DISTRIBUTION AGREEMENT
This AGREEMENT, dated this the 18th day of August, 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
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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 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
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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 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.
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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
By: /s/ Xxxxxxx X. Xxxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
CAPITAL INVESTMENT GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
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APPENDIX A
Dated as of August 18, 2004
o PMFM Tactical Opportunities Portfolio Trust
Date Fund commenced operations: _______________
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