ANTI-MONEY LAUNDERING AMENDMENT
TO
DISTRIBUTION AGREEMENT
This ANTI-MONEY LAUNDERING AMENDMENT (this "Amendment") amends as of the
23rd day of October 2002 (the "Effective Date"), the Distribution Agreement,
dated as of __________________, between AQUILA ROCKY MOUNTAIN EQUITY FUND (the
"Fund") and Aquila Distributors Inc. (the "Distributor") (the "Agreement").
WHEREAS, the Distributor acts as principal underwriter and exclusive
distributor of the shares of the Fund ("Shares") pursuant to the Agreement:
WHEREAS, the Distributor receives orders for the purchase of Shares from
investors;
WHEREAS, the Distributor has implemented various anti-money laundering
("AML") procedures as described below, which Distributor has found to be
reasonable, and the Fund desires to delegate certain AML procedures to the
Distributor, as permitted by the USA PATRIOT Act and the regulations thereunder
(collectively, the "PATRIOT Act").
WHEREAS, the Fund and the Distributor desire to amend the Agreement to
reflect such services explicitly;
NOW THEREFORE, The Fund and the Distributor hereby agree that, as of the
Effective Date, the Agreement shall be amended by adding the following new
provision:
1. Anti-Money Laundering.
To the extent the other provisions of this Agreement require the
Distributor to establish, maintain and monitor accounts of investors in the
Fund consistent with securities laws, the Distributor shall perform all
reasonable actions necessary to help the Fund be in compliance with United
States federal AML laws applicable to investor activity, including the Bank
Secrecy Act and the PATRIOT Act, as described hereinafter.
In this regard, the Distributor shall: (a) establish and implement written
internal policies, procedures and controls reasonably designed to help
prevent the Fund from being used to launder money or finance terrorist
activities; (b) provide for independent testing, by an employee who is not
responsible for the operation of the Distributor's AML program or by an
outside party, for compliance with the Distributor's established policies
and procedures; (c) designate a person or persons responsible for
implementing and monitoring the operation and internal controls of the
Distributor's AML program; and (d) provide ongoing training of the
Distributor's personnel relating to the prevention of money-laundering
activities. Upon the reasonable request of the Fund, the Distributor shall
provide to the Fund's officer in charge of AML compliance (the "AML
Compliance Officer"): (x) a copy of the Distributor's written AML policies
and procedures (it being understood such information is to be considered
confidential and treated as such and afforded all protections provided to
confidential information under this Agreement): (y) a copy of a written
assessment or report prepared by the party performing the independent
testing for compliance, or a summary thereof, or a certification that the
findings of the independent party are satisfactory; and (z) a summary of
the AML training provided for appropriate personnel.
Unless otherwise preformed by the Fund's transfer agent, the Distributor
shall also: (i) collect and maintain investor information, verify the
identity of investors and check investor identities against all government
lists of known or suspected terrorists and terrorist organizations in
compliance with the procedures set forth in the Fund's AML program and the
PATRIOT Act; (ii) provide notice of the Fund's customer identification
procedures to prospective investors in the manner permitted by the PATRIOT
Act before an account is opened; (iii) maintain records of the information
collected and methods used to verify investor identity in compliance with
the PATRIOT Act; (iv) monitor investor accounts for suspicious activity to
the extent required by AML laws or the PATRIOT Act; and (v) make any
required regulatory filings on behalf of the Fund including, but not
limited to, Form 8300 and suspicious activity reports (to the extent
required by AML laws) and promptly provide a copy of all such reports filed
to the Fund's AML Compliance Officer.
To the extent that a Fund regulator wishes to examine the Distributor
regarding its services hereunder, the Distributor shall cooperate with and
permit examinations of its records and personnel by such regulator,
coordinating any such response with the Fund's AML Compliance Officer. The
Distributor also agrees to make available to examiners from such regulatory
agencies any information and records relating to the Fund's AML program as
such examiners shall reasonably request.
2. General. This Amendment contains the entire understanding between the
parties with respect to the services contemplated hereby. Except as expressly
set forth herein, the Agreement shall remain unaffected hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
AQUILA ROCKY MOUNTAIN EQUITY FUND
By: _________________________________
Name:
Title:
AQUILA DISTRIBUTORS, INC.
By: __________________________________
Name:
Title:
