SHAREHOLDER SERVICES AGREEMENT
Aquila Distributors, Inc. (the "Distributor")
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Dear Sirs:
NARRAGANSETT INSURED TAX-FREE INCOME FUND (the "Fund") confirms its
agreement with Aquila Distributors, Inc. (the "Distributor") with respect to the
servicing of shareholder accounts. This Agreement is entered into pursuant to
the Fund's Shareholder Services Plan dated October 31, 1997; such Shareholder
Services Plan, in its current form and as it may subsequently be amended from
time to time, is hereby incorporated by reference and referred to herein as "the
Plan." All terms defined in the Plan shall have the same meanings when used
herein. It is understood that in the event of a conflict between any provision
of this Agreement and the terms of the Plan, the Plan shall govern. Part I of
this Agreement applies solely to the Level-Payment Class ("Class C"), Part II
solely to the Financial Intermediary Class ("Class I") and Part III to both
classes of shares.
Part I
Payments Involving Fund Assets Allocated to Level-Payment Shares
Section 1. Compensation and Services to be Rendered
(a) The Fund will pay the Distributor an annual Service Fee in compensation
for its services in connection with the servicing of shareholder accounts as
contemplated by the Plan. The Service Fee paid will be calculated daily and paid
monthly by the Fund at the annual rate of .25% of the average annual net assets
of the Fund represented by the Level-Payment Shares.
(b) The Service Fee will be used by the Distributor to provide compensation
for ongoing servicing and/or maintenance of shareholder accounts and to cover an
allocable portion of overhead and other office expenses of the Distributor
and/or selected dealers related to the servicing and/or maintenance of
shareholder accounts. It is understood that compensation may be paid by the
Distributor to persons, including employees of the Distributor, who respond to
inquiries of Level-Payment Shareholders of the Fund regarding their ownership of
shares or their accounts with the Fund or who provide other similar services not
otherwise required to be provided by the Fund's investment manager, transfer
agent or other agent of the Fund.
Part II
Payments Involving Fund Assets Allocated to
Financial Intermediary Shares
Section 2. Service Payments
Subject to the direction and control of the Board of Trustees as set forth
in the Plan, the Fund shall make Service Payments to Qualified Recipients
pursuant to instructions by the Distributor, either directly to the Distributor
or, as instructed, through the Distributor or shareholder servicing agent to
other Qualified Recipients. The amounts, sources and purposes of the Service
Payments shall be subject to the restrictions set forth in the Plan. To the
extent that Service Payments are made directly to the Distributor, the
Distributor acknowledges that such payments are intended as compensation for the
Distributor"s services as contemplated by the Plan and undertakes to provide
such services.
Part III
General Provisions
Section 3. Reports
While this Agreement is in effect, the Distributor shall provide the
reports called for in Section 6 of the Plan.
Section 4. Continuance of Agreement
This Agreement will continue in effect for a period of more than one year
from the date of its effectiveness only so long as its continuance is
specifically approved annually by a majority vote of both (a) the full Board of
Trustees of the Fund and (b) those Trustees who are not interested persons of
the Fund and who have no direct or indirect financial interest in the operation
of the Plan or this Agreement (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Agreement.
Section 5. Termination
(a) This agreement (or either of Parts I or II alone) may be terminated at
any time, without the payment of any penalty, by vote of a majority of the
Independent Trustees. In addition, either of Parts I or II may be terminated by
a vote of a majority of the outstanding shares of the class of shares to which
that part relates. Any termination permitted by this Section 5 may be effected
on not more than 60 days' written notice to the Distributor.
(b) This Agreement will terminate automatically in the event of its
assignment or the termination of the Plan. In the event that the Plan is
terminated only with respect to one of the Level-Payment or Financial
Intermediary Classes, this Agreement shall be terminated with respect to that
class of shares.
Section 6. Amendments
No material amendment to this Agreement may be made unless approved by the
Fund's Board of Trustees in the manner described in Section 4 above, provided,
however, that in the event of an amendment of the Plan, this Agreement shall be
regarded as amended to conform to such amendment of the Plan as if this
Agreement has been formally so amended.
Section 7. Meaning of Certain Terms
As used in this Agreement, the terms "assignment," "interested person" and
"majority of this outstanding voting securities" will be deemed to have the
meaning that those terms have under the Investment Company Act of 1940, as
amended (the "Act") and the rules and regulations under the Act, subject to any
exemption that may be granted to the Fund under the Act by the Securities and
Exchange Commission.
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Section 8. Dates
This Agreement shall be effective as of the date first written above.
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by signing and
returning to us the enclosed copy of this Agreement.
Very truly yours,
NARRAGANSETT INSURED TAX-FREE INCOME
FUND
By:________________________
Xxxxxx X. XxXxxxxx,
Treasurer
Accepted:
AQUILA DISTRIBUTORS, INC.
By:_____________________________
Xxxxxx X. Xxxxxxxx
Senior Vice President
and Compliance Officer
