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 NASADAQ
Symbol CMEIX
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Capital
Management Mid-Cap Fund Institutional
Shares
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Cusip
Number
000000000 NASADAQ
Symbol CMCIX
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Capital
Management Mid-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 Mid-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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