THE SHEPHERD LARGE CAP GROWTH FUND
DEALER SELLING AGREEMENT
July 15, 2002
XXXXXX & XXXXX SECURITIES, INC.
One Galleria Tower
00000 Xxxx Xxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Xxxxxx & Xxxxx Securities, Inc. ("C&B") has entered into a distribution
agreement (the "Distribution Agreement"), dated December 1, 2001 with The
Shepherd Large Cap Growth Fund (formerly The Dominion Insight Growth Fund) ("xxx
Xxxx") in which C&B has agreed to act as distributor (the "Distributor") of
shares of each series ("Series") of the Fund. For purposes of the Agreement, the
term ("Shares") shall mean the authorized shares of the relevant series (or
"Class" thereof) of the Fund. This Dealer Agreement shall herein be referred to
as the "Agreement."
1. ROLE OF C&B. Pursuant to the Distribution Agreement, we have agreed to use
our best efforts to make arrangements for securities dealers ("Authorized
Dealers"), which can make the representations set forth in Section 6 of
this Agreement to solicit from the public orders to purchase Shares. This
will confirm our mutual agreement as to the terms and conditions applicable
to your participation as an Authorized Dealer. You understand (a) that we
may, at any time at our option, act as an Authorized Dealer, (b) that we
are seeking to enter into this agreement in counterparts with you and
certain other securities dealers, which also may act as Authorized Dealers,
(c) that, except as we may otherwise agree with you, we may enter into
agreements (which may or may not be the same as this agreement) with other
Authorized Dealers, (d) that the Fund and we may modify, suspend,
terminate, or withdraw entirely the offering of Shares at any time without
giving notice to you pursuant to Section 14 and without incurring any
liability or obligations expressly assumed by us herein. All purchases of
Shares from, and redemptions of Shares by the Fund shall be affected
through us acting on behalf of the Fund. You understand that we shall have
no obligation to sell Shares to you at such times, as we are not acting as
Distributor for the Shares.
2. ROLES OF AUTHORIZED DEALERS.
(a) As an Authorized Dealer, you shall have no obligation to purchase or
sell or to solicit the purchase or sale of Shares. As, when and if you
determine to purchase Shares or you receive a customer order for the
purchase of Shares and you determine to accept such order, you shall
comply with the procedures for the purchase of Shares set forth in the
relevant Prospectus and Statement of
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Additional Information (the "SAI") as most currently amended or
supplemented. The procedure relating to the handling of orders shall
be subject to such further instructions, as we shall forward to you in
writing from time to time.
(b) You agree to offer Shares to the public at the then-applicable
offering price and subject to the minimum investment amount set forth
in the relevant Prospectus and SAI, subject to any waivers or
reductions of sales load (the "Sales Load") or dealer allowances (the
"Dealer Allowances") as described in the relevant Prospectus and SAI
as amended from time to time. Any amendment to a Prospectus and SAI
which affects the Sales Load, Dealer Allowances, waivers or discounts
shall not affect the Sales Loads, Dealer Allowances, discounts, or
waivers with respect to sales on which orders have been accepted by us
prior to the date of notice of such amendment. Your placement of an
order for Shares after the date of any notice of such amendment shall
conclusively evidence your agreement to be bound thereby. The fund and
C&B reserve the right to modify any minimum investment requirements,
subsequent investment requirements, the manner in which Shares are
offered and the Sales Load rates applicable to future purchase of
Shares. You also acknowledge that the amounts charged to the public
for Shares may include such transaction fees ("Transaction Fees") as
may be described in the relevant Prospectus and SAI. In addition, you
may make available Shares through a "no transaction fee" program, to
the extent permitted in the relevant section of the Prospectus and
SAI. C&B shall make a reasonable effort to notify you of any
re-determination or suspension of the public offering price, but C&B
shall be under no liability for failure to do so. Reduced Sales Loads
also may be available as a result of a cumulative discount or pursuant
to a right of accumulation as set forth in the relevant Prospectus or
SAI. You agree to advise us promptly as to the amounts of any sales
made by you to the public qualifying for reduced Sales Loads.
(c) You agree to purchase Shares from us only to cover purchase orders
already received from your customers, or for your own bona fide
investment. You will not withhold placing with us orders received from
your customers so as to profit yourself as a result of such
withholding. All orders for Shares are subject to acceptance or
rejection by C&B or the Fund in the sole discretion of either.
(d) In purchasing Shares through us, you shall rely solely on the
presentations contained in the relevant Prospectus and SAI and any
supplemental sales material. We will indemnify you and hold you
harmless as to any representations made in the then-current
Prospectus, SAI and any other supplemental material, which we supply
to you and you have not altered. You will not furnish to any person
any information relating to the Shares, the Fund, and any series or us
that is inconsistent with information contained in the relevant
Prospectus an SAI, or any printed information issued by the Fund or us
as information supplemental to such prospectus and SAI or cause any
advertisement to be published or posted in any public place without
our consent and the consent of the Fund.
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(e) In all sales of Shares to the public, you shall act as dealer for your
own account, whether as agent or as principal. Nothing herein shall be
deemed to constitute you or any other Authorized Dealer. You agree not
to act as our agent and not to claim to act as our agent or as agent
to any of the foregoing. You shall be deemed to be an independent
contractor and you shall have no authority to act for or represent the
Fund. You will not act as an "underwriter" or "distributor" of Shares,
as those terms are used in the Investment Company Act of 1940, as
amended (the "Investment Company Act") the Securities act of 1933, as
amended (the "Securities Act"), and rules and regulations there under.
You agree to buy Shares only through us and not from any other source
and to sell Shares only to us, as the Fund's redemption agent, and not
to any other purchaser.
(f) You agree to accept orders for the redemption of Shares and to
transmit to the Fund such orders and all additional material required
to complete the redemption as described in the relevant Prospectus and
SAI.
(g) You agree that we shall have full authority to act upon your express
instructions to repurchase or exchange Shares through us on behalf of
your customers under the terms of your conditions provided in the
relevant Prospectus an SAI. You agree to hold us, our parent company,
subsidiaries, affiliates, and their respective officers, directors,
employees, and agents harmless as a result of any action taken with
respect to authorized repurchases or exchanges upon your express
instructions.
3. COMPENSATION.
(a) You will be entitled to receive that portion of the Sales Load
allocated to Authorized Dealers as set forth in the relevant
Prospectus and SAI in connection with purchases of Shares affected by
or through you. You acknowledge that the relevant Prospectus and SAI
will set forth a description of waivers or reduction of the Sales Load
or Transaction Fees, if any, to which you are entitled, after
deduction of the portion allocated to us, which was received by us and
not yet paid to you.
(b) If payment in Federal Funds in not reviewed by the third business day
after the execution of the order, C&B reserves the right, without any
notice, to cancel the sale and to hold you responsible for any loss,
including loss of profits, suffered by C&B or by the Fund resulting
from such failure.
4. ORDERS AND PAYMENT FOR SHARES. Upon receipt from you for any order to
purchase Shares and if a new account, receipt of a fully executed Account
Information Form, we shall confirm such order to you in writing or by wire
to be followed by a confirmation in writing. If any such orders are faxed
to the Transfer Agent, they must be transmitted no later than 4:00 p.m.
Easter Standard Time. Any faxes sent to the Transfer Agent must be followed
with a phone call to confirm receipt. Additional instructions may be
forwarded to you from time to time. Payment for Shares ordered from us
shall be made in Federal
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Funds and must be received by the Fund's agent, Fund Services, Inc., within
three business days of a receipt and acceptance made by us of an order. You
agree that before transmitting investors' funds, you will comply with
Rule15e2-4 under the Securities Exchange Act of 1934, as amended (the
"Exchange Acts").
5. BLUE SKY REGISTRATION. The trust has registered an indefinite number of
Shares under the Securities Act. Upon application by you, we shall inform
you as to any advice received by us concerning the jurisdictions in which
the Shares have been registered for offer or sale or are exempt under the
securities or blue sky laws of such jurisdictions, but we assume no
obligations or responsibility as to your right to offer or sell Shares in
any jurisdiction (other than under the federal laws of the United States).
You agree to offer Shares only in those states in which the Shares are
registered for offer or sale or exempt under the securities or blue-sky
laws of such state. You acknowledge that you may not offer or sell Shares
outside the United States, its territories or its possessions, and you
agree to take, at your expense, such action if any as may be necessary to
comply with the laws of such foreign jurisdictions.
6. REPRESENTATION, WARRANTIES AND UNDERTAKINGS. You represent and warrant to
and undertake this:
(a) You are familiar with Securities Act Release No. 4968, Rule 15e2-8
under the Exchange Act, Section 4 of Securities Act and Section 34(3)
of the Investment Company Act relating to the distribution and
delivery of preliminary and final prospectuses and will comply
therewith. You will deliver thereafter to any customer whose Shares
you are holding as record holder copies of the annual and interim
reports and proxy solicitation materials relating to the Shares.
(b) You agree to keep an accurate record of distributions (including
dates, number of xxxxx and persons to whom sent) of copies of any
prospectus (an any SAI) for each Series of the Fund (or any amendment
or supplement) and promptly upon request by C&B, to bring all
subsequent changes to such prospectus to the attention of anyone to
whom such material shall have been distributed. You further agree to
furnish to persons who receive a confirmation of sale of Shares of any
Series of the Fund a copy of the relevant Prospectus for such Series
of the Fund filed pursuant to Rule 497 under the Securities Act. You
further agree to furnish a copy to the relevant SAI to anyone who
request it within three business days of your receipt of the request.
(c) You will make all reasonable efforts to obtain proxies from such
purchasers whose Shares you are holding as record holder. Additional
copies of a Series' Prospectuses, SAI annual or interim reports, proxy
solicitation materials any other printer information supplemental to
such material will be supplied as reasonably requested.
(d) You are a broker/dealer registered with the Securities and Exchange
Commission (the "SEC") and a member in a good standing of the National
Association
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of Securities Dealers, Inc. (the "NASD") or, in the alternative, you
are a foreign dealer or bank, not required to be registered as a
broker/dealer with the SEC and not required or eligible to be a member
of the NASD. If you are such a NASD member, you agree that in making
sales of Shares of the one or more Classes of Shares of each Series of
the Fund, you will comply with all applicable rules of the NASD,
including without limitation, rules pertaining to the opening,
approval, supervision and monitoring of customer accounts, the NASD's
interpretation with respect to Free-riding and Withholding and
Sections 2730, 2740 and 2750 of the NASD's Conduct Rules as though you
were a member in good standing of the NASD and to comply with Section
2420 of such Conduct Rules as it applies to a nonmember broker or
dealer in a foreign country. You agree to abide by all other rules,
and Regulations of the NASD, including Section 2830 of its Conduct
Rules, and all applicable state and Federal laws, rules and
regulations. Your acceptance also constitutes a representation that
you have been duly authorized by proper corporate or partnership
action to enter into this Agreement and to perform your obligations
hereunder. You will not accept any orders from any broker, dealer or
financial institution that is purchasing Shares from you with a view
towards distribution unless you have obtained such person's or
entity's written consent to be bound by the terms of this agreement.
(e) You undertake to comply with respect to your offering of Shares to the
public pursuant to this agreement, with all Applicable provisions of
the Securities Act, the Exchange Act the Investment Company Act, the
rules and regulations under these Acts and with applicable rules of
the NASD.
(f) You represent that any compensation payable to you hereunder (i) will
be disclosed to your customers; (ii) will be authorized by your
customers; and (iii) will not result in an excessive fee to you. In
addition, if an issue relating to a Class 12b-1 Plan (as defined
below) is submitted for shareholder approval, you will vote any Shares
held for your own account in the same proportion as the vote of the
Shares held by your customers on such issue. You further represent
that in effecting the purchase or redemption of Shares in accordance
with the terms of this Agreement: a (i) you shall act solely as agent
for the account of your customer, (ii) purchase of redemption of
Shares shall be initiated solely upon the instruction and order of
your customer; (iii) the customer will have full beneficial ownership
of any Shares purchases upon its authorization and order; and (iv) all
transactions shall be for the account of the customer and under no
circumstances for your account, and shall be without recourse to you.
Under no circumstances will you make any oral or written
representation to the contrary.
7. 12B-1 PLAN. Those series or classes set forth as having a 12b-1 Plan have
adopted a plan to pursuant to Rule 12b-1 under the Investment Company Act
(a "12b-1 Plan") as described in the relevant Prospectus and SAI. To the
extent you provide services of the type contemplated by a 12b-1 Plan, you
may be entitled to receive compensation from us as set forth in that Plan.
All compensation, including fees under the 12b-1 Plan, shall be payable to
you only to the extent that funds are received and are in the possession of
the Distributor.
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8. SHAREHOLDER SERVICING PLAN. Not presently available.
9. INDEMNIFICATION. The parties to this Agreement hereby agree to indemnify
and hold harmless each other, their officers and directors, and any person
who is or may be deemed to be a controlling person of each other, from and
against any losses, claims, damages, liabilities, or expenses (including
any reasonable fees of counsel) to which any person or entity may become
subject in so far as such losses, claims, damages, liabilities, or expense
(or actions in respect thereof) arise out of or are based upon (a) any
untrue statement or alleged untrue statement of material fact, or any
commission to state a material fact made or omitted by it herein, or (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
10. NSCC INDEMNITY SHAREHOLDER AND HOUSE ACCOUNTS. In consideration of the
Distributor liquidating, exchanging and/or transfer of uncertified Shares
for your customers without the xxx of original or underlying documentation
supporting such instruction (e.g. a signed stock power or signature
guarantees), you hereby agree to indemnify the Distributor and the Fund
against any losses, including reasonable attorney's fees, that may arise
from such liquidation, exchange an/or transfer or uncertificated Shares
upon your direction. This indemnification shall apply only to the
liquidation, exchange and/or transfer or uncertificated Shares in a
shareholder and house accounts executed as wire orders transmitted via
NSCC's Fund/SERV system. You represent and warrant to the Fund and the
Distributor that your customers shall authorize all such transactions.
11. TERMINATION. Either party to this agreement may cancel this Agreement by
written notice to the other party. Such cancellation shall be effective
upon receipt of such notice.
12. REPRESENTATIONS TO SURVIVE. The agreements, representations, warrantees and
other statements set forth in or made pursuant to this Agreement will
remain in full force and effect, to the extent permitted by applicable law,
regardless of any investigation made by or on behalf of us or any
Authorized Dealer. The provisions of Section six and nine of this Agreement
shall survive the offer and sale of the Shares and the termination or
cancellation of this Agreement, to the extent permitted by applicable law.
13. NO ASSOCIATION. Nothing herein contained constitutes as agreement to become
partners with you or any other Authorized Dealer, but you shall be liable
for your proportionate share of any tax, liability or expense based on any
claim arising from the sale of Shares under this Agreement. You and we
hereby agree that there is no intent to form a partnership, and agree not
to take any position inconsistent with that intent. We shall not be under
any liability to you, except for obligations expressly assumed by us in
this Agreement and liabilities under Section 11(f) of the Securities Act,
and no obligations on our part shall be implied or inferred here from.
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14. RECORD KEEPING. You will maintain all records required by law to be kept by
you relating to transactions in the Shares and, upon request by the Fund,
promptly make such of these records available to the Fund, that the Fund
may reasonably request in connection with its operations.
15. NOTICES. Notices hereunder shall be deemed to have been duly given if
delivered by hand of facsimile (a) if to you, at your address or facsimile
number set forth below and (b) if to us, to C&B Securities Corp., 00000
Xxxx Xx. Xxxxx 000, Xxxxxx, XX, 00000; attention Xxxx Xxxxxx, (800) 687
9494.
16. AMENDMENTS. We may modify this Agreement at any time by written notice to
you. The first order placed by you subsequent to the giving of such notice
shall be deemed to be acceptance by you of the modification described in
such notice.
17. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Texas.
18. ARBITRATION. Any controversy or claim arising cut of or relating to this
Agreement, or any breach thereof, shall be settled by arbitration in
accordance with the Rules of NASD. Such arbitration shall be commenced
within one year after the cause of action forming the basis of the
controversy or claim accrued. The arbitration shall be conducted in Dallas,
TX before three arbitrators, all of who shall be from the securities
industry. Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
Please confirm your agreement by signing and returning to us the two
enclosed duplicate copies of this Agreement. Upon our acceptance hereof,
the Agreement shall constitute a valid and binding contract between us.
After our acceptance, we will deliver to you fully executed copy of this
Agreement.
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C&B Securities Corp.
By: ____________________________________
Name: ______________________________
Title: _____________________________
Confirmed:
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(Name of Authorized Dealer)
Date: ________________________________
By: ______________________________________________________
(Authorized Signature)
Title: ___________________________________________________
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Address
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Fax Number
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Telephone Number
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Firm Taxpayer Identification Number
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