DISTRIBUTION AGREEMENT
This AGREEMENT, dated this the 19th day of April, 2007, between NCM CAPITAL
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 ("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 ("1933 Act"),
pursuant to a registration statement on Form N-1A "Registration Statement"),
including a prospectus "Prospectus") and a statement of additional information
("SAI"); and
WHEREAS, the Trust has adopted a Plan of Distribution Pursuant to Rule 12b-1
under the 1940 Act ("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 the 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 SAI, 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 SAI.
(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 SAI of the 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 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. 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 SAI. 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 SAI for use by
the Distributor.
4. Fees and Expenses.
(a) In addition to any commissions, fees, or payments authorized by the
Trustees under the Distribution Plan, the Trust will pay or cause to be paid to
the Distributor for services provided and expenses assumed by the Distributor
the fee of $5,000.00 per annum per Fund. Such fee shall be paid to the
Distributor in monthly installments.
(b) The Trust will also pay or cause to be paid the following expenses:
(i) preparation, printing, and distribution to shareholders of the Prospectus
and SAI; (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.
(c) 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 the
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 SAIs 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.
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(d) 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
the 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 SAI
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 SAI 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 SAI 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 60 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).
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9. Subcontract. The Distributor may, at its expense and with the approval
of the Trustees, appoint another firm or company as its sub-distributor or
agent. The Distributor shall not, however, be relieved of any of its obligations
under this Agreement by the appointment of such sub-distributor or agent.
10. 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
"NCM Capital 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.
11. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Distributor hereby agrees that all records that 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.
12. 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 NCM Capital Investment Trust, 0000 Xxxxxx-Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxx,
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 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.
13. Anti-Money Laundering. The Distributor agrees to perform such
anti-money laundering ("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.
14. 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 not to 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 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
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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.
NCM CAPITAL INVESTMENT TRUST
/s/ Xxxxx X. Xxxxx
By: ________________________________
Print Name: Xxxxx X. Xxxxx
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 19, 2007
NCM Capital Mid-Cap Growth Fund
Date Fund commenced operations: April __, 2007
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