DISTRIBUTION AGREEMENT
AGREEMENT dated as of _________________________ between Firsthand
Funds Trust (the "Fund"), an open-end, management investment company organized
as a trust under the laws of the State of ____________________ and ALPS Mutual
Funds Services, Inc., a Colorado corporation and a registered broker-dealer
under the Securities Exchange Act of 1934, having its principal place of
business in Denver, Colorado (the "Distributor").
WHEREAS, the Fund wishes to employ the services of the Distributor in
connection with the promotion and distribution of the shares of each series of
the Fund (the "Shares"); and
NOW, THEREFORE, in consideration of the mutual promises and
undertakings herein contained, the parties agree as follows:
1. Documents - The Fund has furnished the Distributor with copies of the
Fund's Certificate of Incorporation, advisory agreement, custodian agreement,
transfer agency agreement, administration agreement, current prospectuses and
statement of additional information, and all forms relating to any plan, program
or service offered by the Fund. The Fund shall furnish promptly to the
Distributor a copy of any amendment or supplement to any of the above-mentioned
documents. The Fund shall furnish promptly to the Distributor any additional
documents necessary or advisable to perform its functions hereunder. As used in
this Agreement the terms "registration statement", "prospectus" and "statement
of additional information" shall mean any registration statement, prospectus and
statement of additional information filed by the Fund with the Securities and
Exchange Commission ("SEC") and any amendments and supplements thereto which at
any time shall have been filed with the SEC.
2. Sales of Shares - The Fund grants to the Distributor the right to sell
the Shares as agent on behalf of the Fund, during the term of this Agreement,
subject to the registration requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the Investment Company Act of 1940 (the "1940 Act")
and of the laws governing the sale of securities in the various states ("Blue
Sky Laws"), under the terms and conditions set forth in this Agreement. The
Distributor shall have the right to sell, as agent on behalf of the Fund, the
Shares covered by the registration statement, prospectus and statement of
additional information for the Fund then in effect under the 1933 Act and 1940
Act.
3. Sales of Shares by the Fund - The rights granted to the Distributor
shall be nonexclusive in that the Fund reserves the right to sell Shares to
investors on applications received and accepted by the Fund.
4. Public Offering Price - Except as otherwise noted in the Fund's current
prospectuses and/or statement of additional information, all Shares sold to
investors by the Distributor or the Fund will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per Share, as determined in
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the manner described in the Fund's current prospectuses and/or statement of
additional information.
5. Suspension of Sales - The Fund reserves the right to suspend sales and
the Distributor's authority to process orders for Shares on behalf of the Fund
if, in the judgment of the Fund, it is in the best interests of the Fund to do
so. Suspension will continue for such period as may be determined by the Fund.
6. Solicitation of Sales - In consideration of these rights granted to the
Distributor, the Distributor agrees to use its best efforts to solicit orders
for the sale of the Shares at the public offering price and will undertake such
advertising and promotion as it believes is reasonable in connection with such
solicitation. The Distributor shall review and file such materials with the SEC
and the National Association of Securities, Inc. (the "NASD") to the extent
required by the Securities Exchange Act of 1934 (the "Exchange Act"), and the
1940 Act and the rules and regulations thereunder, and by the rules of the NASD.
This shall not prevent the Distributor from entering into like arrangements
(including arrangements involving the payment of underwriting commissions) with
other issuers. The Distributor will act only on its own behalf as principal
should it choose to enter into selling agreements with selected dealers or
others.
7. Authorized Representations - The Distributor is not authorized by the
Fund to give any information or to make any representations other than those
contained in the registration statement or prospectus and statement of
additional information, or contained in shareholder reports or other material
that may be prepared by or on behalf of the Fund for the Distributor's use.
Consistent with foregoing, the Distributor may prepare and distribute sales
literature or other material as it may deem appropriate in consultation with the
Fund, provided such sales literature complies with applicable law and
regulation.
8. Registration of Shares - The Fund agrees that it will take all action
necessary to register the Shares under the 1933 Act and the 1940 Act (subject to
the necessary approval of its shareholders). The Fund shall make available to
the Distributor, at the Distributor's expense, such number of copies of its
prospectuses and statements of additional information as the Distributor may
reasonably request. The Fund shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of Shares of the
Fund.
9. Distribution Fees and Expenses - The Distributor shall furnish, at its
expense and without cost to the Fund, the services of personnel to the extent
that such services are required to carry out its obligations under this
Agreement. Such personnel shall consist of one or more persons, during normal
business hours (7:00 a.m. to 6:00 p.m. mountain time), to respond to telephone
questions with respect to the Distributor's responsibilities to the Fund.
10. Fund Expenses - Unless otherwise agreed to by the parties hereto in
writing or by the Fund and the Fund's other agents, the Distributor shall not be
responsible for fees
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and expenses in connection with (a) filing of any registration statement,
printing and the distribution of any prospectus and statement of additional
information under the 1933 Act and/or the 1940 Act and amendments prepared for
use in connection with the offering of Shares for sale to the public, preparing,
setting in type, printing and mailing the prospectus, statement of additional
information and any supplements thereto sent to existing shareholders, (b)
preparing, setting in type, printing and mailing any report (including annual
and semi-annual reports) or other communication to shareholders of the Fund, and
(c) with the Blue Sky registration and qualification of Shares for sale in the
various states in which the officers of the Fund shall determine it advisable to
qualify such Shares for sale (including registering the Fund as a broker or
dealer or any officer of the Fund as agent or salesman in any state).
11. Use of the Distributor's Name - The Fund shall not use the name of the
Distributor, or any of its affiliates, in any prospectus or statement of
additional information, sales literature, and other material relating to the
Fund in any manner without the prior written consent of the Distributor (which
shall not be unreasonably withheld); provided, however, that the Distributor
hereby approves all lawful uses of the names of the Distributor and its
affiliates in the prospectus and statement of additional information of the Fund
and in all other materials which merely refer to accurate terms to their
appointment hereunder or which are required by the SEC, NASD, OCC or any state
securities authority.
12. Use of the Fund's Name - Neither the Distributor nor any of its
affiliates shall use the name of the Fund in any publicly disseminated
materials, including sales literature in any manner without the prior consent of
the Fund (which shall not be unreasonably withheld); provided, however, that the
Fund hereby approves all lawful uses of its name in any required regulatory
filings of the Distributor which merely refer in accurate terms to the
appointment of the Distributor hereunder, or which are required by the SEC,
NASD, OCC or any state securities authority.
13. Insurance - The Distributor agrees to maintain fidelity bond and
liability insurance coverages which are, in scope and amount, consistent with
coverages customary for distribution activities. The Distributor shall notify
the Fund upon receipt of any notice of material, adverse change in the terms or
provisions of its insurance coverage. Such notification shall include the date
of change and the reason or reasons therefor. The Distributor shall notify the
Fund of any material claims against it, whether or not covered by insurance, and
shall notify the Fund from time to time as may be appropriate of the total
outstanding claims made by it under its insurance coverage.
14. Indemnification - The Fund agrees to indemnify and hold harmless the
Distributor and each of its directors and officers and each person, if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act,
against any loss, liability, claim, damages or expenses (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any Shares, based upon the
ground that the registration statement, prospectus, statement of additional
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information, shareholder reports or other information filed or made public by
the Fund (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading under the 1933 Act, the
1940 Act or any other statute or the common law. However, the Fund does not
agree to indemnify the Distributor or hold it harmless to the extent that the
statement or omission was made in reliance upon, and in conformity with,
information furnished to the Fund by or in behalf of the Distributor. In no case
(i) is the indemnity of the Fund in favor of the Distributor or any person
indemnified to be deemed to protect the Distributor or any person against any
liability to the Fund or its security holders to which the Distributor or such
person would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Fund to be liable under its indemnity agreement contained in the paragraph with
respect to any claim made against the Distributor or any person indemnified
unless the Distributor or person, as the case may be, shall have notified the
Fund in writing of the claim promptly after the summons or other first written
notification giving information of the nature of the claims shall have been
served upon the Distributor or any such person (or after the Distributor or such
person shall have received notice of service on any designated agent). However,
failure to notify the Fund of any claim shall not relieve the Fund from any
liability which it may have to any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Fund shall be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any claims, and if the Fund elects to assume the defense, the defense
shall be conducted by counsel chosen by the Fund. In the event the Fund elects
to assume the defense of any suit and retain counsel, the Distributor, officers
or directors or controlling person(s), defendant(s) in the suit, shall bear the
fees and expenses of any additional counsel retained by them. If the fund does
not elect to assume the defense of any suit, it will reimburse the Distributor,
officers or directors or controlling person(s) or defendant(s) in the suit for
the reasonable fees and expenses of any counsel retained by them. The Fund
agrees to notify the Distributor promptly of the commencement of any litigation
or proceeding against it or any of its officers in connection with the issuance
or sale of any of the Shares.
The Distributor also covenants and agrees that it will indemnify and hold
harmless the Fund and each of its officers and person, if any, who controls the
Fund within the meaning of Section 15 of the 1933 Act, against any loss,
liability, damages, claims or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, damages, claim or
expense and reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any Shares, based upon the 1933 Act, the 1940 Act
or any other statute or common law, alleging (a) any wrongful act of the
Distributor or any of its employees or (b) that any sales literature,
advertisements, information, statements or representations used or made by the
Distributor or any of its affiliates or employees or that the registration
statement, prospectus, statement of additional information, (as from time to
time amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order
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to make the statements not misleading, insofar as the statement or omission was
made in reliance upon, and in conformity with, information furnished to the Fund
by or on behalf of the Distributor. In no case (i) is the indemnity of the
Distributor in favor of the Fund or any person indemnified to be deemed to
protect the Fund or any person against any liability to which the Fund or such
person would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or person, as the case may be, shall have notified
the Distributor in writing of the claim promptly after the summons or other
first written notification giving information of the nature of the claim shall
have been served upon the Fund or any such person (or after the Fund or such
person shall have received notice of service on any designated agent). However,
failure to notify the Distributor of any claim shall not relieve the Distributor
from any liability which it may have to the Fund or any person against whom the
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. In the case of any notice to the Distributor it shall be
entitled to participate, at its own expense, in the defense or, if it so elects,
to assume the defense of any suit brought to enforce the claim, and if the
Distributor elects to assume the defense, the defense shall be consulted by
counsel chosen by it and satisfactory to the Fund, to its officers and to any
controlling person(s) or defendant(s) in the suit. In the event that the
Distributor elects to assume the defense of any suit and retain counsel, the
Fund or controlling person(s), defendant(s) in the suit, shall bear the fees and
expense of any additional counsel retained by them. If the Distributor does not
elect to assume the defense of any suit, it will reimburse the Fund, officers or
controlling person(s), defendant(s) in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Distributor agrees to notify the
Fund promptly of the commencement of any litigation or proceedings against it in
connection with the Fund and sale of any of the Shares.
15. Supplemental Information - The Distributor and the Fund shall regularly
consult with each other regarding the Distributor's performance of its
obligations under this Agreement. In connection therewith, the Fund shall submit
to the Distributor at a reasonable time in advance of filing with the SEC copies
of any amended or supplemented registration statement (including exhibits) under
the 1933 Act and the 1940 Act; provided, however, that nothing contained in this
Agreement shall in any way limit the Fund's right to file at any time such
amendments to any registration statement and/or supplements to any prospectus or
statement of additional information, of whatever character, as the Fund may deem
advisable, such right being in all respects absolute and unconditional.
The Distributor acknowledges that the only information provided to it by the
Fund is that contained in the registration statement, the prospectus, the
statement of additional information and reports and financial information
referred to herein. Neither the Distributor nor any other person is authorized
by the Fund to give any information or to make any representations, other than
those contained in such documents and any sales
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literature or advertisements specifically approved by appropriate
representatives of the Fund.
16. Term - This Agreement shall become effective as of ___________________
and shall continue until two years from such date and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually (i) by the Fund's Board of Directors or
(ii) by a vote of a majority of the outstanding voting securities of the
relevant Portfolios of the Fund (as defined in the 1940 Act), provided that in
either event the continuance is also approved by the majority of the Directors
of the Fund who are not interested persons (as defined in the 0000 Xxx) of any
party to this Agreement. by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable with out
penalty on sixty days' notice by the Fund's Board of Directors, by vote of the
holders of a majority of the Fund's outstanding Shares or by the Distributor.
This Agreement shall automatically terminate in the event of its assignment (as
defined in the 1940 Act).
Upon the termination of this Agreement, the Distributor, at the Fund's expense
and direction, shall transfer to such successor as the Fund shall specify all
relevant books, records and other data established or maintained by the
Distributor under this Agreement.
17. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by (i) telex,, (ii) telecopier,
or (iii) registered or certified mail, postage prepaid, addressed by the party
giving notice to the other party at the last address furnished by the other
party to the party giving notice: if to the Fund at ________, with a copy to:
______; and if to the Distributor, at 000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx, 00000, Attn: Xxxxxxx X. Xxxx, or such other telex number or address as
may be furnished by one party to the other.
18. Confidential Information - The Distributor, its officers, directors,
employees and agents will treat confidentially and as proprietary information of
the Fund all records and other information relative to the Fund and to prior or
present shareholders or to those persons or entities who respond to the
Distributor's inquiries concerning investment in the Fund, and will not use such
records and information for any purposes other than performance of its
responsibilities and duties hereunder. If Distributor is requested or required
by, but not limited to, oral questions, interrogatories, requests for
information or documents, subpoena, civil investigation, demand or other action,
proceeding or process or as otherwise required by law, statute, regulation,
writ, decree or the like to disclose such information, Distributor will provide
the Fund with prompt written notice of any such request or requirement so that
the Fund may seek an appropriate protective order or other appropriate remedy
and/or waive compliance with this provision. If such order or other remedy is
not sought, or obtained, or waiver not received, Distributor may without
liability hereunder, disclose to the person, entity or agency requesting or
requiring the information, that portion of the information that is legally
required in the opinion of Distributor's counsel.
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19. Limitation of Liability - The Distributor is expressly put on notice of
the limitation of shareholder, officer and Director liability as set forth in
the Certificate of Incorporation of the Fund and agrees that the obligations
assumed by the Fund under this contract shall be limited in all cases to the
Fund and its assets. The Distributor agrees that it shall not seek satisfaction
of any such obligation from the shareholders or any individual shareholder of
the Fund. Nor shall the Distributor seek satisfaction of any such obligation
from the Directors, officers or any individual Director or officer of the Fund.
The Distributor understands that the rights and obligations of each series of
Shares of the Fund under the Fund's Certificate of Incorporation are separate
and distinct from those of any and all other series.
Any obligations of the Fund entered into in the name or on behalf thereof by any
of the Directors or officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Directors or officers, shareholders, or representatives of the Fund personally,
but bind only the Fund property, and all persons dealing with any class of
Shares of the Fund must look solely to the Fund property belonging to such class
for the enforcement of any claims against the Fund.
20. Miscellaneous - Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof. This Agreement shall be construed and enforced in accordance with and
governed by, and construed and interpreted in accordance with, the laws of the
State of ________________. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may not be changed, waived, discharged or amended except by written
instrument with shall make specific reference to this Agreement and which shall
be signed by the party against which enforcement of such change, waiver,
discharge or amendment is sought. This Agreement may be executed simultaneously
in two or more counterparts, each of which taken together shall constitute one
and the same instrument.
All activities by Distributor and its agents and employees as distributor of the
Shares shall comply with all applicable laws, rules and regulations including,
without limitation, all rules and regulations made or adopted by the SEC or any
securities association registered under the Exchange Act.
Distributor will promptly transmit any orders received by it for purchase,
redemption or exchange of the Shares to the Fund's transfer agent.
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IN WITNESS WHEREOF, the Fund has executed this instrument in its name and
behalf, and the Distributor has executed this instrument in its name and behalf,
as of the date and year first above written.
* ALPS MUTUAL FUND SERVICES, INC.
By: _______________________________ By: _______________________________
Xxxxxx Xxxxxx
Title: President Title: Chief Financial Officer
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