THE AMERICAN FUNDS TAX-EXEMPT SERIES II AMENDED AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT
THE
AMERICAN FUNDS TAX-EXEMPT SERIES II
AMENDED
AND RESTATED PRINCIPAL UNDERWRITING AGREEMENT
THIS AMENDED AND
RESTATED PRINCIPAL UNDERWRITING AGREEMENT, is between THE AMERICAN FUNDS
TAX-EXEMPT SERIES II (the “Trust”), a Massachusetts business trust which has a
single series, The Tax-Exempt Fund of California (the "Fund"), and AMERICAN
FUNDS DISTRIBUTORS, INC., a California corporation (the
"Distributor").
W I T N E S S E T
H:
WHEREAS, the Fund
is registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end diversified investment company which offers six classes of
shares of beneficial interest, designated as Class A shares, Class B shares,
Class C shares, Class F-1 shares, Class F-2 shares, and Class R-5 shares, and it
is a part of the business of the Fund, and affirmatively in the interest of the
Fund, to offer shares of the Fund either from time to time or continuously as
determined by the Trust's officers subject to
authorization by its Board of Trustees; and
WHEREAS, the
Distributor is engaged in the business of promoting the distribution of shares
of investment companies through securities broker-dealers; and
WHEREAS, the Trust
and the Distributor wish to enter into an agreement with each other to promote
the distribution of the shares of the Fund and of all series or classes of the
Fund which may be established in the future;
NOW, THEREFORE, the
parties agree as follows:
1. (a) The
Distributor shall be the exclusive principal underwriter for the sale of the
shares of the Fund and of each series or class of the Fund which may be
established in the future, except as otherwise provided pursuant to the
following subsection (b). The terms "shares of the Fund" or "shares"
as used herein shall mean shares of beneficial interest of the Fund and each
series or class which may be established in the future and become covered by
this Agreement in accordance with Section 26 of this Agreement.
(b) The
Fund may, upon 60 days written notice to the Distributor, from time to time
designate other principal underwriters of its shares with respect to areas other
than the North American continent, Hawaii, Puerto Rico, and such countries or
other jurisdictions as to which the Fund may have expressly waived in writing
its right to make such designation. In the event of such designation,
the right of the Distributor under this Agreement to sell shares in the areas so
designated shall terminate, but this Agreement shall remain otherwise in full
force and effect until terminated in accordance with the other provisions
hereof.
2. In
the sale of shares of the Fund, the Distributor shall act as agent of the Fund
except in any transaction in which the Distributor sells such shares as a dealer
to the public, in which event the Distributor shall act as principal for its own
account.
3. The
Fund shall sell shares only through the Distributor, except that the Fund may,
to the extent permitted by the 1940 Act and the rules and regulations
promulgated thereunder or pursuant thereto, at any time:
(a) issue
shares to any corporation, association, trust, partnership or other
organization, or its, or their, security holders, beneficiaries or members, in
connection with a merger, consolidation or reorganization to which the Fund is a
party, or in connection with the acquisition of all or substantially all the
property and assets of such corporation, association, trust, partnership or
other organization;
(b) issue
shares at net asset value to the holders of shares of capital stock or
beneficial interest of other investment companies served as investment adviser
by any affiliated company or companies of The Capital Group Companies, Inc., to
the extent of all or any portion of amounts received by such shareholders upon
redemption or repurchase of their shares by the other investment
companies;
(c) issue
shares at net asset value to its shareholders in connection with the
reinvestment of dividends paid and other distributions made by the
Fund;
(d) issue
shares at net asset value to persons entitled to purchase shares at net asset
value without sales charge or contingent deferred sales charge as described in
the Fund's current Registration Statement in effect under the
Securities Act of 1933, as amended, for each series issued by the Fund at the
time of such offer or sale.
4. The
Distributor shall devote its best efforts to the sale of shares of the Fund and
shares of any other mutual funds served as investment adviser by affiliated
companies of The Capital Group Companies, Inc., and insurance contracts funded
by shares of such mutual funds, for which the Distributor has been authorized to
act as principal underwriter for the sale of shares. The Distributor
shall maintain a sales organization suited to the sale of shares of the Fund and
shall use its best efforts to effect such sales in jurisdictions as to which the
Fund shall have expressly waived in writing its right to designate another
principal underwriter pursuant to subsection 1(b) hereof, and shall effect and
maintain appropriate qualification to do so in all those jurisdictions in which
it sells or offers shares for sale and in which qualification is
required.
5. Within
the United States of America, all dealers to whom the Distributor shall offer
and sell shares must be duly licensed and qualified to sell shares of the
Fund. Shares sold to dealers shall be for resale by such dealers only
at the public offering price set forth in the current Prospectus of the Fund's
Registration Statement in effect under the Securities Act of 1933, as amended
("Prospectus"). The Distributor shall not, without the consent of the
Fund, sell or offer for sale any shares of a series or class issued by the Fund
other than as principal underwriter pursuant to this Agreement.
6. In
its sales to dealers, it shall be the responsibility of the Distributor to
insure that such dealers are appropriately qualified to transact business in the
shares under applicable laws, rules and regulations promulgated by such
national, state, local or other governmental or quasi-governmental authorities
as may in a particular instance have jurisdiction.
7. The
applicable public offering price of shares shall be the price which is equal to
the net asset value per share, as shall be determined by the Fund in the manner
and at the time or times set forth in and subject to the provisions of the
Prospectus of the Fund.
8. All
orders for shares received by the Distributor shall, unless rejected by the
Distributor or the Fund, be accepted by the Distributor immediately upon receipt
and confirmed at an offering price determined in accordance with the provisions
of the Prospectus and the 1940 Act, and applicable rules in effect
thereunder. The Distributor shall not hold orders subject to
acceptance nor otherwise delay their execution. The provisions of
this Section shall not be construed to restrict the right of the Fund to
withhold shares from sale under Section 21 hereof.
9. The
Fund or its transfer agent shall be promptly advised of all orders received, and
shall cause shares to be issued upon payment therefor in New York or Los Angeles
Clearing House Funds.
10. The
Distributor shall adopt and follow procedures as approved by the officers of the
Trust for the confirmation of sales to dealers, the collection of amounts
payable by dealers on such sales, and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the
Securities and Exchange Commission or the Financial Industry Regulatory
Authority ("FINRA" or "NASD"), as such requirements may from time to time
exist.
11. The
Distributor, as principal underwriter under this Agreement for Class A shares,
shall receive (i) that part of the sales charge which is retained by the
Distributor after allowance of discounts to dealers, unless waived by the
Distributor for certain qualified fee-based programs, as set forth in the
Prospectus of the Fund, and (ii) amounts payable to the Distributor
pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act
relating to its Class A shares.
12. The
Distributor, as principal underwriter under this agreement for Class B shares
shall receive (i) distribution fees as commissions for the sale of Class B
shares and contingent deferred sales charges ("CDSC") (as defined below), as set
forth in the Fund's Prospectus, and (ii) shareholder service fees at the
rate of 0.25% per annum of the average net asset value of Class B shares
pursuant to the Fund's Plan of Distribution under Rule 12b-1 under the 1940 Act
relating to its Class B shares (the "Class B Plan").
(a) In
accordance with the Class B Plan, and subject to the limit on asset-based sales
charges set forth in NASD Conduct Rule 2830 (and any successor provision
thereto), the Fund shall pay to the Distributor or, at the Distributor's
direction, to a third-party, monthly in arrears on or prior to the 10th
business day of the following calendar month, the Distributor's Allocable
Portion (as defined below) of a fee (the "Distribution Fee") which shall accrue
daily in an amount equal to the product of (A) the daily equivalent of 0.75% per
annum multiplied by (B) the net asset value of the Class B shares of the Fund
outstanding on such day. The Fund agrees to withhold from redemption proceeds of
the Class B shares, the Distributor's Allocable Portion of any CDSCs
payable with respect to the Class B shares, as provided in the Fund's
Prospectus, and to pay the same over to the Distributor or, at the Distributor's
direction to a third-party, at the time the redemption proceeds are payable to
the holder of such shares redeemed. Payment of these CDSC amounts to
the Distributor is not contingent upon the adoption or continuation of any Class
B Plan.
(b) For
purposes of this Agreement, the term "Allocable Portion" of Distribution Fees
and CDSCs payable with respect to Class B shares shall mean the portion of such
Distribution Fees and CDSC allocated to the Distributor in accordance with the
Allocation Schedule attached hereto as Schedule A.
(c) The
Distributor shall be considered to have completely earned the right to the
payment of its Allocable Portion of the Distribution Fees and the right to
payment of its Allocable Portion of the CDSCs with respect to each "Commission
Share" (as defined in the Allocation Schedule attached hereto as Schedule A)
upon the settlement date of such Commission Share taken into account in
determining the Distributor's Allocable Portion of Distribution
Fees.
(d) The
provisions set forth in Section 1 of the Class B Plan (in effect on the date
hereof) relating to Class B shares, together with the related definitions are
hereby incorporated into this Section 12 by reference with the same force and
effect as if set forth herein in their entirety.
13. The
Distributor, as principal underwriter under this agreement for Class C shares
shall receive (i) distribution fees as commissions for the sale of Class C
shares and CDSCs, as set forth in the Fund's Prospectus, and (ii) shareholder
service fees at the rate of 0.25% per annum of the average net asset value of
Class C shares pursuant to the Fund's Plan of Distribution under Rule 12b-1
under the 1940 Act relating to its Class C shares (the "Class C
Plan").
(a) In
accordance with the Class C Plan, and subject to the limit on asset-based sales
charges set forth in NASD Conduct Rule 2830 (and any successor provision
thereto), the Fund shall pay to the Distributor, no more frequently than monthly
in arrears within 30 days of receipt of an invoice for payment, the
Distributor's Allocable Portion (as defined below) of a fee (the "Distribution
Fee") which shall accrue daily in an amount equal to the daily equivalent of
0.75% per annum of the net asset value of the Class C shares outstanding on such
day. The Fund agrees to withhold from redemption proceeds of the
Class C shares, the Distributor's Allocable Portion of any CDSCs payable with
respect to the Class C shares, as provided in the Fund's Prospectus and to pay
the same over to the Distributor, or, at the Distributor's direction to a third
party, at the time the redemption proceeds are payable to the holder of such
shares redeemed. Payment of these CDSC amounts to the Distributor is
not contingent upon the adoption or continuation of any Class C
Plan.
(b) For
purposes of this Agreement, the term "Allocable Portion" of Distribution Fees
and CDSCs payable with respect to Class C shares shall mean the portion of such
Distribution Fees and CDSC allocated to the Distributor in accordance with the
Allocation Schedule attached hereto as Schedule B.
(c) The
Distributor shall be considered to have completely earned the right to the
payment of its Allocable Portion of the Distribution Fees and the right to
payment of its Allocable Portion of the CDSCs with respect to each "Commission
Share" (as defined in the Allocation Schedule attached hereto as Schedule B)
upon the settlement date of such Commission Share taken into account in
determining the Distributor's Allocable Portion of Distribution
Fees.
(d) The
provisions set forth in Section 1 of the Class C Plan (in effect on the date
hereof) relating to Class C shares, together with the related definitions are
hereby incorporated into this Section 13 by reference with the same force and
effect as if set forth herein in their entirety.
14. The
Distributor, as principal underwriter under this agreement for Class F-1 shares,
shall receive shareholder service fees at the rate of 0.25% per annum of the
average net asset value of Class F-1 shares pursuant to the Fund's Plan of
Distribution under Rule 12b-1 under the 1940 Act relating to its Class F-1
shares (the "Class F-1 Plan").
15. The Distributor, as
principal underwriter under this Agreement for Class F-2 shares, shall receive
no compensation.
16. The
Distributor, as principal underwriter under this agreement for the Class R-5
shares shall receive no compensation for the sale of Class R-5
shares.
17. The
Fund agrees to use its best efforts to maintain its registration as a
diversified open-end management investment company under the ▇▇▇▇
▇▇▇.
18. The
Fund agrees to use its best efforts to maintain an effective Prospectus under
the Securities Act of 1933, as amended, and warrants that such Prospectus will
contain all statements required by and will conform with the requirements of
such Securities Act of 1933 and the rules and regulations thereunder, and that
no part of any such Prospectus, at the time the Registration Statement of which
it is a part becomes effective, will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading (excluding any
information provided by the Distributor in writing for inclusion in the
Prospectus). The Distributor agrees and warrants that it will not in
the sale of shares use any Prospectus, advertising or sales literature not
approved by the Fund or its officers nor make any untrue statement of a material
fact nor omit the stating of a material fact necessary in order to make the
statements made, in the light of the circumstances under which they are made,
not misleading. The Distributor agrees to indemnify and hold the Fund
harmless from any and all loss, expense, damage and liability resulting from a
breach of the agreements and warranties contained in this Section, or from the
use of any sales literature, information, statistics or other aid or device
employed in connection with the sale of shares.
19. The
expense of each printing of each Prospectus and each revision thereof or
addition thereto deemed necessary by the Fund's officers to meet the
requirements of applicable laws shall be divided between the Fund, the
Distributor and any other principal underwriter of the shares of the Fund as
follows:
(a) the
Fund shall pay the typesetting and make-ready charges;
(b) the
printing charges shall be prorated between the Fund, the Distributor, and any
other principal underwriter(s) in accordance with the number of copies each
receives; and
(c) expenses
incurred in connection with the foregoing, other than to meet the requirements
of the Securities Act of 1933, as amended, or other applicable laws, shall be
borne by the Distributor, except in the event such incremental expenses are
incurred at the request of any other principal underwriter(s), in which case
such incremental expenses shall be borne by the principal underwriter(s) making
the request.
20. The Fund
agrees to use its best efforts to qualify and maintain the qualification of an
appropriate number of the shares of each series or class it offers for sale
under the securities laws of such states as the Distributor and the Fund may
approve. Any such qualification for any series or class may be
withheld, terminated or withdrawn by the Fund at any time in its
discretion. The expense of qualification and maintenance of
qualification shall be borne by the Fund, but the Distributor shall furnish such
information and other material relating to its affairs and activities as may be
required by the Fund or its counsel in connection with such
qualifications.
21. The Fund
may withhold shares of any series or class from sale to any person or persons or
in any jurisdiction temporarily or permanently if, in the opinion of its
counsel, such offer or sale would be contrary to law or if the Trustees or the
President or any Vice President of the Fund determines that such offer or sale
is not in the best interest of the Fund. The Fund will give prompt
notice to the Distributor of any withholding and will indemnify it against any
loss suffered by the Distributor as a result of such withholding by reason of
non-delivery of shares of any series or class after a good faith confirmation by
the Distributor of sales thereof prior to receipt of notice of such
withholding.
22. (a) This
Agreement may be terminated at any time, without payment of any penalty, as to
the Fund or any series on sixty (60) days written notice by the Distributor to
the Fund.
(b) This
Agreement may be terminated as to the Fund or any series or class by either
party upon five (5) days written notice to the other party in the event that the
Securities and Exchange Commission has issued an order or obtained an injunction
or other court order suspending effectiveness of the Registration Statement
covering the shares of the Fund or such series or class.
(c) This
Agreement may be terminated as to the Fund or any series or class by the Fund
upon five (5) days written notice to the Distributor provided either of the
following events has occurred:
(i) FINRA
has expelled the Distributor or suspended its membership in that organization;
or
(ii) the
qualification, registration, license or right of the Distributor to sell shares
of any series in a particular state has been suspended or canceled by the State
of California or any other state in which sales of the shares of the Fund or
such series during the most recent 12-month period exceeded 10% of all shares of
such series sold by the Distributor during such period.
(d) This
Agreement may be terminated as to the Fund or any series or class at any time on
sixty (60) days written notice to the Distributor without the payment of any
penalty, by vote of a majority of the Independent Trustees or by vote of a
majority of the outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇) of
the Fund or such series or class.
23. This
Agreement shall not be assignable by either party hereto and in the event of
assignment shall automatically terminate forthwith. The term
"assignment" shall have the meaning set forth in the 1940 Act. Notwithstanding
this Section, this Agreement, with respect to the Fund's Class B shares, has
been approved in accordance with Section 26 in anticipation of the Distributor's
transfer of its Allocable Portion of Distribution Fees and CDSCs (but not its
obligations under this Agreement) to a third-party pursuant to a "Purchase and
Sale Agreement" in order to raise funds to cover distribution expenditures, and
such transfer will not cause a termination of this Agreement. If Distributor
determines to transfer its Allocable Portion of Distribution Fees and CDSCs in
respect of Class C shares to a third party, such transfer shall not cause a
termination of this Agreement.
24. No
provision of this Agreement shall protect or purport to protect the Distributor
against any liability to the Trust or holders of its shares for which the
Distributor would otherwise be liable by reason of willful misfeasance, bad
faith, or gross negligence.
25. This
Agreement shall become effective on July 30, 2008. Unless sooner terminated in
accordance with the other provisions hereof, this Agreement shall continue in
effect until May 31, 2009, and shall continue in effect from year to year
thereafter but only so long as such continuance is specifically approved at
least annually by (i) the vote of a majority of the Independent Trustees of the
Trust cast in person at a meeting called for the purpose of voting on such
approval, and (ii) the vote of either a majority of the entire Board of Trustees
of the Trust or a majority (within the meaning of the ▇▇▇▇ ▇▇▇) of the
outstanding voting securities of the Fund.
26. If
the Trust shall at any time issue shares in more than one series or class, this
Agreement shall take effect with respect to such series or class of the Trust
which may be established in the future at such time as it has been approved as
to such series or class by vote of the Board of Trustees and the Independent
Trustees in accordance with Section 25. The Agreement as approved
with respect to any series or class shall specify the compensation payable to
the Distributor pursuant to Sections 11 through 16, as well as any provisions
which may differ from those herein with respect to such series, subject to
approval in writing by the Distributor.
This Agreement may
be approved, amended, continued or renewed with respect to a series or class as
provided herein notwithstanding such approval, amendment, continuance or renewal
has not been effected with respect to any one or more other series or class of
the Trust.
This Agreement
shall be construed under and shall be governed by the laws of the State of
California, and the parties hereto agree that proper venue of any action with
respect hereto shall be Los Angeles County, California.
IN WITNESS WHEREOF,
the parties hereto have caused this instrument to be executed in duplicate
original by their officers thereunto duly authorized, as of June 16,
2008.
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AMERICAN
FUNDS DISTRIBUTORS, INC.
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THE AMERICAN
FUNDS TAX-EXEMPT SERIES II
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By:
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By:
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▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇
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President
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President
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By
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By
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▇▇▇▇▇ ▇.
▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
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Secretary
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Secretary
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SCHEDULE
A
to the
Amended and
Restated Principal Underwriting Agreement
ALLOCATION
SCHEDULE
The following
relates solely to Class B shares.
The Distributor's
Allocable Portion of Distribution Fees and CDSCs in respect of Class B shares
shall be 100% until such time as the Distributor shall cease to serve as
exclusive distributor of Class B shares; thereafter, collections that constitute
CDSCs and Distribution Fees relating to Class B shares shall be allocated among
the Distributor and any successor distributor ("Successor
Distributor") in accordance with this Schedule.
Defined terms used
in this Schedule and not otherwise defined herein shall have the meanings
assigned to them in the Amended and Restated Principal Underwriting Agreement
(the "Distribution Agreement"), of which this Schedule is a part. As
used herein the following terms shall have the meanings indicated:
"Commission Share"
means each B share 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 B share issued in connection with a
permitted free exchange), and any such share shall continue to be a Commission
Share of the applicable 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 a Fund, each B share of the Fund, other than a Commission Share
(including, without limitation, any B share issued in connection with the
reinvestment of dividends or capital gains).
"Inception Date" means
in respect of a Fund, the first date on which the Fund issued
shares.
"Net Asset Value"
means the net asset value determined as set forth in the Prospectus of each
Fund.
"Omnibus Share" means,
in respect of a Fund, a Commission Share or Free Share sold by one of the
selling agents maintaining shares in an omnibus account. If,
subsequent to the Successor Distributor becoming exclusive distributor of the
Class B shares, the Distributor reasonably determines that the transfer agent is
able to track all Commission Shares and Free Shares sold by any of the selling
agents listed on Exhibit I in the same manner as Commission Shares and Free
Shares are currently tracked in respect of selling agents not listed on Exhibit
I, then Exhibit I shall be amended to delete such selling agent from Exhibit I
so that Commission Shares and Free Shares sold by such selling agent will no
longer be treated as Omnibus Shares.
PART I: ATTRIBUTION OF CLASS
B SHARES
Class B shares that
are outstanding from time to time, shall be attributed to the Distributor and
each Successor Distributor in accordance with the following rules;
(1) Commission Shares other than
Omnibus Shares:
(a) Commission
Shares that are not Omnibus Shares ("Non-Omnibus Commission Shares") attributed
to the Distributor shall be those Non-Omnibus Commission Shares the Date of
Original Issuance of which occurred on or after the Inception Date of the
applicable Fund and on or prior to the date the Distributor ceased to be
exclusive distributor of Class B shares of the Fund.
(b) Non-Omnibus
Commission Shares attributable to each Successor Distributor shall be those
Non-Omnibus Commission Shares the Date of Original Issuance of which occurs
after the date such Successor Distributor became the exclusive distributor of
Class B shares of the Fund and on or prior to the date such Successor
Distributor ceased to be the exclusive distributor of Class B shares of the
Fund.
(c) A
Non-Omnibus Commission Share of a Fund issued in consideration of the investment
of proceeds of the redemption of a Non-Omnibus 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
Non-Omnibus Commission Share of the Redeeming Fund, and any such Commission
Share will be attributed to the Distributor or Successor Distributor based upon
such Date of Original Issuance in accordance with rules (a) and (b)
above.
(2) Free
Shares:
Free Shares that
are not Omnibus Shares ("Non-Omnibus Free Shares") of a Fund outstanding on any
date shall be attributed to the Distributor or a Successor Distributor, as the
case may be, in the same proportion that the Non-Omnibus Commission Shares of a
Fund outstanding on such date are attributed to each on such date; provided that if the
Distributor and its transferees reasonably determines that the transfer agent is
able to produce monthly reports that track the Date of Original Issuance for
such Non-Omnibus Free Shares, then such Free Shares shall be allocated pursuant
to clause 1(a), (b) and (c) above.
(3) Omnibus
Shares:
Omnibus Shares of a
Fund outstanding on any date shall be attributed to the Distributor or a
Successor Distributor, as the case may be, in the same proportion that the
Non-Omnibus Commission Shares of the applicable Fund outstanding on such date
are attributed to it on such date; provided that if the
Distributor reasonably determines that the transfer agent is able to produce
monthly reports that track the Date of Original Issuance for the Omnibus Shares,
then the Omnibus Shares shall be allocated pursuant to clause 1(a), (b) and (c)
above.
PART II: ALLOCATION OF
CDSCs
(1) CDSCs Related to the
Redemption of Non-Omnibus Commission Shares:
CDSCs in respect of
the redemption of Non-Omnibus Commission Shares shall be allocated to the
Distributor or a Successor Distributor depending upon whether the related
redeemed Commission Share is attributable to the Distributor or such Successor
Distributor, as the case may be, in accordance with Part I above.
(2) CDSCs Related to the
Redemption of Omnibus Shares:
CDSCs in respect of
the redemption of Omnibus Shares shall be allocated to
the Distributor or a Successor Distributor in the same proportion
that CDSCs related to the redemption of Non-Omnibus Commission Shares are
allocated to each thereof; provided, that if the
Distributor reasonably determines that the transfer agent is able to produce
monthly reports which track the Date of Original Issuance for the Omnibus
Shares, then the CDSCs in respect of the redemption of Omnibus Shares shall be
allocated among the Distributor and any Successor Distributor depending on
whether the related redeemed Omnibus Share is attributable to the Distributor or
a Successor Distributor, as the case may be, in accordance with Part I
above.
PART III: ALLOCATION OF
DISTRIBUTION FEE
Assuming that the
Distribution Fee remains constant over time so that Part IV hereof does not
become operative:
(1) The
portion of the aggregate Distribution Fee accrued in respect of all Class B
shares of a Fund during any calendar month allocable to the Distributor or a
Successor Distributor is determined by multiplying the total of such
Distribution Fee by the following fraction:
(A +
C)/2
(B
+ D)/2
where:
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A=
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The aggregate
Net Asset Value of all Class B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and
outstanding at the beginning of such calendar
month
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B=
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The aggregate
Net Asset Value of all Class B shares of a Fund at the beginning of such
calendar month
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C=
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The aggregate
Net Asset Value of all Class B shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and
outstanding at the end of such calendar
month
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D=
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The aggregate
Net Asset Value of all Class B shares of a Fund at the end of such
calendar month
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(2) If
the Distributor reasonably determines that the transfer agent is able to produce
automated monthly reports that allocate the average Net Asset Value of the
Commission Shares (or all Class B shares if available) of a Fund among the
Distributor and any Successor Distributor in a manner consistent with the
methodology detailed in Part I and Part III(1) above, the portion of the
Distribution Fee accrued in respect of all such Class B shares of a Fund during
a particular calendar month will be allocated to the Distributor or a Successor
Distributor by multiplying the total of such Distribution Fee by the following
fraction:
(A)/(B)
where:
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A=
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Average Net
Asset Value of all such Class B shares of a Fund for such calendar month
attributed to the Distributor or a Successor Distributor, as the case may
be
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B=
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Total average
Net Asset Value of all such Class B shares of a Fund for such calendar
month
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PART IV: ADJUSTMENT OF THE
DISTRIBUTOR'S ALLOCABLE PORTION AND EACH SUCCESSOR DISTRIBUTOR'S ALLOCABLE
PORTION
The parties to the
Distribution Agreement recognize that, if the terms of any distributor's
contract, any distribution plan, any prospectus, the NASD Conduct Rules or any
other applicable law change so as to disproportionately reduce, in a manner
inconsistent with the intent of this Distribution Agreement, the amount of the
Distributor's Allocable Portion or any Successor Distributor's Allocable Portion
had no such change occurred, the definitions of the Distributor's Allocable
Portion and/or the Successor Distributor's Allocable Portion in respect of the
Class B shares relating to a Fund shall be adjusted by agreement among the
relevant parties; provided, however, if the
Distributor, the Successor Distributor and the Fund cannot agree within thirty
(30) days after the date of any such change in applicable laws or in any
distributor's contract, distribution plan, prospectus or the NASD Conduct Rules,
they 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 each of
them.
SCHEDULE
B
to the
Amended and
Restated Principal Underwriting Agreement
ALLOCATION
SCHEDULE
The following
relates solely to Class C shares.
The Distributor's
Allocable Portion of Distribution Fees and CDSCs in respect of Class C shares
shall be 100% until such time as the Distributor shall cease to serve as
exclusive distributor of Class C shares; thereafter, collections that constitute
CDSCs and Distribution Fees relating to Class C shares shall be allocated among
the Distributor and any successor distributor ("Successor
Distributor") in accordance with this Schedule. At such time as the
Distributor's Allocable Portion of the Distribution Fees equals zero, the
Successor Distributor shall become the Distributor for purposes of this
Allocation Schedule.
Defined terms used
in this Schedule and not otherwise defined herein shall have the meanings
assigned to them in the Amended and Restated Principal Underwriting Agreement
(the "Distribution Agreement"), of which this Schedule is a part. As
used herein the following terms shall have the meanings indicated:
"Commission Share"
means each C share 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 C share issued in connection with a
permitted free exchange), and any such share shall continue to be a Commission
Share of the applicable 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 a Fund, each C share of the Fund, other than a Commission Share
(including, without limitation, any C share issued in connection with the
reinvestment of dividends or capital gains).
"Inception Date" means
in respect of a Fund, the first date on which the Fund issued
shares.
"Net Asset Value"
means the net asset value determined as set forth in the Prospectus of each
Fund.
"Omnibus Share" means,
in respect of a Fund, a Commission Share or Free Share sold by one of the
selling agents maintaining shares in an omnibus account ("Omnibus Selling
Agents"). If, subsequent to the Successor Distributor becoming
exclusive distributor of the Class C shares, the Distributor reasonably
determines that the transfer agent is able to track all Commission Shares and
Free Shares sold by any of the Omnibus Selling Agents in the same manner as
Non-Omnibus Commission Shares and Free Shares (defined below) are currently
tracked, then Omnibus Shares of such Omnibus Selling Agent shall be treated as
Commission Shares and Free Shares.
PART
I: ATTRIBUTION OF CLASS C SHARES
Class C shares that
are outstanding from time to time, shall be attributed to the Distributor and
each Successor Distributor in accordance with the following rules;
(1) Commission Shares other than
Omnibus Shares:
(a) Commission
Shares that are not Omnibus Shares ("Non-Omnibus Commission Shares") attributed
to the Distributor shall be those Non-Omnibus Commission Shares (i) the Date of
Original Issuance of which occurred on or after the Inception Date of the
applicable Fund and on or prior to the date the Distributor ceased to be
exclusive distributor of Class C shares of the Fund and (ii) that are subject to
a CDSC (without regard to any conditions for waivers thereof).
(b) Non-Omnibus
Commission Shares attributable to each Successor Distributor shall be those
Non-Omnibus Commission Shares (i) the Date of Original Issuance of which occurs
after the date such Successor Distributor became the exclusive distributor of
Class C shares of the Fund and on or prior to the date such Successor
Distributor ceased to be the exclusive distributor of Class C shares of the Fund
and (ii) that are subject to a CDSC (without regard to any conditions for
waivers thereof).
(c) A
Non-Omnibus Commission Share of a Fund issued in consideration of the investment
of proceeds of the redemption of a Non-Omnibus 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
Non-Omnibus Commission Share of the Redeeming Fund, and any such Commission
Share will be attributed to the Distributor or Successor Distributor based upon
such Date of Original Issuance in accordance with rules (a) and (b)
above.
(2) Free
Shares:
Free Shares that
are not Omnibus Shares ("Non-Omnibus Free Shares") of a Fund outstanding on any
date shall be attributed to the Distributor or a Successor Distributor, as the
case may be, in the same proportion that the Non-Omnibus Commission Shares of a
Fund outstanding on such date are attributed to each on such date; provided that if the
Distributor and its transferees reasonably determines that the transfer agent is
able to produce monthly reports that track the Date of Original Issuance for
such Non-Omnibus Free Shares, then such Free Shares shall be allocated pursuant
to clause 1(a), (b) and (c) above.
(3) Omnibus
Shares:
Omnibus Shares of a
Fund outstanding on any date shall be attributed to the Distributor or a
Successor Distributor, as the case may be, in the same proportion that the
Non-Omnibus Commission Shares of the applicable Fund outstanding on such date
are attributed to it on such date; provided that if the
Distributor reasonably determines that the transfer agent is able to produce
monthly reports that track the Date of Original Issuance for the Omnibus Shares,
then the Omnibus Shares shall be allocated pursuant to clause 1(a), (b) and (c)
above.
PART
II: ALLOCATION OF CDSCs
(1) CDSCs Related to the
Redemption of Non-Omnibus Commission Shares:
CDSCs in respect of
the redemption of Non-Omnibus Commission Shares shall be allocated to the
Distributor or a Successor Distributor depending upon whether the related
redeemed Commission Share is attributable to the Distributor or such Successor
Distributor, as the case may be, in accordance with Part I above.
(2) CDSCs Related to the
Redemption of Omnibus Shares:
CDSCs in respect of
the redemption of Omnibus Shares shall be allocated to the Distributor or a
Successor Distributor in the same proportion that CDSCs related to the
redemption of Non-Omnibus Commission Shares are allocated to each thereof; provided, that if the
Distributor reasonably determines that the transfer agent is able to produce
monthly reports which track the Date of Original Issuance for the Omnibus
Shares, then the CDSCs in respect of the redemption of Omnibus Shares shall be
allocated among the Distributor and any Successor Distributor depending on
whether the related redeemed Omnibus Share is attributable to the Distributor or
a Successor Distributor, as the case may be, in accordance with Part I
above.
PART
III: ALLOCATION OF DISTRIBUTION FEE
Assuming that the
Distribution Fee remains constant over time so that Part IV hereof does not
become operative:
(1) The
portion of the aggregate Distribution Fee accrued in respect of all Class C
shares of a Fund during any calendar month allocable to the Distributor or a
Successor Distributor is determined by multiplying the total of such
Distribution Fee by the following fraction:
(A +
C)/2
(B +
D)/2
where:
|
A=
|
The aggregate
Net Asset Value of all Class C shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and
outstanding at the beginning of such calendar
month
|
|
B=
|
The aggregate
Net Asset Value of all Class C shares of a Fund at the beginning of such
calendar month
|
|
C=
|
The aggregate
Net Asset Value of all Class C shares of a Fund attributed to the
Distributor or such Successor Distributor, as the case may be, and
outstanding at the end of such calendar
month
|
|
D=
|
The aggregate
Net Asset Value of all Class C shares of a Fund at the end of such
calendar month
|
(2) If
the Distributor reasonably determines that the transfer agent is able to produce
automated monthly reports that allocate the average Net Asset Value of the
Commission Shares (or all Class C shares if available) of a Fund among the
Distributor and any Successor Distributor in a manner consistent with the
methodology detailed in Part I and Part III(1) above, the portion of the
Distribution Fee accrued in respect of all such Class C shares of a Fund during
a particular calendar month will be allocated to the Distributor or a Successor
Distributor by multiplying the total of such Distribution Fee by the following
fraction:
(A)/(B)
where:
|
A=
|
Average Net
Asset Value of all such Class C shares of a Fund for such calendar month
attributed to the Distributor or a Successor Distributor, as the case may
be
|
|
B=
|
Total average
Net Asset Value of all such Class C shares of a Fund for such calendar
month
|
PART
IV: ADJUSTMENT OF THE DISTRIBUTOR'S ALLOCABLE PORTION AND EACH
SUCCESSOR DISTRIBUTOR'S ALLOCABLE PORTION
The parties to the
Distribution Agreement recognize that, if the terms of any distributor's
contract, any distribution plan, any prospectus, the NASD Conduct Rules or any
other applicable law change so as to disproportionately reduce, in a manner
inconsistent with the intent of this Distribution Agreement, the amount of the
Distributor's Allocable Portion or any Successor Distributor's Allocable Portion
had no such change occurred, the definitions of the Distributor's Allocable
Portion and/or the Successor Distributor's Allocable Portion in respect of the
Class C shares relating to a Fund shall be adjusted by agreement among the
relevant parties; provided, however, if
the Distributor, the Successor Distributor and the Fund cannot agree within
thirty (30) days after the date of any such change in applicable laws or in any
distributor's contract, distribution plan, prospectus or the NASD Conduct Rules,
they 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 each of
them.