Exhibit 99.7(A)
FORM OF BROKER/DEALER AGREEMENT
Sierra Investment Services Corporation
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
We desire to enter into an Agreement with you for the sale of units of
beneficial interest of the Sierra Prime Income Fund that are now or hereafter
available for sale to our customer. You are the principal underwriter (as such
term is defined in the Investment Company Act of 1940, as amended) of the
offering of shares of the Trust and the agent for the continuous distribution of
such shares. As used herein the term "Prospectus" means the prospectuses and,
unless the context otherwise requires, related statement of additional
information (the "Statement of Additional Information") incorporated therein by
reference, as the same are amended and supplemented from time to time for the
Trust.
In consideration for the mutual covenants contained herein, it is hereby
agreed that our respective rights and obligations shall be as follows:
1. Customers of ours who purchase Fund shares are for all purposes our
customers and not customers of the Trust. We shall be responsible
for opening, approving and monitoring customer accounts and for the
review and supervision of these accounts, all in accordance with the
rules of the Securities and Exchange Commission ("SEC") and National
Association of Securities Dealers, Inc. (the "NASD"). In no
transaction involving shares shall we have any authority to act as
agent for the Trust or for you.
2. All orders for the purchase of any Trust share shall be executed at
the then current public offering price per share (i.e., the net
asset value per share plus the applicable sales load, if any) and
all orders for the redemption of any Trust shares shall be executed
at the net asset value per share, in each case as described in the
Prospectus. The minimum initial purchase order shall be as set forth
in the Prospectus. The Trust reserves the right to reject any
purchase order. Unless otherwise mutually agreed in writing, each
transaction shall be promptly confirmed in writing to the customer
on a fully disclosed basis and a copy of each confirmation shall be
sent simultaneously to us. We agree that upon receipt of duplicate
confirmations we will examine the same and promptly notify the Trust
of any errors or discrepancies which we discover and shall promptly
bring to the attention of the Trust any errors in such confirmations
claimed by our customers. The Trust reserves the right at its
discretion and without notice, to suspend the sale of shares or
withdraw entirely the sale of shares.
3. In ordering shares of the Trust, we shall rely solely and
conclusively on the representations contained in the Prospectus. We
agree that we shall not offer or sell shares of the Trust or of any
series of the Trust, except in compliance with all applicable
federal and state securities laws and the rules and regulations of
applicable regulatory agencies or authorities. In connection with
offers to sell and sales of shares of the Trust, we agree to deliver
or cause to be delivered to each person to whom any such offer or
sale is made, at or prior to the time of such offer or sale, a copy
of the Prospectus, and upon request, the Statement of Additional
Information, of the Trust and the calls of shares involved. We
further agree to obtain for each customer to whom we sell shares any
taxpayer identification number certification required under Section
3406 of the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations promulgated thereunder, and to provide you or
your designed with timely written notice of any failure to obtain
such taxpayer identification number certification in order to enable
the implementation of any required backup withholding in accordance
with Section 3406 of the Code and the regulation thereunder. Unless
otherwise mutually agreed in writing, you shall deliver or cause to
be delivered to each customer who purchases shares through us copies
of all annual interim reports, proxy solicitation materials and any
such other information and materials relating to such Trust and
prepared by or on behalf of you, the Trust or its investment
adviser, investment sub-adviser, custodian, transfer agent or
dividend disbursing agent for distribution to such customer. You
agree to supply us with copies of the Prospectus, Statement of
Additional Information, annual reports, interim reports, proxy
solicitation materials and any such other information and materials
relating to the shares of the Trust in reasonable quantities upon
request. We acknowledge that any materials or information that you
furnish to us, other than Prospectuses, annual and interim reports
to shareholders and proxy solicitation materials prepared by the
Trust, are your sole responsibility and not the responsibility of
the Trust.
4. We shall not make any representation concerning any shares or series
of the Trust shares other than those contained in the Prospectus or
in any promotional materials or sales literature furnished to us by
you or the Company. We shall not furnish or cause to be furnished to
any person or display or publish any information or materials
relating to Trust shares (including, without limitation, promotional
materials and sales literature, advertisements, press releases,
announcements, statements, posters, signs or other similar
materials), except such information and materials as may be
furnished to us by you or the Trust, and such other information and
materials as may be approved in writing by you.
5. In determining the amount of any dealer allowance or sales
commission payable to us hereunder, you reserve the right to exclude
any sales which you reasonably determine are not made in accordance
with the terms of the applicable Prospectus and the provisions of
this Agreement. Unless at the time of transmitting an order we
advise you or the transfer agent for the Trust involved (the
"Transfer Agent") to the contrary, the shares ordered will be deemed
to be the total holdings of the specified investor.
6. (a) In accordance with the terms of the Prospectus of the Trust sold
with a sales load at the then current public offering price per
share applicable to the total value (based on the higher of current
net asset value or the public offering price originally paid) of (i)
current purchases plus (ii) shares of such Trust (and any other fund
of the Sierra Trust Funds as may be permitted by the applicable
Prospectus that are already beneficially owned at the time purchased
by the customer on which a sales load has been paid. Certain
purchases made by a customer and certain other persons (for example,
a customer's spouse and minor children) as set forth from time to
time in the applicable Prospectus may be combined for purposes of
qualifying for a reduced sales charge. In each case where a reduced
sales load is applicable, we agree to furnish to the Transfer Agent
sufficient information to permit confirmation of qualification for a
reduced sales load, and acceptance of the purchase order is subject
to such confirmation. Reduced sales charges may be modified or
terminated at any time at the sole discretion of the Trust.
(b) We acknowledge that certain classes of investors may be entitled
to purchase sales at net asset value without a sales load as from
time to time provided in the applicable Prospectus.
(c) We agree to advise you promptly at your request as to the amount
of any and all sales by us qualifying for a reduced sales load or no
sales load.
(d) Exchanges (the investment of the proceeds from the liquidation
of shares of the Trust or series of the Trust in the shares of
another Trust or class of a Fund and vice-versa) shall, where
available, be made in accordance with the terms of each applicable
Prospectus.
7. The procedures relating to orders and the handling thereof will be
subject to the terms of the Prospectus of the Trust involved and
instructions received by us from you or the Transfer Agent from time
to time. No conditional order will be accepted. We agree that
purchase orders placed by us will be made only for the purpose of
covering purchase orders already received from our customers and
that we will not make purchases for any other securities dealer or
broker. Furthermore, we shall place purchase orders from customers
with the Trust immediately and shall not withhold the placement of
such orders so as to profit ourselves; provided, however, that the
foregoing shall not prevent the purchase of shares of any Trust by
us for our own bona fide investment. We agree that: (a) we shall not
effect any transactions (including, without limitation, any purchase
and redemptions) in any Trust shares registered in the name of, or
beneficially owned by, any customer unless such customer has granted
us full right, power and authority to effect such transactions on
his or her behalf, and (b) you, the Trust, each Transfer Agent and
your and their respective officers, directors or trustees, agents,
employees and affiliates shall not be liable for, and shall be fully
indemnified and held harmless by us from and against, any and all
claims, demands, liabilities and expenses (including, without
limitation, reasonable attorney's fees) which may be incurred by you
or any of the foregoing persons entitled to indemnification from us
hereunder arising out of or in connection with the execution of any
transactions in Trust shares registered in the name of, or
beneficially owed by, any customer in reliance upon any oral or
written instructions believed to be genuine and to have been given
by or on behalf of us. The indemnification agreement contained in
this Paragraph 7 shall survive the termination of this Agreement.
8. (a) We agree that payment for orders from us for the purchase of
Trust shares will be made in accordance with the terms of the
Prospectus. On or before the settlement date of each purchase order
for shares of any Trust, we shall either (1) remit to an account
designated by you with the Transfer Agent an amount equal to the
then current public offering price of such shares being purchased
less our dealer allowance, if any, with respect to such purchase
order as determined by you in accordance with the terms of the
applicable Prospectus, or (2) remit to an account designated by you
with the Transfer Agent an amount equal to the then current public
offering price of such shares being purchase order as determined by
you in accordance with the terms of the applicable Prospectus, in
which case our dealer allowance, if any, shall be payable to us on
at least a monthly basis. If payment for any purchase order is not
received in accordance with the terms of the applicable Prospectus,
you reserve the right, without notice, to cancel the sale and to
hold us responsible for any loss sustained as a result thereof.
(b) If any shares sold under the terms of this Agreement are sold
with a sales load and are repurchased for the account of a Trust or
are tendered for repurchase within seven (7) business days after
confirmation of our purchase order for such shares: (i) we shall
forthwith refund to you the full dealer allowance received by us on
the sale; and (ii) you shall forthwith pay to the Trust your portion
of the sales load on the sale which had been retained by you, if
any, and shall also pay to the Company the amount refunded by us.
9. We hereby represent and warrant that: (a) we are a corporation,
partnership or other entity duly organized and validly existing in
good standing under the laws of the jurisdiction in which we are
organized; (b) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly
authorized by all necessary action and all other authorizations and
approvals (if any) required for our lawful execution and delivery of
this Agreement and our performance hereunder have been obtained; and
(c) upon execution and delivery by us, and assuming due and valid
execution and delivery by you, this Agreement will constitute a
valid and binding agreement, enforceable against us in accordance
with its terms.
10. We further represent and warrant that we are a member of NASD and,
with respect to any sales in the United States, we agree to abide by
all of the rules and regulations of the NASD, including, without
limitation, its Rules of Fair Practice. We agree to comply with all
applicable federal and state laws, rules and regulations. You agree
to inform us, upon request, as to the states in which you believe
the shares of the Trust have been qualified for sale under, or
exempt from the requirements of, the respective securities laws of
such states, but you shall have no obligation or responsibility to
make shares available for sale to our customers in any jurisdiction.
We agree to notify you immediately in the event of our expulsion or
suspension from the NASD. Our expulsion from the NASD will
automatically terminate this Agreement immediately without notice.
Our suspension from the NASD will terminate this Agreement effective
immediately upon written notice of termination to us.
11. The names and addresses and other information concerning our
customers are and shall remain our sole property, and neither you
nor your affiliates shall use such name, address or other
information for any purpose except in connection with the
performance of your duties and responsibilities hereunder and except
for servicing and informational mailings relating to the Trust.
Notwithstanding the foregoing, this Paragraph 11 shall not prohibit
you or any of your affiliates from utilizing for any purpose the
names, addresses or other information concerning any of our
customers if such names, addresses or other information are obtained
in any manner other than from us pursuant to this Agreement. The
provisions of this Paragraph 11 shall survive the termination of
this Agreement.
12. Neither this Agreement nor the performance of the services of the
respective parties hereunder shall be considered to constitute an
exclusive arrangement, or to create a partnership, association or
joint venture between you and us. Neither party hereto shall be, act
as, or represent itself as, the agent or representative of the
other, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express
or implied, against or in the name of, or on behalf of, the other
party. This Agreement is not intended to, and shall not, create any
rights against either party hereto by any third party solely on
account of this Agreement. Neither party hereto shall use the name
of the other party in any manner without the other party's prior
written consent, except as required by any applicable federal or
state law, rule or regulation, and except pursuant to any
promotional programs mutually agreed upon in writing by the parties
hereto.
13. Except as otherwise specifically provided herein, all notices
required or permitted to be given pursuant to this Agreement shall
be given in writing and delivered by personal delivery (with
confirming copy by mail as provided herein). Unless otherwise
notified in writing, all notices to you shall be given or sent to
you at your office, located at 0000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxxxx 00000, and all notices to us shall be given
or sent to us at our address shown below.
14. This Agreement shall become effective only when accepted and signed
by you, and may be terminated at any time by either party hereto
upon fifteen (15) days prior written notice to the other party. This
Agreement may be amended only by a written instrument signed by both
of the parties hereto and may not be assigned by either party
without the prior written consent of the other party. This Agreement
constitutes the entire agreement and understanding between the
parties hereto relating to the subject matter hereof and supersedes
any and all prior agreements between the parties relating to said
subject matter.
15. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of California, without giving effect
to principles of conflicts of laws.
Very truly yours,
Name of Broker/Dealer: _____________________
(Please print or type)
Address: ___________________________________
___________________________________
Telephone Number: __________________________
Date: __________ By: _______________________
Authorized Officer
________________________
(Please print or type)
NOTE: Please sign and return both copies of this Agreement to Sierra Investment
Services Corporation. Upon acceptance, one countersigned copy will be
returned to you for your files.
Accepted:
SIERRA INVESTMENT SERVICES CORPORATION
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Date: __________ By: _______________________
Authorized Officer
