SUB-DISTRIBUTION AGREEMENT
This
Agreement made this 19th day of December, 2009, by and among CAPITAL MANAGEMENT
INVESTMENT TRUST, a Massachusetts business trust (the “Trust”), XXXXXXXXXX
XXXXXXX & CO., LLC, a New York limited liability company (the “Distributor”),
and MATRIX CAPITAL GROUP, INC., a New York Corporation (the
“Sub-Distributor”).
W
I T N E S S E T H:
WHEREAS,
the Trust is registered as an open-end management investment company under the
Investment Company Act of 1940 (the “1940 Act”) and is authorized to issue
shares of beneficial interests (“Shares”) in separate series with each such
series representing interests in a separate portfolio of securities and other
assets; and
WHEREAS,
the Distributor has been appointed as the Trust’s principal underwriter pursuant
to a Distribution Agreement between the Trust and the Distributor;
and
WHEREAS,
the Distributor and the Sub-Distributor are each registered as a broker-dealer
under the Securities Exchange Act of 1934 (the “1934 Act”) and are each a member
in good standing of Financial Industry Regulatory Authority, Inc. (the “FINRA”);
and
WHEREAS,
the Distributor wishes to enter into an agreement with the Sub-Distributor with
respect to the continuous offering of the Shares of the series of the Trust set
forth on Appendix A (the “Funds”), as such Appendix may be amended from time to
time;
NOW,
THEREFORE, the parties agree as follows:
1. Appointment of
Sub-Distributor. The Distributor hereby appoints the Sub-Distributor as
its agent to sell and to arrange for the sale of the Shares, on the terms and
for the period set forth in this Agreement, and the Sub-Distributor hereby
accepts such appointment and agrees to act hereunder directly and/or through the
Funds’ transfer agent in the manner set forth in the Prospectus (as defined
below). It is understood and agreed that the services of the Sub-Distributor
hereunder are not exclusive, and the Distributor may continue to act as
underwriter or distributor for the sale of Shares and appoint other
sub-distributors from time to time.
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2.
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Services and Duties of
the Sub-Distributor.
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(a) The
Sub-Distributor agrees to sell the Shares, as agent for the Distributor, from
time to time during the term of this Agreement upon the terms described in the
Prospectus. As used in this Agreement, the term “Prospectus” shall mean the
prospectus and statement of additional information with respect to the Funds
included as part of the Trust’s Registration Statement, as such prospectus and
statement of additional information may be amended or supplemented from time to
time, and the term “Registration Statement” shall mean the Registration
Statement most recently filed from time to time by the Trust with the Securities
and Exchange Commission (“SEC”) and effective under the Securities Act of 1933
(the “1933 Act”) and the 1940 Act, as such Registration Statement is amended by
any amendments thereto at the time in effect. The Sub-Distributor shall not be
obligated to sell any certain number of Shares.
(b) The
Sub-Distributor will hold itself available to receive orders, satisfactory to
the Sub-Distributor, for the purchase of the Shares and will accept such orders
and will transmit such orders and funds received by it in payment for such
Shares as are so accepted to the Funds’ transfer agent or custodian, as
appropriate, as promptly as practicable. Purchase orders shall be deemed
accepted and shall be effective at the time and in the manner set forth in the
Funds’ Prospectus. The Sub-Distributor shall not make any short sales of
Shares.
(c) The
offering price of the Shares shall be the net asset value per share of the
Shares, plus the sales charge, if any (determined as set forth in the
Prospectus). The Distributor shall furnish the Sub-Distributor, with all
possible promptness, an advice of each computation of net asset value and
offering price.
(d) The
Sub-Distributor shall have the right to enter into selected dealer agreements
with securities dealers of its choice (“selected dealers”) for the sale of
Shares. Shares sold to selected dealers shall be for resale by such dealers only
at the offering price of the Shares as set forth in the Prospectus. The Sub-
Distributor shall offer and sell Shares only to such selected dealers as are
members in good standing of the FINRA.
(e) Fund/SERV
Transactions. The Sub-Distributor agrees to process and transmit through
the mutual fund service division of National Securities Clearing Corporation
(“NSCC”) all purchases, redemptions and other transactions in the Shares. The
Trust will be bound by all transactions entered into NSCC by the
Sub-Distributor. The Sub-Distributor will utilize the services of NSCC for any
other purpose as it deems to be appropriate or necessary relative to the
processing or transmittal of transactions in the Shares. The authority of the
Sub-Distributor under this paragraph shall continue in effect until such time as
NSCC is otherwise notified by the Sub-Distributor.
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3.
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Duties of the
Trust.
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(a) Maintenance of Federal
Registration. The Trust shall, at its expense, take, from time to time,
all necessary action and such steps, including payment of the related filing
fees, as may be necessary to register and maintain registration of a sufficient
number of Shares under the 1933 Act. The Trust agrees to file from time to time
such amendments, reports and other documents as may be necessary in order that
there may be no untrue statement of a material fact in a Registration Statement
or Prospectus, or necessary in order that there may be no omission to state a
material fact in the Registration Statement or Prospectus which omission would
make the statements therein misleading.
(b) Maintenance of “Blue Sky”
Qualifications. The Trust shall, at its expense, use its best efforts to
qualify and maintain the qualification of an appropriate number of Shares for
sale under the securities laws of such states as the Distributor and the Trust
may approve. The Trust will advise the Sub-Distributor in writing of the states
and jurisdictions in which the shares of each Fund are qualified for sale under,
or exempt from the requirements of, applicable law. The Sub-Distributor shall
furnish such information and other material relating to its affairs and
activities as may be required by the Trust or the Funds in connection with such
qualifications.
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(c) Copies of Reports and
Prospectuses. The Trust shall, at its expense, keep the Sub-Distributor
fully informed with regard to its affairs and in connection therewith shall
furnish to the Sub-Distributor copies of all information, financial statements
and other papers which the Sub-Distributor may reasonably request for use in
connection with the distribution of Shares, including such reasonable number of
copies of Prospectuses and annual and interim reports as the Sub-Distributor may
request and shall cooperate fully in the efforts of the Sub-Distributor to sell
and arrange for the sale of the Shares and in the performance of the
Sub-Distributor under this Agreement.
4. Compensation. As
compensation for the services performed and the expenses assumed by
Sub-Distributor under this Agreement including, but not limited to, any
commissions paid for sales of Shares, Sub-Distributor shall be entitled to the
fees and expenses set forth in Appendix B to this Agreement which are payable
monthly. Such fees shall be paid to Sub-Distributor by the
Distributor.
5. Conformity with Applicable
Law and Rules. The Sub-Distributor agrees that in selling Shares
hereunder it shall conform in all respects with the laws of the United States
and of any state in which Shares may be offered, and with applicable rules and
regulations of the FINRA.
6. Independent
Contractor. In performing its duties hereunder, the Sub- Distributor
shall be an independent contractor and neither the Sub-Distributor, nor any of
its officers, directors, employees or representatives is or shall be an employee
of the Trust in the performance of the Sub-Distributor’s duties hereunder. The
Sub-Distributor shall be responsible for its own conduct and the employment,
control, and conduct of its agents and employees and for injury to such agents
or employees or to others through its agents or employees. The Sub-Distributor
assumes full responsibility for its agents and employees under applicable
statutes and agrees to pay all employee taxes thereunder.
7. Indemnification. The
Distributor agrees to indemnify and hold harmless the Sub-Distributor and each
of its present or former directors, officers, employees, representatives,
agents, affiliates and stockholders against any and all losses, liabilities,
damages, claims or expenses (including the reasonable costs of investigating or
defending any alleged loss, liability, damage, claim or expense and reasonable
legal counsel fees incurred in connection therewith) to which the
Sub-Distributor or any such person may become subject under the 1933 Act, under
any other statute, at common law, or otherwise, arising out of this
Agreement.
The
Distributor shall be entitled to participate, at its own expense, in the
defense, or, if the Distributor so elects, to assume the defense of any suit
brought against the Sub-Distributor and/or the other indemnified persons, but if
the Distributor elects to assume the defense, such defense shall be conducted by
legal counsel chosen by the Distributor and satisfactory to the Sub-Distributor
and to the persons indemnified as defendant or defendants, in the suit. In the
event that the Distributor elects to assume the defense of any such suit and
retain such legal counsel, the Sub-Distributor and the persons indemnified as
defendant or defendants in the suit shall bear the fees and expenses of any
additional legal counsel retained by them. If the Distributor does not elect to
assume the defense of any such suit, the Distributor will reimburse the
Sub-Distributor and the persons indemnified as defendant or defendants in such
suit for the reasonable fees and expenses of any legal counsel retained by them.
The Distributor agrees to promptly notify the Sub-Distributor of the
commencement of any litigation or proceedings against it or any of its
directors, officers, employees or representatives in connection with the issue
or sale of any Shares.
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8. Authorized
Representations. The Sub-Distributor is not authorized by the Trust or
the Distributor to give on behalf of the Trust any information or to make any
representations in connection with the sale of Shares other than the information
and representations contained in a Registration Statement or Prospectus filed
with the SEC under the 1933 Act and/or the 1940 Act, covering Shares, as such
Registration Statement and Prospectus may be amended or supplemented from time
to time, or contained in shareholder reports or other material that may be
prepared by or on behalf of the Trust for the Sub-Distributor’s
use.
9. Term of Agreement.
The term of this Agreement shall begin on the date first above written, and
unless sooner terminated as hereinafter provided, this Agreement shall remain in
effect for a period of one year from the date first above written. Thereafter,
this Agreement shall continue in effect from year to year, subject to the
termination provisions and all other terms and conditions thereof, so long as
such continuation shall be specifically approved at least annually by (i) the
Board of Trustees or by vote of a majority of the outstanding voting securities
of each Fund and, (ii) by the vote, cast in person at a meeting called for the
purpose of voting on such approval, of a majority of the Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party.
The Sub-Distributor shall furnish to the Trust, promptly upon its request, such
information as may reasonably be necessary to evaluate the terms of this
Agreement or any extension, renewal or amendment hereof.
10. Amendment or Assignment of
Agreement. This Agreement may not be amended or assigned except as
permitted by the 1940 Act, and this Agreement shall automatically and
immediately terminate in the event of its assignment.
11. Termination of
Agreement. This Agreement may be terminated by any party hereto, without
the payment of any penalty, on not more than upon 60 days’ nor less than 30
days’ prior notice in writing to the other party; provided, that in the case of
termination by the Trust such action shall have been authorized by resolution of
a majority of the Trustees of the Trust who are not parties to this Agreement or
interested persons of any such party, or by vote of a majority of the
outstanding voting securities of each Fund.
12. Miscellaneous. The
captions in this Agreement are included for convenience of reference only and in
no way define or delineate any of the provisions hereof or otherwise affect
their construction or effect.
This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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 requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of Trustees of the Trust of
responsibility for and control of the conduct of the affairs of the
Trust.
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13. Definition of Terms.
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 1940 Act
shall be resolved by reference to such term or provision of the 1940 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 SEC validly issued pursuant to the 1940 Act. Specifically, the terms
“vote of a majority of the outstanding voting securities,” “interested persons,”
“assignment,” and “affiliated person,” as used in Paragraphs 8, 9 and 10 hereof,
shall have the meanings assigned to them by Section 2(a) of the 1940 Act. In
addition, where the effect of a requirement of the 1940 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.
14. Compliance with Securities
Laws. The Trust represents that it is registered as an open-end
management investment company under the 1940 Act, and agrees that it will comply
with all the provisions of the 1940 Act and of the rules and regulations
thereunder. The parties agree to comply with all of the applicable terms and
provisions of the 1940 Act, the 1933 Act and, subject to the provisions of
Section 4(d), all applicable “Blue Sky” laws. The Distributor and the
Sub-Distributor each agree to comply with all of the applicable terms and
provisions of the 1934 Act.
15. 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 Trust, personally, but bind only the trust
property of the Funds. The execution and delivery of this Agreement have been
authorized by the Trustees of the Trust and signed by an officer of the Trust,
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.
16. Notices. Any notice
required to be given pursuant to this Agreement shall be deemed duly given if
delivered or mailed by registered mail, postage prepaid, to the Trust at 000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 or to the Distributor at 000 Xxxxxxxx,
Xxxxx 00xx, Xxx Xxxx, XX 00000, or to the Sub-Distributor at 000 Xxxxxxxxx
Xxxxxx, Xxxxx 000, Xxx Xxxx, XX 00000-0000.
17. Governing Law. This
Agreement shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles. To the extent that the
applicable laws of the State of New York or any of the provisions herein,
conflict with the applicable provisions of the 1940 Act, the later shall
control, and nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or order of the SEC thereunder.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their officers designated as of the day and year first above
written.
By: /s/ Xxxxx Xxxxxx
Xxxxx
Xxxxxx, President
XXXXXXXXXX
XXXXXXX & CO., LLC
By:
/s/ Xxxxx
Xxxxxxx
Name:
Xxxxx
Xxxxxxx
Title:
Vice
Chairman
MATRIX
CAPITAL GROUP
By: /s/ Xxxxx Xxxxxx
Xxxxx
Xxxxxx, Senior Vice President
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Appendix
A
Fund(s)
Subject to This Agreement
To The
Sub-Distribution Agreement among the Capital Management Investment Trust,
Xxxxxxxxxx Xxxxxxx & Co., LLC and Matrix Capital Group, Inc.
Names of
Funds
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Cusip
Number 000000000
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NASADAQ
Symbol CMSSX
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Capital
Management Small-Cap Fund Institutional
Shares
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Cusip
Number 000000000
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NASADAQ
Symbol CMSVX
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Capital
Management Small-Cap Fund Investor
Shares
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Appendix
B
Fees
To
The Sub-Distribution Agreement among the Capital Management Investment Trust,
Xxxxxxxxxx Xxxxxxx & Co., LLC and Matrix Capital Group, Inc.
Sub-Distribution Services
for the Capital Management Small-Cap Fund Institutional & Investor
Shares
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$2,500
Annual fee and will be paid monthly
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Basic Distribution
Services
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No
Fee
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Minimum
annual Fee: None
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NSCC– DTC
Fees
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Transaction
Fees – billed by NSCC to the Fund for
activity
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