Exhibit (e): Distribution Agreement between the Registrant and
Capital Investment Group, Inc.
DISTRIBUTION AGREEMENT
This AGREEMENT, dated as of July 14, 1999, is by and between NEW PROVIDENCE
INVESTMENT TRUST, an unincorporated business trust organized under the laws of
The Commonwealth of Massachusetts (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 separate series of
securities and other assets, as identified in Appendix A (each a "Fund"); and
WHEREAS, the Trust offers the Shares of such Funds and has registered 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
of the Funds, 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 Funds
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 each 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 each 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 each 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 Agreement
and Declaration of Trust of the Trust.
(c) Distributor may sell Shares of each 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 each 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) Distributor is not authorized by the Trust to give any information or
make any representations regarding the Shares of any Fund, except such
information or representations as are contained in the Registration
Statement or in the current Prospectus or Statement of Additional
Information of each Fund, or in advertisements and sales literature
prepared by or on behalf of the Trust for Distributor's use.
(f) 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 Funds Shares 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 each Fund. The excess,
if any, of the public offering price over the net asset value of the Shares
sold by Distributor as agent shall be retained by Distributor as a
commission for its services hereunder. Out of such commission Distributor
may allow 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
each Fund under this Agreement. The Trust shall also make available a
sufficient number of copies of each 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 therefor; and (ix) compensation
to the Distributor for services provided and expenses assumed by the
Distributor based on the schedule set forth in Appendix B attached
hereto.
(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 each 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 Funds 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) Distributor in connection with the Distribution Plan 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 each 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
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 Funds 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) This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall continue in effect
for two years from the date hereof and 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 each 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) 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 each 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 "New Providence Investment Trust" means and refers to the Trustees
from time to time serving under the Agreement and Declaration of Trust of
the Trust, a copy of which is on file with the Secretary of the
Commonwealth of Massachusetts. 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 Agreement and Declaration of Trust.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.
NEW PROVIDENCE INVESTMENT TRUST
Attest: /S/ C. Xxxxx Xxxxxx, III
_________________________________
By: /s/ Xxxx X. Xxxxxxx
___________________________
CAPITAL INVESTMENT GROUP, INC.
Attest: /s/ Xxxxx X. Qullbery
_________________________________
By: /s/ Xxxxxxx X. Xxxxxx
___________________________
APPENDIX A
Dated as of July 14, 1999
o New Providence Capital Growth Fund
o Wisdom Fund
APPENDIX B
DISTRIBUTOR'S COMPENSATION SCHEDULE
For the services delineated in the DISTRIBUTION AGREEMENT, the Distributor shall
be compensated monthly, as of the last day of each month, within five business
days of the month end, an annual fee according to the following schedule:
Annual Aggregate Fee:
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Aggregate fee of $2,500 per year, per Fund of the Trust, for services
provided to the Trust by the Distributor, analyzed monthly.
