XXXX XXXXXXX INVESTMENT TRUST IV
(Freedom Investment Trust III until December 2, 1996)
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
November 13, 1996
Xxxx Xxxxxxx Funds, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Distribution Agreement
Dear Sir:
Xxxx Xxxxxxx Investment Trust IV (Freedom Investment Trust III until December 2,
1996) (the "Trust") has been organized as a business trust under the laws of the
Commonwealth of Massachusetts to engage in the business of an investment
company. The Trust's Board of Trustees has selected you to act as a principal
underwriter (as such term is defined in Section 2(a)(29) of the Investment
Company Act of 1940, as amended) of the shares of beneficial interest ("shares")
of each current series and any future series of the Trust and you are willing,
as agent for the Trust, to sell the shares to the public, to broker-dealers or
to both, in the manner and on the conditions hereinafter set forth. Accordingly,
the Trust hereby agrees with you as follows:
1. Delivery of Documents. The Trust will furnish you promptly with copies,
properly certified or otherwise authenticated, of any registration statements
filed by it with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, or the Investment Company Act of 1940, as amended, together
with any financial statements and exhibits included therein, and all amendments
or supplements thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Trust will from time to time
use its best efforts to register under the Securities Act of 1933, as amended,
such shares not already so registered as you may reasonably be expected to sell
as agent on behalf of the Trust. This Agreement relates to the issue and sale of
shares that are duly authorized and registered and available for sale by the
Trust if, but only if, the Trust sees fit to sell them. You and the Trust will
cooperate in taking such action as may be necessary from time to time to qualify
shares for sale in Massachusetts and in any other states mutually agreeable to
you and the Trust, and to maintain such qualification if and so long as such
shares are duly registered under the Securities Act of 1933, as amended.
3. Solicitation of Orders. You will use your best efforts (but only in states in
which you may lawfully do so) to obtain from investors unconditional orders for
shares authorized for issue by the Trust and registered under the Securities Act
of 1933, as amended, provided that you may in your discretion refuse to accept
orders for such shares from any particular applicant.
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4. Sale of Shares. Subject to the provisions of Sections 5 and 6 hereof and to
such minimum purchase requirements as may from time to time be currently
indicated in the Trust's prospectus, you are authorized to sell as agent on
behalf of the Trust authorized and issued shares registered under the Securities
Act of 1933, as amended. Such sales may be made by you on behalf of the Trust by
accepting unconditional orders to purchase such shares placed with your
investors. The sales price to the public of such shares shall be the public
offering price as defined in Section 6 hereof.
5. Sale of Shares to Investors by the Trust. Any right granted to you to accept
orders for shares or make sales on behalf of the Trust will not apply to shares
issued in connection with the merger or consolidation of any other investment
company with the Trust or its acquisition, by purchase or otherwise, of all or
substantially all the assets of any investment company or substantially all the
outstanding shares of any such company, and such right shall not apply to shares
that may be offered or otherwise issued by the Trust to shareholders by virtue
of their being shareholders of the Trust.
6. Public Offering Price. All shares sold by you as agent for the Trust will be
sold at the public offering price, which will be determined in the manner
provided in the Trust's prospectus or statement of additional information, as
now in effect or as it may be amended .
7. No Sales Discount. The Trust shall receive the applicable net asset value on
all sales of shares by you as agent of the Trust.
8. Delivery of Payments. You will deliver to the Transfer Agent all payments
made pursuant to orders accepted by you, and accompanied by proper applications
for the purchase of shares, no later than the first business day following the
receipt by you in your home office of such payments and applications.
9. Suspension of Sales. If and whenever a suspension of the right of redemption
or a postponement of the date of payment or redemption has been declared
pursuant to the Trust's Declaration of Trust and has become effective, then,
until such suspension or postponement is terminated, no further orders for
shares shall be accepted by you except such unconditional orders placed with you
before you have knowledge of the suspension. The Trust reserves the right to
suspend the sale of shares and your authority to accept orders for shares on
behalf of the Trust if, in the judgment of a majority of the Trust's Board of
Trustees, it is in the best interests of the Trust to do so, such suspension to
continue for such period as may be determined by such majority; and in that
event, no shares will be sold by the Trust or by you on behalf of the Trust
while such suspension remains in effect except for shares necessary to cover
unconditional orders accepted by you before you had knowledge of the suspension.
10. Expenses. The Trust will pay (or will enter into arrangements providing that
persons other than you will pay) all fees and expenses in connection with the
preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of shares and in connection with the qualification of shares for
sale in the various states in which the Trust shall determine it advisable to
qualify such shares for sale. It will also pay the issue taxes or (in the case
of shares redeemed) any initial transfer taxes thereon. You will pay all
expenses of printing prospectuses and other sales literature, all fees and
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expenses in connection with your qualification as a dealer in various states,
and all other expenses in connection with the sale and offering for sale of the
shares of the Trust which have not been herein specifically allocated to the
Trust.
11. Conformity with Law. You agree that in selling the shares you will duly
conform in all respects with the laws of the United States and any state in
which such shares may be offered for sale by you pursuant to this Agreement.
12. Indemnification. You agree to indemnify and hold harmless the Trust and each
of its Board members and officers and each person, if any, who controls the
Trust within the meaning of Section 15 of the Securities Act of 1933, as
amended, against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which the Trust or such Board members,
officers or controlling person may become subject under such Act, under any
other statute, at common law or otherwise, arising out of the acquisition of any
shares by any person which (a) may be based upon any wrongful act by you or any
of your employees or representatives or (b) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus or statement of additional information
covering shares of the Trust or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon information furnished or
confirmed in writing to the Trust by you, or (c) may be incurred or arise by
reason of your acting as the Trust's agent instead of purchasing and reselling
shares as principal in distributing shares to the public, provided that in no
case is your indemnity in favor of a Board member or officer of the Trust or any
other person deemed to protect such Board member or officer of the Trust or
other person against any liability to which any such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement.
You are not authorized to give any information or to make any
representations on behalf of the Trust or in connection with the sale of shares
other than the information and representations contained in a registration
statement, prospectus, or statement of additional information covering shares,
as such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time. No person other
than you is authorized to act as principal underwriter for the Trust.
13. Duration and Termination of this Agreement. This Agreement shall remain in
force until June 30, 1997, and from year to year thereafter, but only so long as
such continuance is specifically approved at least annually by (a) a majority of
the Board of Trustees who are not interested persons of you or of the Trust,
(other than as Board members), cast in person at a meeting called for the
purpose of voting on such approval, and (b) either (i) the Board of Trustees of
the Trust, or (ii) a majority of the outstanding voting securities of the Trust.
This Agreement may, on 60 days' written notice, be terminated at any time,
without the payment of any penalty, by the Board of Trustees of the Trust, by a
vote of a majority of the outstanding voting securities of the Trust, or by you.
This Agreement will automatically terminate in the event of its assignment by
you. In interpreting the provisions of this Section 13, the definitions
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contained in Section 2(a) of the Investment Company Act of 1940 (particularly
the definitions of "interested person", "assignment" and "voting security")
shall be applied.
14. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought. If the Trust should at any time deem 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 Commission or other governmental authority or to
obtain any advantage under state or federal tax laws and should notify you of
the form of such amendment, and the reasons therefor, and if you should decline
to assent to such amendment, the Trust may terminate this agreement forthwith.
If you should at any time request that a change be made in the Trust's
Declaration of Trust or By-Laws, or in its methods of doing business, in order
to comply with any requirements of federal law or regulations of the Securities
and Exchange Commission or of a national securities association of which you are
or may be a member, relating to the sale of shares, and the Trust should not
make such necessary change within a reasonable time, you may terminate this
Agreement forthwith.
15. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Very truly yours,
XXXX XXXXXXX INVESTMENT TRUST IV
(Freedom Investment Trust III until December 2, 1996)
By: /s/Xxxx X. Xxxxxxx
----------------------
President
The foregoing Agreement is hereby
accepted as of the date hereof.
XXXX XXXXXXX FUNDS, INC.
By: /s/Xxxxxx X. Xxxxxxxx, Xx.
--------------------------------
Chairman, President and CEO
