DIVIDEND DISBURSING
AND TRANSFER AGENT
AGREEMENT
THIS AGREEMENT, made and entered into as of the 20th day of June, 2003, by and
between the PMFM 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
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action or an 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
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Commission 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.
PMFM INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
___________________________(SEAL)
Name: Xxxxxx X. Xxxxxxx
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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