DISTRIBUTION AGREEMENT
EXHIBIT (e)
AGREEMENT dated as of December 12, 2005, between Utopia Funds (the “Fund”), an open-end,
management investment company organized as a Delaware statutory trust, Financial & Investment
Management Group, Ltd, a Michigan corporation (the “Adviser”) and ALPS Distributors, Inc., a
Colorado corporation and a registered broker-dealer under the Securities Exchange Act of 1934 (the
“Distributor”).
WHEREAS, the Fund is an open-end management investment company registered under the Investment
Company Act of 1940, as amended, presently consisting of the portfolios listed in Schedule A,
attached hereto;
WHEREAS, the Adviser serves as the investment adviser for each Trust and is duly registered
under the Investment Advisers Act of 1940, as amended, as an investment adviser;
WHEREAS, the Fund wishes to employ the services of the Distributor in connection with the
promotion and distribution of the shares 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 or will furnish, upon request, the Distributor with copies of
the Fund’s Declaration of Trust, advisory agreement, custodian agreement, transfer agency
agreement, administration agreement, current prospectus, and statement of additional information,
and all forms relating to any plan, program or service offered by the Fund. The Fund shall furnish,
within a reasonable time period, to the Distributor a copy of any amendment or supplement to any of
the above-mentioned documents. Upon request, 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 that are 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, as
amended (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 prospectus 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 the manner described in the
Fund’s current prospectus and/or statement of additional information. The Fund shall in all cases
receive the net asset value per Share on all sales. If a fee in connection with shareholder
redemptions is in effect, such fee will be paid to the Fund.
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 in its
sole and absolute discretion, 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/or the National Association of Securities Dealers, Inc. (the “NASD”) to
the extent required by the Securities Exchange Act of 1934, as amended (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 the 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 regulations.
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 prospectus and statement 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. Fund Expenses — Unless otherwise agreed to by the parties hereto in writing, the Distributor
shall not be responsible for fees 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) 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. Compensation — The Adviser, on behalf of the Fund, shall pay to the Distributor such
compensation for the Distributor’s services provided pursuant to this Agreement as may be agreed to
from time to time in a written fee schedule approved by the parties and initially set forth on
Schedule B (Fee Schedule) to this Agreement. The fees are accrued daily and billed monthly and
shall be due and payable within thirty (30) days of the Adviser’s receipt of the invoice. Upon the
termination of this Agreement before the end of any month, the fee for the part of the month before
such termination shall be prorated according to the proportion which such part bears to the full
monthly period and shall be payable within thirty (30) days of termination of this Agreement.
12. 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.
13. 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.
14. 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
relating to the Fund. 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.
15. 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 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 on 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 trustees 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 elects not
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 its
respective Trustees, officers and persons, if any, who control 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 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 conducted by counsel chosen by it
and satisfactory to the Fund, and to its respective 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.
16. 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 reasonably final 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 literature or advertisements specifically approved by
appropriate representatives of the Fund.
17. Term — This Agreement shall become effective as of December 12, 2005, and shall continue until
2 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
Trustees or (ii) by a vote of a majority of the outstanding voting securities of the relevant
Series of the Fund (as defined in the 1940 Act), provided that in either event the continuance is
also approved by the majority of the Trustees 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 without penalty on sixty
days’ written notice by the Fund’s Board of Trustees, by vote of the holders of a majority of the
outstanding voting securities of the relevant Series of the Fund 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.
18. Anti-Money Laundering – The Distributor agrees to maintain an anti-money laundering program in
compliance with Title III of the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”) and all applicable
laws and regulations promulgated thereunder. The Distributor confirms that, as soon as possible,
following the request from the Fund, the Distributor will supply the Fund with copies of the
Distributor’s anti-money laundering policy and procedures, and such other relevant certifications
and representations regarding such policy and procedures as the Fund may reasonably request from
time to time.
19. Notice — Any notice required or permitted to be given by either party to the other shall be
deemed sufficient if sent by (i) telecopier (fax) or (ii) 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:
000 Xxxx Xxxxxx
Xxxxxxxx Xxxx. Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Fax: 000.000.0000
Xxxxxxxx Xxxx. Xxxxxxxx 00000
Attn: Xxxxxxxx Xxxxxxxxx
Fax: 000.000.0000
With a copy to:
Xxxxx X. Xxxxxx
Vedder, Price, Xxxxxxx & Kammholz, P.C.
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: 000.000.0000
Xxxxx X. Xxxxxx
Vedder, Price, Xxxxxxx & Kammholz, P.C.
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: 000.000.0000
if to the Adviser at:
000 Xxxx Xxxxxx
Xxxxxxxx Xxxx. Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx
Fax: 000.000.0000
Xxxxxxxx Xxxx. Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx
Fax: 000.000.0000
if to the Distributor at:
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx, 00000
Attn: General Counsel
Xxxxxx, Xxxxxxxx, 00000
Attn: General Counsel
or such other telecopier (fax) number or address as may be furnished by one party to the other.
20. 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 the Distributor is requested or required by, but not limited to, depositions,
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, the 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 within a reasonable period
following such notice, then the 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 reasonable opinion of the Distributor’s counsel.
21. Limitation of Liability — The Distributor 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 Trustees, officers or any individual Trustee or officer of the Fund. The Distributor
understands that the rights and obligations of each Series of the Fund under the Fund’s Declaration
of Trust 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 Trustees or
officers, representatives or agents are made not individually, but in such capacities, and are not
binding upon any of the Trustees or officers, shareholders, or representatives of the Fund
personally, but bind only the Fund property, and all persons dealing with any Series of Shares of
the Fund must look solely to the Fund property belonging to such Series for the enforcement of any
claims against the Fund.
22. 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,
interpreted, and enforced in accordance with and governed by the laws of the State of Colorado. 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 that 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 the 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.
The Distributor will promptly transmit any orders received by it for purchase, redemption or
exchange of the Shares to the Fund’s transfer agent.
IN WITNESS WHEREOF, the Fund has executed this instrument in its name and behalf, the Distributor
has executed this instrument in its name and behalf, and the Adviser has executed this instrument
in its name and behalf, as of the date and year first above written.
| ALPS DISTRIBUTORS, INC. | ||
By: /s/ Xxxx X. Xxxxxxxxxx
|
By: /s/ Xxxxxx X. May | |
Name: Xxxx X. Xxxxxxxxxx
|
Name: Xxxxxx X. May | |
Title: President
|
Title: Managing Director |
FINANCIAL & INVESTMENT MANAGEMENT GROUP, LTD
By: /s/ Xxxxxxxx X. Xxxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Treasurer
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Treasurer
Schedule A
List of Portfolios
List of Portfolios
Utopia Growth Fund
Utopia Core Fund
Utopia Core Conservative Fund
Utopia Yield Income Fund
Utopia Core Fund
Utopia Core Conservative Fund
Utopia Yield Income Fund
Schedule B
Fees
Fees
Distribution
Agreement Fees are to be paid by the Fund’s Adviser. For
confidentiality reasons, the fees are not disclosed.
