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Exhibit (e)
DISTRIBUTOR'S CONTRACT
Distributor's Contract dated September 19, 1990, by and between THE
EMPIRE BUILDER TAX FREE BOND FUND, a Massachusetts business trust (the "Fund")
and Glickenhaus & Co., a partnership organized under the laws of the State of
New York (the "Distributor").
WHEREAS, the Fund and the Distributor desire to enter into an agreement
providing for the distribution by the Distributor of shares of the Fund;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Terms and Conditions of Distributor's Contract attached to and forming a
part of this Contract (the "Terms and Conditions"), the Fund hereby appoints the
Distributor as a distributor of shares of the Fund, and the Distributor hereby
accepts such appointment, all as set forth in the Terms and Conditions.
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of the Commonwealth of Massachusetts and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Fund as
Trustees and not individually, and that the obligations of or arising out of
this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.
IN WITNESS WHEREOF, THE EMPIRE BUILDER TAX FREE BOND FUND and GLICKENHAUS
& CO., has each caused this Distributor's Contract to be signed in duplicate in
its behalf, all as of the day and year first above written.
THE EMPIRE BUILDER TAX FREE BOND FUND
By: /s/ J. Xxxxx Xxxxxxx
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J. Xxxxx Xxxxxxx
Treasurer
GLICKENHAUS & CO.
By: /s/ Xxxx X. Xxxxxxxxxxx
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Xxxx X. Xxxxxxxxxxx
General Partner
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TERMS AND CONDITIONS
OF
DISTRIBUTOR'S CONTRACT
1. RESERVATION OF RIGHT NOT TO SELL. The Fund reserves the right to refuse at
any time or times to sell any of its shares of beneficial interest ("shares")
hereunder for any reason deemed adequate by it.
2. SALE OF SHARES TO THE DISTRIBUTOR AND SALES BY THE DISTRIBUTOR.
The Distributor will have the right, as principal, to sell shares to
investment dealers against orders therefor at the public offering price less a
discount determined by the Distributor, which discount shall not exceed the
amount of the sales charge referred to below.
The Distributor will also have the right, as principal, to purchase shares
from the Fund at their net asset value and to sell such shares to the public
against orders therefor at the public offering price. Upon receipt of an order
to purchase Fund shares from a broker or dealer with whom the Distributor has a
Sales Contract, the Distributor will promptly purchase shares from the Fund to
fill such order. Upon receipt of registration instruments in proper form and
payment for such shares, the Distributor will transmit such instructions to the
Fund or its agent for registration of the shares purchases.
The Distributor will also have the right, as agent for the Fund, to sell
shares at the public offering price to such persons and upon such conditions as
the Trustees of the Fund may from time to time determine.
The Distributor will also have the right, as principal, to sell shares at
their net asset value to such persons as may be approved by the Trustees of the
Fund, all such sales to comply with the provisions of the Investment Company Act
of 1940 and the Rules and Regulations of the Securities and Exchange Commission
promulgated thereunder.
The public offering price shall be the net asset value of shares then in
effect, plus an applicable sales charge determined in the manner set forth in
the then current Prospectus of the Fund or as permitted by the Investment
Company Act of 1940 and the Rules and Regulations of the Securities and Exchange
Commission promulgated thereunder. In no event shall the public offering price
exceed 100/91.50 of such net asset value, and in no event shall any applicable
sales charge exceed 8.50% of the public offering price. The net asset value of
shares shall be determined in the manner provided in the Agreement and
Declaration of Trust of the Fund as then amended and when determined shall be
applicable to transactions as provided for in the then current Prospectus.
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On every sale the Fund shall receive the applicable net asset value of the
shares. The Distributor shall have the right to retain the sales charge less any
applicable dealer discount. The Distributor will reimburse the Fund for any
increased issue tax paid on account of the sales charge.
3. SALES OF SHARES BY THE FUND. The Fund reserves the right to issue shares
at any time directly to its shareholders as a stock dividend or stock split and
to sell shares to its shareholders or to other persons approved by the
Distributor at not less than net asset value.
4. REPURCHASE OF SHARES. The Distributor will act as agent for the Fund in
connection with the repurchase of shares by the Fund upon the terms and
conditions set forth in the then current Prospectus of the Fund.
5. BASIS OF PURCHASES AND SALES OF SHARES. The Distributor will use its
best efforts to place shares sold by it on an investment basis. The Distributor
does not agree to sell any specific number of shares. Shares will be sold by the
Distributor only against orders therefor. The Distributor will not purchase
shares from anyone other than the Fund except in accordance with Section 4, and
will not take "long" or "short" positions in shares contrary to the Agreement
and Declaration of the Trust of the Fund.
6. RULES OF NASD, etc. The Distributor will conform to the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. and the sale of
securities laws of any jurisdiction in which it sells, directly or indirectly,
any shares. The Distributor also agrees to furnish to the Fund sufficient copies
of any agreements or plans it intends to use in connection with any sales of
shares in adequate time for the Fund 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.
7. INDEPENDENT CONTRACTOR. The Distributor shall be an independent
contractor and neither the Distributor nor any of its officers or employees as
such is or shall be an employee of the Fund. The Distributor is responsible for
its own conduct and 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. The Distributor assumes full responsibility for its agents
and employees under applicable statutes and agrees to pay all employer taxes
thereunder.
The Distributor will maintain at its own expense insurance against public
liability in such an amount as the Trustees of the Fund may from time to time
reasonably request.
8. EXPENSES. The Fund will pay or reimburse the Distributor for all
expenses of qualifying shares of the Fund for sale under the so-called "Blue
Sky" laws of any state. The Distributor will pay all expenses of preparing,
printing and distributing advertising and sales literature (apart from expenses
of registering shares under the Federal Securities Act of 1933 and Investment
Company Act of 1940 and the preparation and printing of Prospectuses and reports
as required by said Acts and the direct expenses of the issue of shares, except
that the Distributor will pay
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the cost of the preparation and printing of Prospectuses and shareholders'
reports used by it and by others in the sale of Fund shares to the extent such
cost is not paid by others).
9. INDEMNIFICATION OF FUND. The Distributor agrees to indemnify and hold
harmless the Fund and each person who has been, is or may hereafter be a Trustee
of the Fund against expenses 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 any
misrepresentation or omission to state a material fact, or out of any alleged
misrepresentation or omission to state a material fact, on the part of the
Distributor or any agent or employee of the Distributor or any other person for
whose acts the Distributor is responsible or is alleged to be responsible,
unless such misrepresentation or omission was made in reliance upon written
information furnished by the Fund. The Distributor also agrees likewise to
indemnify and hold harmless the Fund and each such person in connection with any
claim or in connection with any action, suit or proceeding which arises out of
or is alleged to arise out of the diligence with respect to its services
rendered in connection with investment, reinvestment, automatic withdrawal and
other plans for shares. The term "expenses" includes amounts paid in
satisfaction of judgments or in settlements which are made with the
Distributor's consent. The foregoing rights of indemnification shall be in
addition to any other rights to which the Fund or a Trustee may be entitled as a
matter of law.
10. INDEMNIFICATION OF THE DISTRIBUTOR. The Fund agrees to indemnify,
defend and hold the Distributor, its several officers, employees and directors,
and any person who controls the Distributor within the meaning of Section 15 of
the Securities Act of 1933, free and harmless from and against any and all
claims, demands, liabilities and any counsel fees incurred in connection
therewith which the Distributor, its officers, employees or directors, or any
such controlling person, may incur, under the Securities Act of 1933 or under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement or
Prospectus or material fact required to be stated in either thereof not
misleading, provided that in no event shall anything contained in this Agreement
be construed so as to protect the Distributor against any liability to the Fund
or its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of its reckless disregard of its obligations and
duties, or by reason of its reckless disregard of its obligations and duties
under this Agreement.
11. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENT OF THIS CONTRACT. This
Contract shall automatically terminate, without the payment of any penalty, in
the event of its assignment. This Contract may be amended only if such amendment
be approved either by action of the Trustees of the Fund or at a meeting of the
shareholders of the Fund by the affirmative vote of a majority of the Trustees
of the Fund who are not interested persons of the Fund or of the Distributor by
vote cast in person at a meeting called for the purpose of voting on such
approval.
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12. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT. This Contract shall
take effect upon the date first above written and shall remain in full force and
effect continuously (unless terminated automatically as set forth in Section 11)
until terminated:
(1) Either by the Fund or the Distributor by not more than sixty (60)
days' nor less than ten (10) days' written notice delivered or
mailed by registered mail, postage prepaid, to the other party; or
(2) If the continuance of this Contract after two years after the date
of its execution is not specifically approved at least annually by
the Trustees of the Fund or the shareholders of the Fund by the
affirmative vote of a majority of the Trustees of the Fund who are
not interested persons of the Fund or of the Distributor by vote
cast in person at a meeting called for the purpose of voting on such
approval.
Action by the Fund under (a) above may be taken either (i) by vote of its
Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund. The requirement under (b) above that continuance of this
Contract be "specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act of 1940 and the Rules and
Regulations thereunder.
Termination of this Contract pursuant to this Section 12 shall be without
the payment of any penalty.
13. CERTAIN DEFINITIONS. For the purposes of this Contract, the "affirmative
vote of a majority of the outstanding shares of the Fund" means the affirmative
vote, at a duly called and held meeting of shareholders of the Fund, (a) of the
holders of 67% or more of the shares of the Fund present (in person or by proxy)
and entitled to vote at such meeting, if the holders of more than 50% of the
outstanding shares of the Fund entitled to vote at such meeting are present in
person or by proxy, or (b) of the holders of more than 50% of the outstanding
shares of the Fund entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "interested persons" and
"assignment" shall have the meanings defined in the Investment Company Act of
1940, subject, however, to such exemptions as may be granted by the Securities
and Exchange Commission under said Act.
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