Exhibit (e)(3)
FORM OF UNDERWRITING AGREEMENT FOR
PILGRIM MAYFLOWER TRUST
PILGRIM GROWTH + VALUE FUND
PILGRIM INTERNATIONAL VALUE FUND
PILGRIM RESEARCH ENHANCED INDEX FUND
AGREEMENT made and entered into by and between PILGRIM MAYFLOWER TRUST, a
Massachusetts business trust (the "Trust") on behalf of PILGRIM GROWTH + VALUE
FUND, PILGRIM INTERNATIONAL VALUE FUND, and PILGRIM RESEARCH ENHANCED INDEX FUND
(each a "Fund" and collectively the "Funds"), and ING PILGRIM SECURITIES, INC.,
a Delaware corporation (the "Underwriter"), on this 1st day of September, as
amended and restated May 9, 2001.
1. Each Fund hereby appoints the Underwriter as its exclusive agent to
promote the sale and to arrange for the sale of shares of beneficial interest of
each class of the Fund, including both unissued shares and treasury shares,
through broker-dealers or otherwise, in all parts of the United States and
elsewhere throughout the world. Each Fund agrees to sell and deliver its shares
of each class, upon the terms hereinafter set forth, as long as it has unissued
and/or treasury shares available for sale.
(a) Each Fund hereby authorizes the Underwriter, subject to applicable law
and the Trust's Declaration (the "Declaration"), to accept, for the respective
account of each Fund, orders for the purchase of its shares, satisfactory to the
Underwriter, as of the time of receipt of such orders by the dealer or as
otherwise described in the Prospectus of the Trust.
(b) The public offering price of the shares of each Fund shall be the net
asset value per share (as determined by each Fund) of the outstanding shares of
each Fund. The net asset value shall be regularly determined on every business
day as of the time of the regular closing of the New York Stock Exchange
("NYSE") and the public offering price based upon such net asset value shall
become effective as set forth from time to time in the Trust's Prospectus; such
net asset value shall also be regularly determined, and the public offering
price based thereon shall become effective, as of such other times for the
regular determination of net asset value as may be required or permitted by
rules of the National Association of Securities Dealers, Inc. ("NASD") or of the
Securities and Exchange Commission ("SEC"). Each Fund shall furnish daily to the
Underwriter, with all possible promptness, a detailed computation of net asset
value of its shares.
(c) Class A Shares
(i) The public offering price of Class A shares shall be equal to the
net asset value, as described above, plus a commission to be
fixed from time to time by the Underwriter not to exceed 6% of
the public offering price, except that such price per share may
be adjusted to the nearest cent. The Underwriter may fix quantity
discounts and other similar terms not inconsistent with the
provisions of the Investment Company Act of 1940, as amended (the
"1940 Act"). The Underwriter shall not impose any commission,
permit any quantity discounts or impose any other similar terms
in connection with the sale of Class A shares of each Fund except
as disclosed in the Prospectus of the Trust.
(ii) The Underwriter shall be entitled to deduct a commission on all
Class A shares sold equal to the difference between the public
offering price and the net asset value on which such price is
based. If any such commission is received by a Fund, it will pay
the commission to the Underwriter. Out of such commission, the
Underwriter may allow to dealers such concessions as the
Underwriter may determine from time to time. Notwithstanding
anything in the Agreement, sales may be made at net asset value
as provided in the Trust's Prospectus.
(d) Class B Shares
(i) In consideration of the Underwriter's services as principal
underwriter of each Fund's Class B shares pursuant to this
Agreement and in accordance with the provisions of the Trust's
Amended and Restated Distribution and Service Plan (the "Plan")
in respect of such shares, each Fund agrees: (I) to pay to the
Underwriter or, at the Underwriter's direction, to a third party,
monthly in arrears on or prior to the 5th business day of the
following calendar month (A) a service fee (the "Service Fee")
equal to 0.25 of 1% per annum of the average daily net asset
value of the Class B shares of the Fund outstanding from time to
time, and (B) the Underwriter's "Allocable Portion" (as
hereinafter defined) of a fee (the "Distribution Fee") equal to
0.75 of 1% per annum of the average daily net asset value of the
Class B shares of the Fund outstanding from time to time, and
(II) to withhold from redemption proceeds in respect of Class B
shares of the Fund the Underwriter's Allocable Portion of the
Contingent Deferred Sales Charges ("CDSCs") payable in respect of
such redemption as provided in the Prospectus of the Fund and to
pay the same over to the Underwriter or, at the Underwriter's
direction, to a third party, at the time the redemption proceeds
in respect of such redemption are payable to the holder of the
Class B shares redeemed.
(ii) The Underwriter will be deemed to have performed all services
required to be performed in order to be entitled to receive its
Allocable Portion of the Distribution Fee payable in respect of
the Class B shares of each Fund upon the settlement date of each
sale of a "Commission Share" (as defined in the Allocation
Schedule attached hereto as Schedule A) of the Fund taken into
account in determining the Underwriter's Allocable Portion of
such Distribution Fees.
(iii) Notwithstanding anything to the contrary set forth in this
Agreement or (to the extent waiver thereof is permitted thereby)
applicable law, each Fund's obligation to pay the Underwriter's
Allocable Portion of the Distribution Fees payable in respect to
the Class B shares of the Fund shall not be terminated or
modified for any reason (including a termination of this
Agreement) except: (a) to the extent required by a change in the
1940 Act, the rules thereunder or the Conduct Rules of the NASD,
in each case enacted or promulgated after Xxxxx 00, 0000, (x) on
a basis which does not alter the Underwriter's Allocable Portion
of the Distribution Fees computed with reference to Commission
Shares the Date of Original Issuance (as defined in the
Allocation Schedule) of which occurs on or prior to the adoption
of such -- termination or modification and with respect to Free
Shares (as defined in the Allocation Schedule) which would be
attributed to such Underwriter under the Allocation Schedule with
reference, or (c) in connection with a "Complete Termination" (as
hereinafter defined) of the Plan.
(iv) Each Fund will not take any action to waive or change any CDSC in
respect of the Class B shares of the Fund, except as provided in
the Fund's Prospectus or statement of additional information as
in effect as of the date hereof, without the consent of the
Underwriter and the permitted assigns of all or any portion of
its rights to its Allocable Portion of the CDSCs.
(v) Notwithstanding anything to the contrary in this Agreement,
neither the termination of the Underwriter's role as principal
distributor of the Class B shares of any Fund, nor the
termination of this Agreement, nor the termination of the Plan
will terminate the Underwriter's right to its Allocable Portion
of the CDSCs in respect of the Class B shares of the Fund.
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(vi) Notwithstanding anything to the contrary in this Agreement, the
Underwriter may assign, sell or pledge (collectively, "Transfer")
its rights to the Service Fees and its Allocable Portion of the
Distribution Fees and CDSCs (but not its obligations to any Fund
under this Agreement) to raise funds to make the expenditures
related to the distribution of Class B shares of each Fund and in
connection therewith, upon receipt of notice of such Transfer,
the Fund shall pay, or cause to be paid, to the assignee,
purchaser or pledgee (collectively with their subsequent
transferees, "Transferees") such portion of the Underwriter's
Service Fees, Allocable Portion of the Distribution Fees and
CDSCs in respect of the Class B shares of each Fund so
Transferred. Except as provided in (iii) above and
notwithstanding anything to the contrary set forth elsewhere in
this Agreement, to the extent the Underwriter has Transferred its
rights thereto to raise funds as aforesaid, each Fund's
obligation to pay the Underwriter's Allocable Portion of the
Distribution Fees and CDSCs payable in respect of the Class B
shares of the Fund shall be absolute and unconditional and shall
not be subject to dispute, offset, counterclaim or any defense
whatsoever, at law or equity, including, without limitation, any
of the foregoing based on the insolvency or bankruptcy of the
Underwriter's right to the Distribution Fees and CDSCs in respect
of the Class B shares of the Fund, which have been so Transferred
in connection with such Transfer). Each Fund agrees that each
such Transferee is a third party beneficiary of the provisions of
this clause (vi) but only insofar as those provisions relate to
Distribution Fees and CDSCs Transferred to such Transferee.
(vii) For purposes of the Agreement, the term Allocable Portion of
Distribution Fees and CDSCs payable in respect of the Class B
shares of any Fund shall mean the portion of such Distribution
Fees and CDSCs allocated to the Underwriter in accordance with
the Allocation Schedule attached hereto as Schedule A.
(viii) For purposes of this Agreement, the term "Complete Termination"
of the Plan in respect of any Fund means a termination of the
Plan involving the complete cessation of the payment of
Distribution Fees in respect of all Class B shares of the Fund,
and the termination of the Plan and the complete cessation of the
payment of distribution fees pursuant to any other distribution
plan pursuant to Rule 12b-1 under the 1940 Act in respect of the
Class B shares of the Fund and any successor fund or any fund
acquiring a substantial portion of the assets of the Fund and for
every future class of shares which has substantially similar
characteristics to the Class B shares of the Fund taking into
account the manner of payment and amount of sales charge, CDSC or
other similar charges borne directly or indirectly by the holders
of such shares; provided that (a) the Trustees of the Trust,
including the independent Trustees of the Trust, shall have
determined that such termination is in the best interest of the
Fund and the shareholders of the Fund, and (b) such termination
does not alter the CDSC as in effect at the time of such
termination applicable to Commission Shares of the Fund, the Date
of Original Issuance (as defined in the Allocation Schedule) of
which occurs on or prior to such termination.
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(ix) The underwriter may reallow any or all of the Distribution and
Service Fees and CDSCs which it is paid under the Agreement to
such dealers as the Underwriters may from time to time determine.
(x) The Underwriter may fix quantity discounts and other similar
variances or waivers of the CDSCs not inconsistent with the
provisions of the 1940 Act; provided however, that the
Underwriter shall not impose any commission, permit any quantity
discount, or impose any other similar waiver or variance in
connection with the sale of Class B shares except as disclosed in
the Prospectus of the Trust.
(e) Class C Shares
(i) As compensation for providing services under this Agreement, (A)
the Underwriter shall receive from each Fund distribution and
service fees under the terms and conditions set forth in the Plan
for each Fund adopted under Rule 12b-1 under the 1940 Act, as
that Plan may be amended from time to time and subject to any
further limitation on such fees as the Trustees may impose, and
(B) the Underwriter shall receive from each Fund all CDSCs
applied on redemption of Class C shares of such Fund. Whether and
to what extent a CDSC will be imposed with respect to a
redemption shall be determined in accordance with, and in a
manner set forth in, the Trust's Prospectus.
(ii) The Underwriter may reallow any or all of the distribution and
service fees and CDSCs which it is paid under the Agreement to
such dealers as the Underwriter may from time to time determine.
(iii) The Underwriter may fix quantity discounts and other similar
variances or waivers of the CDSC not inconsistent with the
provisions of the 1940 Act; provided however, that the
Underwriter shall not impose any commission, permit any quantity
discount, or impose any other similar waiver or variance in
connection with the sale of Class C shares except as disclosed in
the Prospectus of the Trust.
(f) Class T Shares
(i) The public offering price of Class T shares shall be based on the
net asset value per share (as determined by each Fund) of the
outstanding Class T shares of the Fund. The net asset value of
Class T shares shall be regularly determined on every business
day as of the time of the regular closing of the NYSE and the
offering price based upon such net asset value shall become
effective as set forth from time to time in the Trust's
Prospectus; such net asset value shall also be regularly
determined, and the offering price based thereon shall become
effective, as of such other times for the regular determination
of net asset value as may be required or permitted by rules of
the NASD or SEC. Each Fund shall furnish daily to the
Underwriter, with all possible promptness, a detailed computation
of net asset value of its Class T shares (if any).
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(ii) As compensation for providing services under this Agreement, (A)
the Underwriter shall receive from each Fund distribution and
service fees under the terms and conditions set forth in the Plan
for each Fund adopted under Rule 12b-1 under the 1940 Act, as
that Plan may be amended from time to time and subject to any
further limitation on such fees as the Trustees may impose, and
(B) the Underwriter shall receive from each Fund all CDSCs
applied on redemption of Class T shares of such Fund. Whether and
to what extent a CDSC will be imposed with respect to a
redemption shall be determined in accordance with, and in a
manner set forth in, the Trust's Prospectus.
(iii) The Underwriter may reallow any or all of the distribution and
services fees and CDSCs which it is paid under the Agreement to
such dealers as the Underwriter may from time to time determine.
(iv) The Underwriter may fix quantity discounts and other similar
variances or waivers of the CDSC not inconsistent with the
provisions of the 1940 Act; provided however, that the
Underwriter shall not impose any commission, permit any quantity
discount, or impose any other similar waiver or variance in
connection with the sale of Class T shares except as disclosed in
the Prospectus of the Trust.
2. The Underwriter agrees to devote reasonable time and effort to enlist
investment dealers to sell shares of each class of each Fund and otherwise
promote the sale and distribution and act as Underwriter for the sale and
distribution of the shares of each class of each Fund as such arrangements may
profitably be made; but so long as its does so, nothing herein contained shall
prevent the Underwriter from entering into similar arrangements with other funds
and to engage in other activities. Each Fund reserves the right to issue shares
of each class in connection with any merger or consolidation of a Fund with any
other investment company or any personal holding company or in connection with
offers of exchange exempted from Section 22(d) of the 1940 Act.
3. To the extent a Fund shall offer (as set forth in the Trust's
Prospectus) to provide physical certificates evidencing ownership of a class of
shares, upon receipt by a Fund at its principal place of business of a written
order from the Underwriter, together with delivery instructions, the Fund shall,
as promptly as practicable, cause certificates for the class of shares called
for in such order to be delivered or credited in such amounts and in such names
as shall be specified by the Underwriter, against payment therefor in such
manner as may be acceptable to the Fund.
4. All sales literature and advertisements used by the Underwriter in
connection with sales of the shares of each Fund shall be subject to the
approval of the respective Fund to which such literature relates. Each Fund
authorizes the Underwriter in connection with the sale or arranging for the sale
of its shares to give only such information and to make only such statements or
representations as are contained in the Prospectus or in sales literature or
advertisements approved by each respective Fund or in such financial statements
and reports as are furnished to the Underwriter pursuant to paragraph 6 below.
The Funds shall not be responsible in any way for any information, statements or
representations given or made by the Underwriter or its representatives or
agents other than such information, statements and representations.
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5. The Underwriter, as agent of each Fund, is authorized, subject to the
direction of each Fund, to accept shares of each class for redemption at prices
not in excess of their net asset value, determined as prescribed in the
Prospectus of the Trust. Each respective Fund shall reimburse the Underwriter
monthly for its out-of-pocket expenses reasonably incurred on behalf of each
Fund in carrying out the foregoing authorization, but the Underwriter shall not
be entitled to any commissions or other compensation in respect to such
redemptions. The Underwriter shall report all redemptions promptly to the
respective Funds.
6. The Trust, on behalf of each Fund, shall keep the Underwriter fully
informed with regard to it's affairs, shall furnish the Underwriter with a
certified copy of all financial statements, and a signed copy of each report,
prepared by independent public accountants and with such reasonable number of
printed copies of each annual and other periodic reports of each Fund as the
Underwriter may request, and shall cooperate fully in the efforts of the
Underwriter to sell and arrange for the sale of its shares of each class of
shares of the Fund and in the performance by the Underwriter of all its duties
under this Agreement.
7. Each Fund will pay or cause to be paid expenses (including counsel fees
and disbursements) of any registration of each class of shares of beneficial
interest under, but not limited to, federal, state or other regulatory
authority, fees of filing periodic reports with regulatory bodies and of
preparing, setting in type and printing the Prospectus and any amendments
thereto prepared for use in connection with the offering of shares of each class
of the Fund, for fees and expenses incident to the issuance of shares of
beneficial interest of each class, such as the cost of stock certificates (if
offered), issuance taxes, fees of the transfer agent, including the cost of
preparing and mailing notices to shareholders pertaining to transactions with
respect to shareholders' accounts, dividend disbursing agents' costs, including
the cost for preparing and mailing notices confirming shares acquired by
shareholders pursuant to the reinvestment of dividends and distributions, and
the mailing to shareholders of prospectuses, and notices and reports as may be
required from time to time by regulatory bodies or for such other purposes,
except for purposes of sales by the Underwriter as outlined in paragraph 8
hereof.
8. The Underwriter shall pay all of its own costs and expenses (other than
expenses and costs heretofore deemed payable by the Funds and other than
expenses which one or more dealers may bear pursuant to any agreement with the
Underwriter) incident to the sale and distribution of the shares issued or sold
hereunder including (a) expenses of printing copies of the Prospectus to be used
in connection with the sale of shares of each class of each Fund at printer's
overrun costs; (b) expenses of printing and distributing or disseminating any
other literature, advertising or selling aids in connection with the offering of
shares of each class for sale (however, the expenses referred to in (a) and (b)
do not include expenses incurred in connection with the preparation, printing
and distribution of the Prospectus or any report or other communication to
shareholders, to the extent that such expenses are necessarily incurred to
effect compliance by each Fund with any federal or state law or other regulatory
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bodies); and (c) expenses of advertising in connection with such offering;
provided, however, that the Underwriter shall not be required to pay for any
such expenses to the extent that they are paid pursuant to a Fund's distribution
plan adopted pursuant to Rule 12b-1 under the 0000 Xxx.
9. Each Fund agrees to register, from time to time as necessary, additional
shares of beneficial interest of each class with the SEC, state and other
regulatory bodies and to pay the related filing fees therefor and to file such
amendments, reports and other documents as may be necessary in order that there
may be no untrue statement of a material fact in the Registration Statement (as
hereinafter defined) or Prospectus or that their may be no omission to state a
material fact therein necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. As used
in this Agreement, the term "Registration Statement" shall mean the Registration
Statement most recently filed by the Trust with the SEC and effective under the
Securities Act of 1933, as amended, as such Registration Statement is amended
from time to time, and the term "Prospectus" shall mean the most recent form of
prospectus authorized by the Trust for use by the Underwriter and by dealers.
10. This Agreement may be terminated at any time on not more than 60 days'
written notice, without payment of a penalty, by the Underwriter, by vote of a
majority of the class of outstanding voting securities, as that term is defined
in the 1940 Act, of each respective Fund or by vote of a majority of the
Trustees, acting separately on behalf of each Fund, who are not "interested
persons" of the Funds and who have no direct or indirect financial interest in
the operation of the Plan or in any agreements.
11. This Agreement shall terminate automatically in the event of its
Assignment (as hereinafter defined). The term "Assignment" for this purpose
shall have the meaning defined in Section 2(a)(4) of the 1940 Act. With regards
to Class T shares, this Agreement shall also terminate automatically when Class
T shares no longer exist.
12. This Agreement has been approved by the Trustees of the Trust on behalf
of the Funds and shall continue in effect for two years from its effective date.
Thereafter, this Agreement shall continue for successive annual periods,
provided that such continuance is specifically approved annually by a majority
of the Trustees who are not interested persons of the parties hereto as defined
in the 1940 Act and either (a) by vote of the Trustees of the Trust or (b) by
vote of a majority of the outstanding voting securities of each Fund, as defined
in the 1940 Act.
13. The Declaration, establishing the Trust, a copy of which together with
all amendments thereto is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust refers to the
Trustees under the Declaration collectively as trustees, but not individually or
personally; and no Trustee, shareholder officer, employee or agent of the Trust
and/or the Funds may be held to any personal liability, nor may resort be had to
their private property for the satisfaction of any obligation or claim or
otherwise in connection with affairs of the Trust, but the Trust property only
shall be liable.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized and to become effective as
of the day and year set forth above.
PILGRIM MAYFLOWER TRUST
By:
----------------------------------
Senior Vice President
ING PILGRIM SECURITIES, INC.
By:
----------------------------------
Senior Executive Vice President
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(a) SCHEDULE 1
NAME OF FUND LAST CONTINUED BY BOARD RE-APPROVAL DAY
------------ ----------------------- -----------------
Pilgrim Growth + Value Fund June 13, 2000 September 1, 2002
Pilgrim International Value Fund June 13, 2000 September 1, 2000
Pilgrim Research Enhanced Index Fund June 13, 2000 September 1, 2002
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SCHEDULE A
to Underwriting Agreement
ALLOCATION SCHEDULE
Defined terms used in this Schedule and not otherwise defined herein shall
have the meaning assigned to them in the Underwriting Agreement of the Trust, on
behalf of the Fund(s), and the Underwriter as of September 1, 2000 to which this
Schedule A is attached (the "Underwriting Agreement"). As used herein the
following terms shall have the meanings indicated:
CDSCs or Asset Based Sales Charges related to Class B Shares ("Shares") of
the Fund shall be allocated by the Fund among the Underwriter and any successor
principal distributor of Shares of such Fund (the "Successor Underwriter") in
accordance with this Schedule A.
"COMMISSION SHARE" means in respect of any Fund, each Share of such Fund,
which is issued under circumstances which would normally give rise to an
obligation of the holder of such Share to pay a CDSC upon redemption of such
Share (including, without limitation, any Share of such Fund issued in
connection with a Permitted Free Exchange) and any such Share shall continue to
be a Commission Share of such Fund prior to the redemption (including a
redemption in connection with a Permitted Free Exchange) or conversion of such
Share, even though the obligation to pay the CDSC may have expired or conditions
for waivers thereof may exist.
"DATE OF ORIGINAL ISSUANCE" means in respect of any Commission Share, the
date with reference to which the amount of the CDSC payable on redemption
thereof, if any, is computed.
"FREE SHARE" means, in respect of any Fund, each Share of such Fund, other
than a Commission Share (including, without limitation, any Share issued in
connection with the reinvestment of dividends or capital gains).
"INCEPTION DATE" means in respect of any Fund, the first date on which such
Fund issued Shares.
"NET ASSET VALUE" means, (i) with respect to any Fund, as of the date any
determination thereof is made, the net asset value of such Fund computed in the
manner such value is required to be computed by such Fund in its reports to its
shareholders, and (ii) with respect to any share of such Fund as of any date,
the quotient obtained by dividing: (A) the net asset value of such Fund (as
computed in accordance with clause (i) above) allocated to Shares of such Fund
(in accordance with the constituent documents for such Fund) as of such date, by
(B) the number of Shares of such Fund outstanding on such date.
PART I: ATTRIBUTION OF SHARES
Shares of each Fund, which are outstanding from time to time, shall be
attributed to the Underwriter and each Successor Underwriter in accordance with
the following rules;
14. COMMISSION SHARES:
(a) Commission Shares attributed to the Underwriter shall be Commission
Shares the Date of Original issuance of which occurred on or after the Inception
Date of such Fund and on or prior to the last date on which the Underwriter
acted as principal underwriter of Shares of such Fund.
(b) Commission Shares attributable to any Successor Underwriter shall be
Commission Shares, the Date of Original Issuance of which occurs after the last
date on which the immediately preceding principal underwriter of Shares of such
Fund acted as principal underwriter of Shares of such Fund and prior to the last
date on which the Successor Underwriter in question acted as principal
underwriter of Shares of such Fund.
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(c) A Commission Share of a particular Fund (the "Issuing Fund") issued in
consideration of the investment of proceeds of the redemption of a Commission
Share of another Fund (the "Redeeming Fund") in connection with a Permitted Free
Exchange, is deemed to have a Date of Original issuance identical to the Date of
Original Issuance of the Commission Share of the Redeeming Fund and any such
Commission Share will be attributed to the Underwriter or any Successor
Underwriter based upon such Date of Original Issuance in accordance with rules
(a) and (b) above.
(d) A Commission Share redeemed (other than in connection with a Permitted
Free Exchange) or converted to a class A share is attributable to the
Underwriter or any Successor Underwriter based upon the Date of Original
Issuance in accordance with rule (a), (b) and (c) above.
15. FREE SHARES:
Free shares of a Fund outstanding on any date shall be attributed to the
Underwriter or any Successor Underwriter, as the case may be, in the same
proportion that the Commission Shares of such Fund outstanding on such date are
attributed to it on such date; provided that if the Transfer Agent is able to
produce monthly reports which track the Date of original Issuance for the
Commission Shares related to such Free Shares, then the Free Shares shall be
allocated pursuant to clause 1(a), (b) and (c) above.
PART II: ALLOCATION OF CDSCS ("CDSCS")
CDSCs Related to the Redemption of Commission Shares:
CDSCs in respect of the redemption of Commission Shares shall be allocated
to the Underwriter or any Successor Underwriter depending upon whether the
related redeemed Commission Share is attributable to such Underwriter or
Successor Underwriter, as the case may be, in accordance with Part I above.
PART III: ALLOCATION OF ASSET BASED SALES CHARGES
Assuming that the Asset Based Sales Charge remains constant over time and
among Funds so that Part IV hereof does not become operative:
1. The portion of the aggregate Asset Based Sales Charges accrued in
respect of all Shares of all Funds during any calendar month allocable to the
Underwriter or any Successor Underwriter is determined by multiplying the total
of such Asset Based Sales Charges by the following fraction:
(A + C) /2
----------
(B + D) /2
where: A = The aggregate Net Asset Value of all Shares of all Funds attributed
to such Underwriter or Successor Underwriter, as the case may be,
and outstanding at the beginning of such calendar month
B = The aggregate Net Asset Value of all Shares of all Funds at the
beginning of such calendar month
C = The aggregate Net Asset Value of all Shares of all Funds attributed
to such Underwriter or Successor Underwriter, as the case may be,
and outstanding at the end of such calendar month
D = The aggregate Net Asset Value of all Shares of all Funds at the end
of such calendar month
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2. If the Program Administrator reasonably determines that the Transfer
Agent is able to produce automated monthly reports which allocate the average
Net Asset Value of the Commission Shares (or all Shares if available) of all
Funds among the Underwriter and any Successor Underwriter in a manner consistent
with the methodology detailed in Part I and Part III (l) above, the portion of
the Asset Based Sales Charges accrued in respect of all such Shares of all Funds
during a particular calendar month will be allocated to such Underwriter or
Successor Underwriter by multiplying the total of such Asset Based Sales Charges
by the following fraction:
(A) / (B)
where: A = Average Net Asset Value of all such Shares of all Funds for such
calendar month attributed to such Underwriter or Successor
Underwriter, as the case may be
B = Total average Net Asset Value of all such Shares of all Funds for
such calendar month
PART IV: ADJUSTMENT OF THE UNDERWRITER'S OR SUCCESSOR UNDERWRITER'S SHARE OF
ASSET BASED SALES CHARGES AND CDSCS
The Parties to the Underwriting Agreement recognize that, if the terms of
the Underwriting Agreement, any Distribution Plan, any Prospectus, the Conduct
Rules or any other Applicable Law change, which change disproportionately
reduces, in a manner inconsistent with the intent of the Underwriting Agreement
and this Schedule A, the amount of the Underwriter's or the Successor
Underwriter's share of Asset Based Sales Charges and CDSCs that would have been
payable had no such change occurred, this Allocation Schedule should be adjusted
by agreement among the Fund, the Underwriter and each Successor Underwriter to
conform with such intent taking into account such change; provided, however, if
the Fund, the Underwriter and the Successor Underwriters cannot agree within
thirty (30) days after the date of any such change in Applicable Laws or in any
Underwriting Agreement, Distribution Plan, Prospectus or the Conduct Rules, the
Parties shall submit the question to arbitration in accordance with the
commercial arbitration rules of the American Arbitration Association and the
decision reached by the arbitrator shall be final and binding on the Parties
hereto.
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