DISTRIBUTION AGREEMENT
Distribution Agreement dated as of the 29th day of November, 1996 among
XXXXXX XXXXXXX INCORPORATED, a corporation organized under the laws of the
Commonwealth of Massachusetts ("Xxxxxx Xxxxxxx"), FREEDOM DISTRIBUTORS
CORPORATION, a corporation organized under the laws of the Commonwealth of
Massachusetts ("Freedom") and SUTRO & CO., INCORPORATED, a corporation organized
under the laws of the State of Nevada ("Sutro"), (sometimes herein referred to
collectively as "Distributor"), and FREEDOM GROUP OF TAX EXEMPT FUNDS, a
Massachusetts business trust having a place of business at Xxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx (sometimes herein referred to as "the Trust") which
proposes to offer shares of beneficial interest in different series representing
interests in different portfolios of assets (each series being referred to
herein as a "Fund"). Wherever the term "Distributor" appears in this
Distribution Agreement, it shall refer to Xxxxxx Xxxxxxx, Freedom and Sutro with
respect to the Freedom Group of Tax Exempt Funds generally and Freedom and Sutro
with respect to the Freedom California Tax Exempt Money Fund.
WITNESSETH:
In consideration of the agreements herein contained and for other good
and valuable consideration, receipt and sufficiency of which is hereby
acknowledged by the parties, it is agreed:
1. Appointment of Distributor.
(a) The Trust hereby appoints the Distributor as its exclusive agent to
sell and distribute shares of each Fund of the Trust then in existence at the
offering price thereof as from time to time determined in the manner herein
provided. The Distributor hereby accepts such appointment and agrees during the
term of this Distribution Agreement to provide the services and to assume the
obligations herein set forth without compensation.
(b) The Trust hereby appoints Freedom Distributors Corporation and
Sutro & Co., Inc. as its exclusive agents with respect to shares of Freedom
California Tax Exempt Money Fund to sell and distribute such shares of the
Freedom California Tax Exempt Money Fund at the offering price thereof as
determined in the manner herein provided. Freedom Distributors Corporation and
Sutro & Co., Inc. hereby accept such appointment.
2. Basis of Sale of Shares. Distributor does not agree to sell any
specific number of shares. Shares will be sold by Distributor as agent for the
Trust only against orders therefor. Distributor will not purchase shares from
anyone other than the Trust except as agent for the Trust, and Distributor will
not take "short" positions in shares of the Trust.
3. Offering Price. The offering price for shares of any Fund of the
Trust shall be the "net asset value per share" for that Fund determined in
accordance with the Agreement and Declaration of Trust of the Trust. The net
asset value per share for each Fund shall be determined at such time and on such
days as are established by the Board of Trustees of the Trust from time to time.
4. Manner of Offering. Distributor will conform to the securities laws
of any jurisdiction in which it sells, directly or indirectly, any shares.
Distributor also agrees to furnish to the Trust sufficient copies of any
agreements, plans or sales literature it intends to use in connection with any
sales of shares in adequate time for the Trust to file and clear them with the
proper authorities before they are put in use, and not to use them until so
filed and cleared.
5. Allocation of Expenses.
(a) The Trust, either directly or through its investment adviser, will
be responsible for, and shall pay the expenses of:
(i) providing all necessary services, including fees and
disbursements of counsel, related to the preparation, setting in type, printing
and filing of any registration statement and/or prospectus required under the
Securities Act of 1933, as amended, or under state securities laws, covering its
shares, and all amendments and supplements thereto, the mailing of any such
prospectus to existing shareholders, and preparing, setting in type, printing
and mailing periodic reports to existing shareholders;
(ii) the cost of all registration or qualification fees;
(iii) the cost of preparing temporary and permanent share
certificates for shares of the Trust;
(iv) all the federal and state (if any) issue and/or transfer
taxes payable upon the issue by or (in the case of treasury shares) transfer
from the Trust to the Distributor of any and all shares distributed hereunder.
(b) The Distributor agrees that, after the prospectus and periodic
reports have been set in type, it will bear the expense of printing and
distributing any copies thereof which are to be used in connection with the
offering of shares to investors. The Distributor further agrees that it will
bear the expenses of preparing, printing and distributing any other literature
used by the Distributor or furnished by it for use in connection with the
offering of the shares for sale to the public, and any expenses of advertising
in connection with such offering. The Distributor will also pay fees for
services rendered by the transfer agent on behalf of the Distributor.
(c) The Trust will be responsible for, and shall pay the
expenses of, maintaining shareholder accounts and furnishing or causing to be
furnished to each shareholder a statement of his account. Where shares of the
Trust are carried for the account of a customer by the Distributor in a broker
controlled account together with other assets of the customer, the Trust will be
responsible for and shall pay the Distributor or its affiliate the amount of
$10.50 per shareholder account for the Distributor's services in maintaining
shareholder accounts and furnishing statements of account with respect to such
broker controlled accounts. The $10.50 payment shall be in lieu of all other
payments to the Distributor, including any and all out of pocket expenses
incurred by the Distributor on behalf of the Trust."
6. Distributor Is Independent Contractor. Distributor shall be an
independent contractor. Distributor is responsible for its own conduct, for the
employment, control and conduct of its agents and employees and for injury to
such agents or employees or to others through its agents or employees.
Distributor assumes full responsibility for its agents and employ ees under
applicable statutes and agrees to pay all employer taxes thereunder.
7. Term of Contract. This Distribution Agreement shall go into effect
on the date hereof and shall continue in effect thereafter for successive
periods of one year each if such continuance is approved at least annually
thereafter (i) either by an affirmative vote of a majority of the outstanding
shares of the Trust or by the Board of Trustees of the Trust, and (ii) in either
case by a majority of the Trustees of the Trust who are not interested persons
of the Distributor or (otherwise than as Trustees) of the Trust, cast in person
at a meeting called for the purpose of voting on such approval. Written notice
of discontinuance of this Distribution Agreement may be given by one party
hereto to the other not less than sixty (60) days before expiration of its
initial term or before the expiration of any succeeding annual period.
8. Assignment. This Distribution Agreement may not be assigned by the
Distributor and shall automatically terminate in the event of an attempted
assignment by the Distributor; provided, however, that the Distributor may
employ such other person, persons, corporation, or corporations, as it shall
determine in order to assist it in carrying out this Distribution Agreement.
9. Indemnification by Distributor. Distributor agrees to indemnify and
hold harmless the Trust or any other person who has been, is, or may hereafter
be an officer, director or employee of the Trust against any loss, damage or
expense reasonably incurred by any of them in connection with any claim or in
connection with any action, suit, or proceeding to which any of them may be a
party, which arises out of or is alleged to arise out of or is based upon any
untrue statement or alleged untrue statement of a material fact, or the omission
or alleged omission to state a material fact necessary to make the statements
made not misleading, on the part of Distributor or any agent or employee of
Distributor or any other person for whose acts Distributor is responsible or is
alleged to be responsible, unless such statement or omission was made in
reliance upon written information furnished by the Trust. The term "expenses"
for purposes of this and the next paragraph includes amounts paid in
satisfaction of judgments or in settlements which are made with Distributor's
consent. The foregoing rights of indemnification shall be in addition to any
other rights to which the Trust or a Trustee may be entitled as a matter of law.
10. Indemnification by Trust. The Trust agrees to indemnify and hold
harmless the Distributor and each person who has been, is, or may hereafter be
an officer, director, employee or agent of the Distributor against any loss,
damage or expense reasonably incurred by any of them in connection with any
claim or in connection with any action, suit or proceeding to which any of them
may be a party, which arises out of or is alleged to arise out of or is based
upon any untrue or alleged untrue statement of material fact, or the omission or
alleged omission to state a material fact necessary to make the statements
therein not misleading, contained in a registration statement or prospectus, or
any amendment or supplement thereto, unless such statement or omission was made
in reliance upon written information furnished by the Distributor. The foregoing
rights of indemnification shall be in addition to any other rights to which the
Distributor
may be entitled as a matter of law. Nothing contained herein shall relieve
Distributor of any lia bility to the Trust or its shareholders to which
Distributor would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of its duties or reckless
disregard of its obligations and duties hereunder.
11. Non-exclusive Agreement. The services of the Distributor to the
Trust hereunder shall not be deemed to be exclusive, and the Distributor shall
be free to (a) render similar services to, and act as underwriter or distributor
in connection with the distribution of shares of, other investment companies,
and (b) engage in any other businesses and activities from time to time.
12. Amendment. This Distribution Agreement may be amended at any time
by mutual agreement in writing of the parties hereto, provided that any such
amendment is approved by a majority of the Trustees of the Trust who are not
interested persons of the Distributor or by the holders of a majority of the
outstanding shares of the Trust.
13. Governing Law. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts.
14. Limitation of Liability. The Agreement and Declaration of Trust
establishing the Trust, dated June 1, 1982, as restated on September 27, 1982,
and as further amended (the "Declaration"), a copy of which is on file in the
Office of the Secretary of the Commonwealth of Massachusetts, provides that the
name "Freedom Group of Tax Exempt Funds" refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of the Trust shall be held
to any personal liability, nor shall resort be had to their private property for
the satisfaction of any obligation or claim otherwise in connection with the
affairs of said Trust but the Trust Estate only shall be liable.
15. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
IN WITNESS WHEREOF, this Distribution Agreement has been executed for
the Distributors and the Trust by their duly authorized officers, as of the date
first set forth above.
FREEDOM DISTRIBUTORS XXXXXX XXXXXXX INCORPORATED
CORPORATION
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxx X. XxXxxxxx
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President Managing Director
ATTEST: /s/ Xxxxxxx X. Xxxxx ATTEST: /s/ Xxxxxxx X. Xxxxx
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SUTRO & CO., INCORPORATED FREEDOM GROUP OF TAX EXEMPT
FUNDS
By: /s/ By: /s/ Xxxxxxx Xxxx
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Executive Vice President Treasurer
ATTEST: /s/ X.X. Xxxxxxx ATTEST: /s/ Xxxxxxx X. Xxxxx
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