AQUILA DISTRIBUTORS, INC.
SALES AGREEMENT
(for use with financial institutions)
From:
____________________________
____________________________
____________________________
To:
Aquila Distributors, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, N.Y. 10017
Gentlemen:
We desire to enter into an agreement with you to make avail-
able to our customers the shares of any of the funds of
which you are, or may become, Distributor (hereinafter col-
lectively referred to as the "Funds" or individually as the
"Fund") on a fully disclosed basis wherein you would confirm
transactions of our customers in such shares directly to
them. Upon acceptance of this Agreement by you, we under-
stand that we may make shares of the Funds available to our
customers, subject to all terms and conditions hereof and to
your right without notice to suspend or terminate the sale
of shares of any one or more of the Funds.
1. We understand that shares of the Funds will be offered
and sold by you at the current offering price in effect as
set forth in each Fund's then current Prospectus (which term
as used herein includes any related Statement of Additional
Information). All purchase requests and applications sub-
mitted by us are subject to acceptance or rejection as set
forth in each Fund's then current Prospectus.
2. Each of us certifies (a) that the party in question is a
member of the National Association of Securities Dealers,
Inc. ("NASD") and agrees to maintain membership in the NASD,
or (b) in the alternative, in our case, that we are either
(i) a foreign firm not eligible for membership in the NASD,
or (ii) a bank, as defined in Section 3(a)(6) of the Securi-
ties Exchange Act of 1934. In any case, we and you agree to
abide by all applicable rules and regulations of the NASD,
including without limitation, Section 26 of Article III of
the NASD Rules of Fair Practice, all of which are incorpora-
xxx herein as if set forth in full. We and you further
agree to comply with all applicable State and Federal laws
and regulations. We and you agree that we and you will make
available for sale shares of the Funds only in those states
or jurisdictions whose laws so permit, whether or not such
permission is dependent on registration or qualification of
the Funds or their shares under such laws.
3. We shall make shares of the Funds available only in ac-
cordance with the terms and conditions of the then current
Prospectus of each Fund, and we shall make no representa-
tions not included in said Prospectus or in any authorized
supplemental material supplied by you. In no transaction
where we make shares of the Funds available to our customers
shall we have any authority to act as agent for the Funds.
The customers in question are for all purposes our customers
and not your customers. However, you will be responsible
for mailing each Fund's then current Prospectus (not inclu-
ding the related Statement of Additional Information) with
the confirmations. You will clear transactions for each of
our customers only upon our authorization, it being under-
stood in all cases that (i) we are acting as agent for the
customer, (ii) the transactions are without recourse against
us by the customer except to the extent that our failure to
transmit orders in a timely fashion results in a loss to our
customer, (iii) our customer will have full beneficial own-
ership of the shares, (iv) each transaction is initiated
solely upon the order of the customer, and (v) each trans-
action is for the account of the customer and not for our
account. We agree to be responsible for the proper instruc-
tion and training of all personnel employed by us in this
area, in order that such shares will be offered in accor-
dance with the terms and conditions of this Agreement and
all applicable laws and regulations. We agree to hold you
and the Funds harmless and to indemnify you and the Funds in
the event that we, or any of such personnel, violate any law
or regulation, or any provisions of this Agreement, which
violation may result in liability to you and/or any Fund;
and in the event you and/or such Fund determine to refund
any amounts paid by any investor by reason of any such vio-
lation on our part, we shall return to you and/or such Fund
any agency commissions previously paid to us with respect to
the transaction for which the refund is made. All expenses
which we incur in connection with our activities under this
Agreement will be borne by us.
4. We understand and agree that the sales charge to the cus-
tomer and the agency commission payable to us relative to
sales of shares of any Fund made by us will be in an amount
as set forth in the then current Prospectus of such Fund or
in separate written notice to us.
5. Payment for purchases by our customers of shares of any
Fund made by wire order from us will be received by you or
such Fund within five business days after the acceptance of
our order or such shorter time as may be required by law.
If such payment is not so received, we understand that you
reserve the right, without notice, forthwith to cancel the
sale, or, at your option, to sell the shares ordered by us
back to such Fund, in which latter case we may be held re-
sponsible for any loss, including loss of profit, suffered
by you and/or such Fund resulting from our failure to make
the aforesaid payment. Where sales of shares of any Fund
are contingent upon such Fund's receipt of Federal funds in
payment therefor, we shall forward promptly to you any pur-
chase orders and payments received by us from our customers.
6. We agree to make shares available to our customers only
(a) at the public offering price (except as provided in Pa-
ragraph 12 hereunder), (b) from you, and (c) to cover orders
already received from our customers. We shall not withhold
placing with you orders received from our customers so as to
profit ourselves as a result of such withholding; e.g., by a
change in the net asset value from that used in determining
the public offering price to our customers.
7. Unless at the time of transmitting an order we advise you
to the contrary, you may consider the order to be the total
holding of the investor and assume that the investor is not
entitled to any reduction in sales price beyond that accor-
ded to the amount of the purchase as determined by the sche-
dule set forth in the then current Prospectus. If we make
shares available to our customers as provided in Paragraph
12 hereunder, we shall so indicate to you at the time of
transmitting such order.
8. We understand and agree that if any shares sold to our
customers under the terms of this Agreement are redeemed by
any Fund (including redemptions resulting from an exchange
for shares of another investment company) or are repurchased
by you as agent for such Fund or are tendered to such Fund
for redemption within seven business days after the confir-
mation to our customers of our original purchase order for
such shares, we shall pay forthwith to you the full amount
of the commission allowed to us on the original sale, pro-
vided you notify us of such repurchase or redemption within
ten days of the date upon which written redemption requests
(and, if applicable, share certificates) are delivered to
you or to such Fund.
9. Your obligations to us under this Agreement are subject
to all the provisions of any agreements entered into between
you and the Funds. We understand and agree that in perfor-
ming our services covered by this Agreement we are acting as
agent for our customers, and you are in no way responsible
for the manner of our performance or for any of our acts or
omissions in connection therewith. Nothing in this Agree-
ment shall be construed to constitute us or any of our a-
gents, employees or representatives as your agent, partner
or employee, or as the Funds' agent or employee.
10. We may terminate this Agreement by notice in writing to
you, which termination shall become effective thirty days
after the date of mailing such notice to you. However, our
termination of this Agreement will not terminate our respon-
sibilities under sections (iv) and (v) of Paragraph 12 here-
under. We agree that you have and reserve the right, in
your sole discretion without notice, to suspend sales of
shares of any one or more of the Funds, or to withdraw en-
tirely the offering of shares of any one or more of the
Funds, or, in your sole discretion, to modify, amend, or
cancel this Agreement upon written notice to us of such mo-
dification, amendment, or cancellation, which shall become
effective on the date stated in such notice. Without limi-
ting the foregoing, you may terminate this Agreement for
cause on violation by us of any of the provisions of this
Agreement, said termination to become effective on the date
of mailing notice to us of such termination. Without limi-
ting the foregoing, any provision hereof to the contrary
notwithstanding, our expulsion from the NASD, if we are a
member of the NASD, will automatically terminate this Agree-
ment without notice; our suspension from the NASD, if we are
a member of the NASD, or violation of applicable State or
Federal laws or regulations (whether or not we are a member
of the NASD) will terminate this Agreement effective upon
the date of your mailing notice to us of such termination.
Your failure to terminate for any cause will not constitute
a waiver of your right to terminate at a later date for any
such cause. All notices hereunder will be to the respective
parties at the addresses listed hereon, unless changed by
notice given in accordance with this Agreement.
11. This Agreement will become effective when it is executed
and dated by you, and will be in substitution of any prior
agreement between you and us covering shares of the Funds.
This Agreement is not assignable or transferable, except
that you may assign or transfer this Agreement to any suc-
cessor firm or corporation which becomes a principal under-
writer of the Funds.
12. We may make shares of the Funds available to our custo-
mers at the next determined net asset value of such shares
under the following circumstances: (i) each such purchase
order is on behalf of a trust, agency, or custodial client,
(ii) we have, as to each such purchase order, discretionary
investment responsibility over the assets in question, (iii)
the relationship between the us and the client was not
formed solely for the purpose of purchasing shares of any
Fund at net asset value, (iv) the shares purchased pursuant
to such purchase order will not be resold except by redemp-
tion, (v) there is no charge relating to such purchase other
than our normal service charge, and (vi) we may disclose the
name of any Fund to the client without your consent.
_________________________________
(name of financial institution)
By:______________________________
(signature of officer)
_________________________________
(name and title of officer)
_________________________________
(telephone number)
Accepted:
Aquila Distributors, Inc.
By:________________________
(signature of officer)
___________________________
(name and title of officer)
Dated:______________, 19__
