DIVIDEND DISBURSING
AND TRANSFER AGENT
AGREEMENT
THIS AGREEMENT, made and entered into as of the 2nd day of April, 2003, by and
between the TURNAROUND INVESTMENT TRUST, a Delaware statutory trust (the
"Trust"), and NORTH CAROLINA SHAREHOLDER SERVICES, LLC, a North Carolina limited
liability company (the "Transfer Agent").
WHEREAS, the Trust is an open-end management investment company of the series
type which is registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Transfer Agent is in the business of providing dividend disbursing,
transfer agent, and shareholder services to investment companies.
NOW THEREFORE, the Trust and the Transfer Agent do mutually promise and agree as
follows:
1. Employment. The Trust hereby employs Transfer Agent to act as dividend
disbursing and transfer agent for each Fund of the Trust. Transfer Agent,
at its own expense, shall render the services and assume the obligations
herein set forth subject to being compensated therefore as herein provided.
2. Delivery of Documents. The Trust has furnished the Transfer Agent with
copies properly certified or authenticated of each of the following:
a) The Trust's Agreement and Declaration of Trust ("Trust Instrument")
and Certificate of Trust, as filed with the State of Delaware, (such
Trust Instrument, as presently in effect and as it shall from time to
time be amended);
b) The Trust's By-Laws (such By-Laws, as presently in effect and as they
shall from time to time be amended, are herein called the "By-Laws");
c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Transfer Agent and approving this Agreement; and
d) The Trust's Registration Statement on Form N-1A under the 1940 Act and
under the Securities Act of 1933 as amended, (the "1933 Act"),
including all exhibits, relating to shares of beneficial interest of,
and containing the Prospectus of, each Fund of the Trust (herein
called the "Shares") as filed with the Securities and Exchange
Commission and all amendments thereto.
The Trust will also furnish the Transfer Agent with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing.
3. Duties of the Transfer Agent. Subject to the policies and direction of the
Trust's Board of Trustees, the Transfer Agent will provide day to day
supervision for the dividend disbursing, transfer agent, and shareholder
servicing operations of each of the Trust's Funds. Services to be provided
shall be in accordance with the Trust's organizational and registration
documents as listed in paragraph 2 hereof and with the Prospectus of each
Fund of the Trust. The Transfer Agent further agrees that it:
a) Will conform with all applicable rules and regulations of the
Securities and Exchange Commission and will, in addition, conduct its
activities under this Agreement in accordance with regulations of any
other federal and state agency which may now or in the future have
jurisdiction over its activities.
b) Will provide, at its expense, the non-executive personnel and data
processing equipment and software necessary to perform the Shareholder
Servicing functions shown on Exhibit A hereof; and
c) Will provide all office space and general office equipment necessary
for the dividend disbursing, transfer agent, and shareholder servicing
activities of the Trust except as may be provided by third parties
pursuant to separate agreements with the Trust.
Notwithstanding anything contained in this Agreement to the contrary, the
Transfer Agent (including its directors, officers, employees and agents)
shall not be required to perform any of the duties of, assume any of the
obligations or expenses of, or be liable for any of the acts or omissions
of, any investment advisor of a Fund of the Trust or other third party
subject to separate agreements with the Trust. The Transfer Agent shall not
be responsible hereunder for the administration of the Code of Ethics of
the Trust which shall be under the responsibility of the investment
advisors, except insofar as the Code of Ethics applies to the personnel of
the Transfer Agent. It is the express intent of the parties hereto that the
Transfer Agent shall not have control over or be responsible for the
placement (except as specifically directed by a Shareholder of the Trust),
investment or reinvestment of the assets of any Fund of the Trust. The
Transfer Agent may from time to time, subject to the approval of the
Trustees, obtain at its own expense the services of consultants or other
third parties to perform part or all of its duties hereunder, and such
parties may be affiliates of the Transfer Agent.
4. Services Not Exclusive. The services furnished by the Transfer Agent
hereunder are not to be deemed exclusive, and the Transfer Agent shall be
free to furnish similar services to others so long as its services under
this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Transfer Agent 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.
6. Expenses. During the term of this Agreement, the Transfer Agent will
furnish at its own expense its office space and the executive, supervisory
and clerical personnel reasonably necessary to perform of its obligations
under this Agreement. The Trust assumes and shall be responsible for all
other expenses of the Trust and/or Fund(s) not otherwise allocated in this
Agreement.
7. Compensation. For the services provided and the expenses assumed by the
Transfer Agent pursuant to this Agreement, the Trust will pay the Transfer
Agent and the Transfer Agent will accept as full compensation the fees and
expenses as set forth on Exhibit B attached hereto. Special projects, not
included herein and requested in writing by the Trustees, shall be
completed by the Transfer Agent and invoiced to the Trust as mutually
agreed upon.
8.(a)Limitation of Liability. The Transfer Agent shall not be liable for any
loss, damage or liability related to or resulting from the placement
(except as specifically directed by a Shareholder of the Trust), investment
or reinvestment of assets in any Fund of the Trust or the acts or omissions
of any Fund's investment advisor or any other third party subject to
separate agreements with the Trust. Further, the Transfer Agent shall not
be liable for any error of judgment or mistake of law or for any loss or
damage suffered by the Trust in connection with the performance of this
Agreement or any agreement with a third party, except a loss resulting
directly from (i) a breach of fiduciary duty on the part of the Transfer
Agent with respect to the receipt of compensation for services; or (ii)
willful misfeasance, bad faith or gross negligence on the part of the
Transfer Agent in the performance of its duties or from reckless disregard
by it of its duties under this Agreement.
8.(b)Indemnification of Transfer Agent. Subject to the limitations set forth in
this Subsection 8(b) and provided the Transfer Agent has exercised
reasonable customary care in the performance of its duties under this
Agreement, the Trust shall indemnify, defend and hold harmless (from the
assets of the Fund or Funds to which the conduct in question relates) the
Transfer Agent against all loss, damage and liability, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by the Transfer Agent in connection with the defense
or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, related
to or resulting from this Agreement or the performance of services
hereunder, except with respect to any matter as to which it has been
determined that the loss, damage or liability is a direct result of (i) a
breach of fiduciary duty on the part of the Transfer Agent with respect to
the receipt of compensation for services; or (ii) willful misfeasance, bad
faith or gross negligence on the part of the Transfer Agent in the
performance of its duties or from reckless disregard by it of its duties
under this Agreement (either and both of the conduct described in clauses
(i) and (ii) above being referred to hereinafter as "Disabling Conduct"). A
determination that the Transfer Agent is entitled to indemnification may be
made by (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that the Transfer Agent was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
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administrative proceeding against the Transfer Agent for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based
upon a review of the facts, that the Transfer Agent was not liable by
reason of Disabling Conduct by, (a) vote of a majority of a quorum of
Trustees who are neither "interested persons" of the Trust as the quoted
phrase is defined in Section 2(a)(19) of the 1940 Act nor parties to the
action, suit or other proceeding on the same or similar grounds that is
then or has been pending or threatened (such quorum of such Trustees being
referred to hereinafter as the "Independent Trustees"), or (b) an
independent legal counsel approved by the Trustees, including a majority of
Independent Trustees, (hereinafter referred to as an "independent legal
counsel") in a written opinion. Expenses, including accountants' and
counsel fees so incurred by the Transfer Agent (but excluding amounts paid
in satisfaction of judgments, in compromise or as fines or penalties),
shall be paid from time to time by the Fund or Funds to which the conduct
in question related in advance of the final disposition of any such action,
suit or proceeding; provided, that the Transfer Agent shall have undertaken
to repay the amounts so paid unless it is ultimately determined that it is
entitled to indemnification of such expenses under this Subsection 8(b) and
if (i) the Transfer Agent shall have provided security for such
undertaking, (ii) the Trust shall be insured against losses arising by
reason of any lawful advances, or (iii) a majority of the Independent
Trustees, or an independent legal counsel in a written opinion, shall have
determined, based on a review of readily available facts (as opposed to a
full trial-type inquiry), that there is reason to believe that the Transfer
Agent ultimately will be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Transfer Agent
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any other
expenses shall be provided unless such indemnification shall be approved
(i) by a majority of the Independent Trustees or (ii) by an independent
legal counsel in a written opinion. Approval by the Independent Trustees
pursuant to clause (i) shall not prevent the recovery from the Transfer
Agent of any amount paid to the Transfer Agent in accordance with either of
such clauses as indemnification of the Transfer Agent is subsequently
adjudicated by a court of competent jurisdiction not to have acted in good
faith in the reasonable belief that the Transfer Agent's action was in or
not opposed to the best interests of the Trust or to have been liable to
the Trust or its Shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in its
conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Transfer Agent may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights
to indemnification to which Trustees, officers or other personnel of the
Trust, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability
insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Transfer Agent
is entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for that
purpose.
The provisions contained in Section 8 shall survive the expiration or other
termination of this Agreement, shall be deemed to include and protect the
Transfer Agent and its directors, officers, employees and agents and shall
inure to the benefit of its/their respective successors, assigns and
personal representatives.
9. Duration and Termination. This Agreement shall become effective as of the
date hereof and shall thereafter continue in effect unless terminated as
herein provided. This Agreement may be terminated by either party hereto
(without penalty) at any time by giving not less than 60 days' prior
written notice to the other party hereto. Upon termination of this
Agreement, the Trust shall pay to the Transfer Agent such compensation as
may be due as of the date of such termination, and shall likewise reimburse
the Transfer Agent for any out-of-pocket expenses and disbursements
reasonably incurred by the Transfer Agent to such date.
10. Amendment. This Agreement may be amended by mutual written consent of the
parties. If, at any time during the existence of this Agreement, the Trust
deems it necessary or advisable in the best interests of the Trust that any
amendment of this Agreement be made in order to comply with the
recommendations or requirements of the Securities and Exchange Commission
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or state regulatory agencies or other governmental authority, or to obtain
any advantage under state or federal laws, and shall notify the Transfer
Agent of the form of Amendment which it deems necessary or advisable and
the reasons therefore, and if the Transfer Agent declines to assent to such
amendment, the Trust may terminate this Agreement forthwith.
11. Notice. Any notice that is required to be given by the parties to each
other under the terms of this Agreement shall be in writing and will be
deemed sufficient if personally delivered or sent by registered or
certified mailed, postage prepaid, address to the other party at the
principal place of business of such party.
12. Construction. This Agreement shall be governed and enforced in accordance
with the laws of the State of North Carolina. If any provision of this
Agreement, or portion thereof, shall be determined to be void or
unenforceable by any court of competent jurisdiction, then such
determination shall not affect any other provision of this Agreement, or
portion thereof, all of which other provisions and portions thereof shall
remain in full force and effect. If any provision of this Agreement, or
portion thereof, is capable of two interpretations, one of which would
render the provision, or portion thereof, void and the other of which would
render the provision, or portion thereof, valid, then the provision, or
portion thereof, shall have the meaning which renders it valid.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers effective as of the date indicated above.
TURNAROUND INVESTMENT TRUST
By: /s/ Xxxx X. Xxxxx (SEAL)
Name: Xxxx X. Xxxxx
Title: Chairman
NORTH CAROLINA SHAREHOLDER SERVICES, LLC
D/B/A NC SHAREHOLDER SERVICES
By: /s/ Xxxx X. Marriott, Jr. (SEAL)
Name: Xxxx X. Marriott, Jr.
Title: Managing Director
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Exhibit A
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SHAREHOLDER SERVICING FUNCTIONS
(1) Process new accounts.
(2) Process purchases of Fund shares, both initial and subsequent in accordance
with conditions set forth in the Fund's prospectus.
(3) Transfer shares of capital stock to an existing account or to a new account
upon receipt of required documentation in good order.
(4) Distribute dividends and/or capital gain distributions. This includes
disbursement as cash or reinvestment and to change the disbursement option
at the request of shareholders.
(5) Process exchanges between funds, (process and direct purchase/redemption
and initiate new account or process to existing account).
(6) Make miscellaneous changes to records, including, but not necessarily
limited to, address changes and changes in plans (such as systematic
withdrawal, dividend reinvestment, etc.).
(7) Prepare and mail a year-to-date confirmation and statement as each
transaction is recorded in a shareholder account as follows: original to
shareholder. Duplicate confirmations to be available on request within
current year.
(8) Handle telephone calls and correspondence in reply to shareholder requests
except those items otherwise set forth herein.
(9) Daily control and reconciliation of Fund shares.
(10) Prepare address labels or confirmations for four reports to shareholders
per year.
(11) Mail and tabulate proxies for one Meeting of Shareholders annually,
including preparation of certified shareholder list and daily report to
Fund management, if required.
(12) Prepare, with the assistance of the Trust's accountants, and mail annual
Form 1099 and 5498 to shareholders to whom dividends or distributions are
paid, with a copy for the IRS.
(13) Provide readily obtainable data which may from time to time be requested
for audit purposes.
(14) Replace lost or destroyed checks.
(15) Continuously maintain all records for active and closed accounts according
to the Investment Company Act of 1940 and regulations provided thereunder.
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Exhibit B
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TRANSFER AGENT'S COMPENSATION SCHEDULE
For the services delineated in the DIVIDEND DISBURSING AND TRANSFER AGENT
AGREEMENT, the Transfer Agent shall be compensated monthly, according to the
following fee schedule.
Shareholder servicing fee:
--------------------------
$15.00 per shareholder per year per fund
Minimum fee of $1,750 per month per fund, plus $500 per month for each
additional class of shares.
In addition, the Transfer Agent shall be entitled to reimbursement of actual
out-of-pocket expenses incurred by the Transfer Agent on behalf of the Trust or
the Fund.
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