DISTRIBUTION AGREEMENT
This AGREEMENT, dated this the 30th day of November 2004, between the PMFM
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 (the "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 (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 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
Instrument 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 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 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 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 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 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 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
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 the Fund under this Agreement. The Trust shall also
make available a sufficient number of copies of the Fund's current
Prospectus and Statement of Additional Information 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. 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 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 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 Fund's Shares or render
shareholder support services not otherwise provided by the Trust's
transfer agent, administrator, or custodian, including, but not limited
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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.
(d) If so request 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 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 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 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
Fund 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) 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.
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(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 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. 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 "PMFM Investment Trust" means and refers to the
Trustees from time to time serving under the Agreement and Trust
Instrument of the 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 Agreement and Trust Instrument
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 which 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 PMFM Investment Trust, 0000 Xxxxxxxx Xxxx Xxxx -
Xxxxx 0000X, Xxxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx 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 the 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 ("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
of thereof provided that the Distributor provides prior notice to the
Fund and follows any reasonable directions given by the Fund with
respect thereto.
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IN WITNESS THEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above.
PMFM INVESTMENT TRUST
/s/ Xxxxxx X. Xxxxxxx
By: ________________________________
Name: Xxxxxx X. Xxxxxxx
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 November 30, 2004
o PMFM Core Advantage Portfolio Trust
Date Fund commenced operations: June 1, 2005
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