be supplied to
FDCC in reasonable quantities upon request.
6. Records to be Supplied by the Trust
The Funds shall furnish to FDCC copies of all information, financial
statements and other papers which FDCC may reasonably request for use in
connection with the distribution of the Shares, and this shall include, but
shall not be limited to, one certified copy, upon request by FDCC, of all
financial statements prepared for the Funds by independent public
accountants.
7. Fees and Expenses.
(a) FDCC is authorized to collect the gross proceeds derived from the sale of
the Shares, remit the net asset value thereof to the Funds upon receipt of
the proceeds and retain the sales charge, if any.
(b) FDCC may receive from each Fund a distribution fee and/or
service fee at the rates under terms of and conditions of
any distribution plans ("Plans") adopted by each class of a
Fund, as such Plans are in effect from time to time, and
subject to any further limitations of such fees as the
Trust's Board of Trustees may impose. This provision shall
not limit the Trust from entering into an agreement with a
financial intermediary directly, regardless of whether FDCC
is also a party to such agreement, pursuant to which the
Trust compensates the financial intermediary with fees
payable pursuant to the Plans. In circumstances described
in the foregoing sentence, FDCC shall not be entitled to
receive the amount payable under the Plans.
(c) FDCC shall reallow any or all of the sales charge,
distribution fee and service fee that it has received under
this Agreement to a financial intermediary as it may from
time to time determine in accordance with a schedule set
forth in the Registration Statement of the Fund or as
otherwise negotiated by FDCC. Payment of any sales charge
shall be the sole obligation of FDCC. Notwithstanding the
foregoing, FDCC may not reallow to any financial
intermediary for shareholder services an amount in excess of
0.25% of the average annual net asset value of the shares
with respect to which said intermediary provides shareholder
services.
(d) FDCC may from time to time employ or associate with such
person or persons as may be appropriate to assist FDCC in
the performance of this Agreement. Such person or persons
may be officers and employees who are employed or designated
as officers by FDCC, the Fund, and/or affiliated entities of
the Funds. To the extent that FDCC employs such persons,
FDCC shall pay the compensation of such person or persons
for such employment, and no obligation will be incurred by
or on behalf of the Fund in such respect. Persons who
become associated with FDCC as registered representatives or
in like fashion shall not be compensated by FDCC other than
pursuant to a separate agreement, if any.
8. Indemnification of the Funds.
FDCC agrees to indemnify and hold harmless the Funds and each person who has
been, is, or may hereafter be a trustee, officer, employee, shareholder or
control person of the Trust against any loss, damage or expense (including
the reasonable costs of investigation) reasonably incurred by any of them in
connection with any claim or in connection with any action, suit or
proceeding to which any of them may be a party, which arises out of or is
alleged to arise out of or is based upon any untrue statement or alleged
untrue statement of a material fact, or the omission or alleged omission to
state a material fact necessary to make the statements not misleading, on the
part of FDCC or any agent or employee of FDCC or any other person for whose
acts FDCC is responsible, unless such statement or omission was made in
reliance upon written information furnished by the Fund. FDCC likewise agrees
to indemnify and hold harmless each Fund and each such person in connection
with any claim or in connection with any action, suit or proceeding which
arises out of or is alleged to arise out of FDCC's failure to exercise
reasonable care and diligence with respect to its services, if any, rendered
in connection with investment, reinvestment, automatic withdrawal and other
plans for Shares. The term "expenses" for purposes of this and the next
paragraph includes amounts paid in satisfaction of judgments or in
settlements which are made with FDCC's consent. The foregoing rights of
indemnification shall be in addition to any other rights to which the Funds
or each such person may be entitled as a matter of law.
9. Indemnification of FDCC.
Each Fund agrees to indemnify and hold harmless FDCC and each person who has
been, is, or may hereafter be a director, officer, employee, shareholder or
control person of FDCC against any loss, damage or expense (including the
reasonable costs of investigation) reasonably incurred by any of them in
connection with the matters to which this Agreement relates, including
clerical errors and mechanical failures, except a loss resulting from willful
misfeasance, bad faith or negligence, on the part of any of such persons in
the performance of FDCC's duties or from the reckless disregard by any of
such persons of FDCC's obligations and duties under this Agreement, for all
of which exceptions FDCC shall be liable to each Fund.
In order that the indemnification provisions contained in this Paragraph 9
shall apply, it is understood that if in any case a Fund may be asked to
indemnify FDCC or any other person or hold FDCC or any other person harmless,
such Fund shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that FDCC
will use all reasonable care to identify and notify a Fund promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification against a Fund. The Funds
shall have the option to defend FDCC and any such person against any claim
which may be the subject of this indemnification, and in the event that
either party so elects, it will so notify FDCC, and thereupon the Trust shall
take over complete defense of the claim, and neither FDCC nor any such person
shall in such situation initiate further legal or other expenses for which it
shall seek indemnification under this Paragraph 9. FDCC shall in no case
confess any claim or make any compromise in any case in which a Fund will be
asked to indemnify FDCC or any such person except with the appropriate Fund's
written consent.
Notwithstanding any other provision of this Agreement, FDCC shall be entitled
to receive and act upon advice of counsel (who may be counsel for the Funds
or its own counsel) and shall be without liability for any action reasonably
taken or thing reasonably done pursuant to such advice, provided that such
action is not in violation of applicable federal or state laws or
regulations.
10. Termination and Amendment of this Agreement.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment. This Agreement may be amended only
if such amendment is approved by the parties hereto and in a manner
consistent with applicable law.
Either the Trust or FDCC may at any time terminate this Agreement on sixty
(60) days' written notice delivered or mailed by registered mail, postage
prepaid, to the other party.
11. Effective Period of this Agreement.
This Agreement shall take effect on the date referenced above, and shall
remain in full force and effect for a period of two (2) years thereafter
(unless terminated automatically as set forth in Paragraph 10), and shall
continue from year to year thereafter, subject to annual approval as required
by the Act.
12. Successor Investment Fund.
Unless this Agreement has been terminated in accordance with Paragraph 10,
the terms and provisions of this Agreement shall become automatically
applicable to any investment company which is a successor to the Trust as a
result of reorganization, recapitalization or change of domicile.
13. Limitation of Liability.
It is expressly agreed that the obligations of the Trust hereunder shall not
be binding upon any of the Trustees, shareholders, nominees, officers, agents
or employees of the Funds, personally, but bind only the trust property of
the Funds. The execution and delivery of this Agreement have been authorized
by the Trust and signed by an officer of each Fund, acting as such, 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
trust property of the Funds.
14. Severability.
In the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.
15. Questions of Interpretation.
(a) This Agreement shall be governed by the laws of the State of Delaware.
(b) 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 Act shall be resolved by
reference to such term or provision of the Act and to
interpretation 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 Securities and
Exchange Commission issued pursuant to said Act. In
addition, where the effect of a requirement of the Act,
reflected in any provision of this Agreement is revised by
rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
16. Notices.
Any notices under this Agreement shall be in writing, addressed and delivered
or mailed postage paid to the other party, with a copy to the Fund's counsel,
at such address as such other party may designate for the receipt of such
notice. Such notice will be effective upon receipt. Until further notice to
the other party, it is agreed that the address of each party for this purpose
shall be:
(a) If to the Funds, to:
DGHM Investment Trust
0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx 000,
Xxxxxx, XX 00000
Attn: Xxx Xxxxxx
(b) If to FDCC, to:
First Dominion Capital Corp.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
17. Execution.
This Agreement may be executed by one or more counterparts, each of which
shall be deemed an original, but all of which together will constitute one in
the same instrument.
19. AML and Privacy.
FDCC represents that it is in compliance in all material respects, and will
continue to so comply, with all applicable laws and regulations relating to
guarding against terrorism and money laundering, and FDCC agrees to comply
with the Trust's anti-money laundering program to the extent applicable. FDCC
also agrees to comply with the Trust's privacy policies with respect to all
information obtained pursuant to this Agreement.
20. Headings.
All Section headings contained in this Agreement are for convenience of
reference only, do not form a part of this Agreement and will not affect in
any way the meaning or interpretation of this Agreement. Words used herein,
regardless of the number and gender specifically used, will be deemed and
construed to include any other number, singular or plural, and any other
gender, masculine, feminine, or neuter, as the Agreement requires.
21. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes all prior agreements, understandings and arrangements with
respect to the subject matter hereof.
SIGNATURES
IN WITNESS WHEREOF, the Trust and FDCC have each caused this Agreement to be
signed in duplicate on their behalf, all as of the day and year first above
written.
DGHM INVESTMENT TRUST
By: Date________________
--------------------------------
Print Name: Xxxxxx Xxxxxx
Title: Treasurer, Chief Compliance Officer
FIRST DOMINION CAPITAL CORP.
By: Date________________
--------------------------------
Print Name: Xxxx Xxxxx, III
Title: President
STLD01-1443595-1 A-1Principal Underwriting Agreement
DGHM Investment Trust
Schedule A
Schedule A
Services
I. Underwriter services include:
A. Preparation and execution of Underwriting, Selling Agreement, and Rule 12b-1
Distribution Plans.
o Monitoring accruals
o Monitoring expenses
o Disbursements for expenses and trail commissions
B. Provide Quarterly 12b-1 and/or Service Fee Reports to the Board of Trustees
of the Trust.
C. Review, recommend and submit sales materials to FINRA.
D. Initial FINRA Licensing and Transfers of Registered Representatives.
o U-4 Form and Fingerprint Submissions to FINRA o Supplying Series 6, 7,
24 and 63 written study material o Registration for Exam Preparation
classes o Renewals and Terminations of Representatives
E. Provide and regularly update written supervisory procedures and manuals
for registered representatives.
F. Ongoing compliance updates for representatives regarding sales practices,
written correspondence and other communication with the public.
G. Provide, monitor and ensure compliance with all FINRA Continuing Education
Requirements for registered representatives.
