AMENDED AND RESTATED DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 16th day of October,
1989 by and between XXXXXXXXX TAX-FREE TRUST (hereinafter called
the "Business Trust"), and AQUILA DISTRIBUTORS, INC. (hereinafter
called the "Distributor").
W I T N E S S E T H :
WHEREAS, the Fund and the Distributor have
previously entered into a Distribution Agreement with respect to
a portfolio of the Business Trust entitled Xxxxxxxxx Tax-Free
Fund of Kentucky (the "Fund"); and
WHEREAS, the Business Trust and the Distributor
now wish to amend and restate their agreement as herein set
forth, (referred to hereafter as "this Agreement");
NOW, THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable
consideration, the receipt of which is hereby acknowledged, it is
agreed by and between the parties hereto as follows:
1. The Distributor agrees to act as principal
underwriter and exclusive distributor of the shares of the Fund.
The price at which shares of the Fund are issued to the public by
the Distributor shall be as computed and effective as set forth
in the Prospectus and Statement of Additional Information of the
Fund current as of the time of such sale (collectively, the
"Current Prospectus"). The Distributor is authorized to
determine from time to time (i) the sales charges forming part of
the public offering price and any dealer discount paid to dealers
and any agency commissions paid to brokers; (ii) the terms of any
privilege reducing or eliminating such sales charges; and (iii)
the terms of any sales agreement entered into by the Distributor
relating to the sale of the Fund's shares and the identity of any
broker or dealer with which such agreements are entered into.
The Business Trust agrees that it will promptly amend or
supplement the Current Prospectus in connection with any change
in any of the foregoing. The Distributor agrees to bear the
costs of printing and distributing all copies of the Fund's
prospectuses, statements of additional information and reports to
shareholders which are not sent to the Fund's shareholders, as
well as the costs of supplemental sales literature, advertising
and other promotional activities.
2. The Business Trust agrees to issue shares of
the Fund, subject to the provisions of its Declaration of Trust
and By-Laws, to the Distributor as ordered by the Distributor,
but only to the extent that the Distributor shall have received
purchase orders therefor at the times and subject to the
conditions set forth in the Current Prospectus. Certificates for
shares need not be created or delivered by the Business Trust in
any case in which the purchase is made under terms not calling
for such certificates. Shares issued by the Business Trust shall
be registered in such name or names and amounts as the
Distributor may request from time to time and all shares when so
paid for and issued shall be fully paid and non-assessable to the
extent set forth in the Current Prospectus.
3. The Distributor shall act as principal in all
matters relating to promotion of the growth of the Fund and shall
enter into all of its engagements, agreements and contracts as
principal on its own account. The title to shares of the Fund
issued and sold through the Distributor shall pass directly from
the Business Trust to the dealer or investor, or shall, if the
Distributor so consents, first pass to the Distributor, as may
from time to time be determined by the Board of Trustees of the
Business Trust.
4. The Business Trust hereby consents to any
arrangements whereby the Distributor may act as principal
underwriter for other investment companies or as principal
underwriter, sponsor or depositor for unit investment trusts and
periodic payment plan certificates issued thereby, or as
investment adviser, sub-adviser or administrator to the Business
Trust or other investment companies or persons. The Business
Trust also consents to the Distributor carrying on a business as
a broker, dealer and underwriter in securities and to carrying on
any other lawful business.
5. The Business Trust covenants and agrees that
it will not during the term of this Agreement, without the
consent of the Distributor, offer any shares of the Fund for sale
directly or through any person or corporation other than the
Distributor excepting only (a) the reinvestment of dividends
and/or distributions, or their declaration in shares of the Fund,
in optional form or otherwise; (b) the issuance of additional
shares through stock splits or stock dividends; (c) sales of
shares to another investment or securities holding company in the
process of purchasing all or a portion of its assets; or (d) in
connection with an exchange of the Fund's shares for shares of
another investment company or securities holding company.
6. The Business Trust agrees to use its best
efforts to register from time to time under the Securities Act of
1933 adequate amounts of shares of the Fund for sale by the
Distributor to the public and to register or qualify, or to
permit the Distributor to register or qualify, such shares for
offering to the public in such States or other jurisdictions as
may be designated by the Distributor.
7. The Business Trust agrees to advise the
Distributor of the net asset value of the Fund's shares as often
as computed. The Business Trust will also furnish to the
Distributor, as soon as practicable, such information as may
reasonably be requested by the Distributor in order that it may
know all of the facts necessary to sell shares of the Fund.
8. The Distributor is familiar with the
Declaration of Trust and By-Laws of the Business Trust, each as
presently in effect. Insofar as they are applicable to the
Distributor as principal underwriter of the Business Trust, it
will comply with the provisions of the Declaration of Trust and
By-Laws of the Business Trust and with the provisions of all acts
administered by the Securities and Exchange Commission (the
"Commission") and rules thereunder.
9. This amended and restated Agreement shall go
into effect on the date first above written, and shall, unless
terminated as hereinafter provided, continue in effect until the
June 30 which next precedes the second anniversary of the
effective date of this Agreement, and from year to year
thereafter, but only so long as such continuance is specifically
approved at least annually as provided in the Investment Company
Act of 1940 (the "Act"). This Agreement shall automatically
terminate in the event of its assignment (as defined in the Act)
and may be terminated by either party on sixty days written
notice to the other party.
10. The Business Trust agrees with the
Distributor, for the benefit of the Distributor and each person,
if any, who controls the Distributor within the meaning of
Section 15 of the Securities Act of 1933 (the "Securities Act")
and each and all and any of them, to indemnify and hold harmless
the Distributor and any such controlling person from and against
any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under
the Securities Act, under any other statute, at common law or
otherwise, and to reimburse the Distributor and such controlling
persons, if any, for any legal or other expenses (including the
cost of any investigation and preparation) reasonably incurred by
them or any of them in connection with any litigation whether or
not resulting in any liability, insofar as such losses, claims,
damages, liabilities or litigation arise out of, or are based
upon, any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or any
Prospectus, filed with the Commission, or any amendment thereof
or supplement thereto, or which arise out of, or are based upon
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; provided, however, that this indemnity
agreement shall not apply to amounts paid in settlement of any
such litigation if such settlement is effected without the
consent of the Business Trust or to any such losses, claims,
damages, liabilities or litigation arising out of, or based upon,
any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement or Prospectus,
or any amendment thereof or supplement thereto, or arising out
of, or based upon, 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, which
statement or omission was made in reliance upon information
furnished in writing to the Business Trust by the Distributor for
inclusion in any such Registration Statement or Prospectus or any
amendment thereof or supplement thereto. The Distributor and
each such controlling person shall, promptly after the complaint
shall have been served upon the Distributor or such controlling
person in respect of which indemnity may be sought from the
Business Trust on account of its agreement contained in this
paragraph, notify the Business Trust in writing of the
commencement thereof. The omission of the Distributor or such
controlling person so to notify the Business Trust of any such
litigation shall relieve the Business Trust from any liability
which it may have to the Distributor or such controlling person
on account of the indemnity agreement contained in this
paragraph, but shall not relieve the Business Trust from any
liability which it may have to the Distributor or controlling
person otherwise than on account of the indemnity agreement
contained in the paragraph. In case any such litigation shall be
brought against the Distributor or any such controlling person
and notice of the commencement thereof shall have been given to
the Business Trust, the Business Trust shall be entitled to
participate in (and, to the extent that it shall wish, to direct)
the defense thereof at its own expense, but such defense shall be
conducted by counsel of good standing and satisfactory to the
Distributor or such controlling person or persons, defendant or
defendants in the litigation. The indemnity agreement of the
Business Trust contained in this paragraph shall remain operative
and in full force and effect regardless of any investigation made
by or on behalf of the Distributor or any such controlling
person, and shall survive any delivery of shares of the Fund.
The Business Trust agrees to notify the Distributor promptly of
the commencement of any litigation or proceeding against it or
any of its officers or directors of which it may be advised in
connection with the issue and sale of shares of the Fund.
11. Anything herein to the contrary
notwithstanding, the agreement in paragraph 10, insofar as it
constitutes a basis for reimbursement by the Business Trust for
liabilities (other than payment by the Business Trust of expenses
incurred or paid in the successful defense of any action, suit or
proceeding) arising under the Securities Act, shall not extend to
the extent of any interest therein of any person who is an
underwriter or a partner or controlling person of an underwriter
within the meaning of Section 15 of the Securities Act or who, at
the date of this Agreement, is a Trustee of the Business Trust,
except to the extent that an interest of such character shall
have been determined by a court of appropriate jurisdiction as
not against public policy as expressed in the Securities Act.
Unless in the opinion of counsel for the Business Trust the
matter has been adjudicated by controlling precedent, the
Business Trust, will, if a claim for such reimbursement is
asserted, submit to a court of appropriate jurisdiction the
question of whether or not such interest is against the public
policy as expressed in the Securities Act.
12. The Distributor agrees to indemnify and hold
harmless the Business Trust and its Trustees and such officers as
shall have signed any Registration Statement filed with the
Commission from and against any and all losses, claims, damages
or liabilities, joint or several, to which the Business Trust or
such Trustees or officers may become subject under the Securities
Act, under any other statute, at common law or otherwise, and
will reimburse the Business Trust or such Trustees or officers
for any legal or other expenses (including the cost of any
investigation and preparation) reasonably incurred by it or them
or any of them in connection with any litigation, whether or not
resulting in any liability, insofar as such losses, claims,
damages, liabilities or litigation arise out of, or are based
upon, any untrue statement or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, which statement or
omission was made in reliance upon information furnished in
writing to the Business Trust by the Distributor for inclusion in
any Registration Statement or any Prospectus, or any amendment
thereof or supplement thereto. The Distributor shall not be
liable for amounts paid in settlement of any such litigation if
such settlement was effected without its consent. The Business
Trust and its Trustees and such officers, defendant or
defendants, in any such litigation shall, promptly after the
complaint shall have been served upon the Business Trust or any
such Trustee or officer in respect of which indemnity may be
sought from the Distributor on account of its agreement contained
in this paragraph, notify the Distributor in writing of the
commencement thereof. The omission of the Business Trust or such
Trustee or officer so to notify the Distributor of any such
litigation shall relieve the Distributor from any liability which
it may have to the Business Trust or such Trustee or officer on
account of the indemnity agreement contained in this paragraph,
but shall not relieve the Distributor from any liability which it
may have to the Business Trust or such Trustee or officer
otherwise than on account of the indemnity agreement contained in
this paragraph. In case any such litigation shall be brought
against the Business Trust or any such Trustee or officer and
notice of the commencement thereof shall have been so given to
the Distributor, the Distributor shall be entitled to participate
in (and, to the extent that it shall wish, to direct) the defense
thereof at its own expense, but such defense shall be conducted
by counsel of good standing and satisfactory to the Business
Trust. The indemnity agreement of the Distributor contained in
this paragraph shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of
the Business Trust and shall survive any delivery of shares of
the Fund. The Distributor agrees to notify the Business Trust
promptly of the commencement of any litigation or proceeding
against it or any of its officers or directors or against any
such controlling person of which it may be advised, in connection
with the issue and sale of the Fund's shares.
13. Notwithstanding any provision contained in
this Agreement, no party hereto and no person or persons in
control of any party hereto shall be protected against any
liability to the Business Trust or its security holders to which
they would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence, in the performance of their
duties, or by reason of their reckless disregard of their
obligations and duties under this Agreement.
14. The Business Trust shall immediately advise
the Distributor (a) when any post-effective amendment to its
Registration Statement or any further amendment or supplement
thereto or any further Registration Statement or amendment or
supplement thereto becomes effective, (b) of any request by the
Commission for amendments to the Registration Statement or the
then effective Prospectus or for additional information, (c) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement, or the initiation of
any proceedings for that purpose, and (d) of the happening of any
event which makes untrue any material statement made in the
Registration Statement or the Current Prospectus or which in the
opinion of counsel for the Business Trust requires the making of
a change in the Registration Statement or the Current Prospectus
in order to make the statements therein not misleading. In case
of the happening at any time of any event which materially
affects the Fund or its securities and which should be set forth
in a supplement to or an amendment of the then effective
Prospectus in order to make the statements therein not misleading
the Business Trust shall prepare and furnish to the Distributor
such amendment or amendments to the then effective Prospectus as
will correct the Prospectus so that as corrected it will not
contain, or such supplement or supplements to the then effective
Prospectus which when read in conjunction with the then effective
Prospectus will make the combined information not contain, any
untrue statement of a material fact or any omission to state any
material fact necessary in order to make the statements in the
then effective Prospectus not misleading. The Business Trust
shall, if at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, make
every reasonable effort to obtain the prompt lifting of such
order.
15. Except as expressly provided in paragraphs 10
and 12 hereof, the agreements herein set forth have been made and
are made solely for the benefit of the Business Trust, the
Distributor, and the persons expressly provided for in paragraphs
10 and 12, their respective heirs, successors, personal
representatives and assigns, and except as so provided, nothing
expressed or mentioned herein is intended or shall be construed
to give any person, firm or corporation, other than the Business
Trust, the Distributor, and the persons expressly provided for in
paragraphs 10 and 12, any legal or equitable right, remedy or
claim under or in respect of this Agreement or any
representation, warranty or agreement herein contained. Except
as so provided, the term "heirs, successors, personal
representatives and assigns" shall not include any purchaser of
shares merely because of such purchase.
16. The Distributor understands that the
obligations of this Agreement are not binding upon any
shareholder of the Fund personally, but bind only the Business
Trust's property; the Distributor represents that it has notice
of the provisions of the Business Trust's Declaration of Trust
disclaiming shareholder liability for acts or obligations of the
Business Trust.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective duly authorized
officers and their seals to be affixed as of the day and year
first above written.
Xxxxxxxxx Tax-Free Trust
By:________________________________
ATTEST:
__________________________
Aquila Distributors, Inc.
By:________________________________
ATTEST:
__________________________
