CASH ASSETS TRUST
DISTRIBUTION AGREEMENT
AGREEMENT, made as of this 28th day of May, 1999 by and
between CASH ASSETS 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 Business Trust and the Distributor have
previously entered into the Distribution Agreement with respect
to a portfolio of the Business Trust entitled PACIFIC CAPITAL
CASH ASSETS TRUST (the "Trust") dated as of February 10, 1999;
WHEREAS, on March 5, 1999 the Board of Trustees of the
Business Trust approved a new Distribution Agreement, to go into
effect upon anticipated changes in ownership of the Distributor;
and
WHEREAS, the transfer of shares of the Distributor effecting
such changes in ownership occurred as of the date hereof; and
WHEREAS, contemporaneously therewith pursuant to an
instrument executed and delivered between the parties, a new
Distribution Agreement went into effect, identical in its
provisions to the Distribution Agreement in effect immediately
prior thereto, except for the date of its effectiveness; and
WHEREAS, this Agreement is a document explicitly containing
all of the provisions of the new Distribution Agreement,
representing in explicit form the new Distribution Agreement
created thereby;
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 a
between the parties hereto as follows:
W I T N E S S E T H :
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 Trust. The price
at which shares of the Trust 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
Trust current as of the time of such sale (collectively, the
"Current Prospectus"). The Distributor agrees to bear the costs
of printing and distributing all copies of the Trust's
prospectuses, statements of additional information and reports to
shareholders which are not sent to the Trust's shareholders, as
well as the costs of supplemental sales literature, advertising
and other promotional activities. The Distributor will, as
disbursing agent for the Administrator, make such payments to
Qualified Recipients, as those terms are defined in the Trust's
Distribution Plan, as the Administrator may authorize and provide
funds for, from time to time.
2. The Business Trust agrees to issue shares of the Trust,
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 Trust and shall enter
into all of its engagements, agreements and contracts as
principal on its own account. The title to shares of the Trust
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 Trust 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 Trust, 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 Trust'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 Trust 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 Trust'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 Trust.
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
next June 30, 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 Trust.
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 Trust.
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 Trust. 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 Trust'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 Trust 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 Trust
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.
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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.
ATTEST: CASH ASSETS TRUST
_______________________ By:______________________________
ATTEST: AQUILA DISTRIBUTORS, INC.
_______________________ By:______________________________
