PIC INVESTMENT TRUST
Amended and Restated Distribution Agreement
Agreement made as of March 31, 1999, between PIC Investment Trust, a
registered investment company (the "Trust") and First Fund Distributors, Inc.
(the "Distributor").
WITNESSETH
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"), as a diversified, open-end,
management investment company and it is in the interest of the Trust to offer
its shares for sale continuously;
WHEREAS, the shares of beneficial interest of the Trust are divided into
separate series or funds (each such existing or future fund is hereinafter
referred to as a "Fund"), each of which is, or will be, established by
resolution of the Trustees of the Trust, and the Trustees may from time to time
terminate any such Fund;
WHEREAS, the Distributor is a broker-dealer registered under the Securities
Exchange Act of 1934, as amended, and a member in good standing of the National
Association of Securities Dealers, Inc. ("NASD") and is engaged in the business
of selling shares of registered investment companies either directly or through
other broker-dealers;
WHEREAS, the Trust and the Distributor wish to enter into an agreement with
each other, with respect to the continuous offering of the shares of the Trust
and each Fund thereof from and after the date hereof in order to promote the
growth of the Trust and facilitate the distribution of its shares.
NOW, THEREFORE, the parties agree as follows:
Section 1. Appointment of the Distributor
The Trust hereby appoints the Distributor as the principal underwriter and
distributor of the shares of the Trust to sell shares of each Fund to the public
and the Distributor hereby accepts such appointment and agrees to act hereunder.
The Trust hereby agrees during the term of this Agreement to sell shares of the
Trust to the Distributor on the terms and conditions set forth below.
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Section 2. Exclusive Nature of Duties
The Distributor shall be the exclusive representative of the Trust to act
as principal underwriter and distributor of the Trust's shares, except that:
2.1 The exclusive rights granted to the Distributor to purchase shares from
the Trust shall not apply to shares of the Trust issued in connection with the
merger or consolidation of any other investment company or personal holding
company with the Trust or the acquisition by purchase or otherwise of all (or
substantially all) the assets or the outstanding shares of any such company by
the Trust.
2.2 Such exclusive rights shall not apply to shares issued by the Trust
pursuant to reinvestment of dividends or capital gains distributions or through
the exercise of any conversion feature or exchange privilege.
2.3 Such exclusive rights shall not apply to shares issued by the Trust
pursuant to any reinstatement privilege afforded redeeming shareholders.
Section 3. Purchase of Shares from the Trust
3.1 The Distributor shall have the right to buy from the Trust the shares
needed, but not more than the shares needed (except for clerical errors in
transmission) to fill unconditional orders for shares placed with the
Distributor by investors or registered and qualified securities dealers and
other financial institutions ("selected dealers"). The price which the
Distributor shall pay for the shares so purchased from the Trust shall be the
net asset value, determined as set forth in the Prospectus of each Fund. The
term "Prospectus" shall mean the Prospectus and Statement of Additional
Information for each Fund included as part of the Trust's Registration
Statement, as such Prospectus and Statement of Additional Information may be
amended or supplemented from time to time, and the term "Registration Statement"
shall mean the Registration Statement filed by the Trust with the Securities and
Exchange Commission (the "Commission") and effective under the Securities Act of
1933, as amended ("Securities Act"), and the Investment Company Act, as such
Registration Statement is amended from time to time.
3.2 The shares are to be resold by the Distributor or selected dealers, as
described in Section 6.4 hereof, to investors at the offering price as set forth
in the Prospectus.
3.3 The Trust shall have the right to suspend the sale of its shares at
times when redemption is suspended pursuant to the conditions in Section 4.3
hereof or at such other times as may be determined by the Trustees. The Trust
shall also have the right to suspend the sale of its shares if a banking
moratorium shall have been declared by federal or New York authorities.
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3.4 The Trust, or any agent of the Trust designated in writing by the
Trust, shall be promptly advised of all purchase orders for shares received by
the Distributor. Any order may be rejected by the Trust; provided, however, that
the Trust will not arbitrarily or without reasonable cause refuse to accept or
confirm orders for the purchase of shares. The Trust (or its agent) will confirm
orders upon their receipt, will make appropriate book entries and upon receipt
by the Trust (or its agent) of payment therefor, will deliver deposit receipts
for such shares pursuant to the instructions of the Distributor. Payment shall
be made to the Trust in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be delivered
promptly to the Trust (or its agent).
Section 4. Repurchase or Redemption of Shares by the Trust
4.1 Any of the outstanding shares may be tendered for redemption at any
time, and the Trust agrees to repurchase or redeem the shares so tendered in
accordance with its Declaration of Trust, as amended from time to time, and in
accordance with the applicable provisions of the Prospectus. The price to be
paid to redeem or repurchase the shares shall be equal to the net asset value
determined as set forth in the Prospectus. All payments by the Trust hereunder
shall be made in the manner set forth in Section 4.2 below.
4.2 The Trust shall pay the total amount of the redemption price as defined
in the above paragraph pursuant to the instructions of the Distributor on or
before the seventh calendar day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of shares shall be
paid by the Trust as follows: (i) in the case of shares subject to a contingent
deferred sales charge ("CDSC"), any applicable CDSC shall be paid to, for the
account of, or at the direction of, the Distributor, and the balance shall be
paid to or for the account of the redeeming shareholder, in each case in
accordance with applicable provisions of the Prospectus; and (ii) in the case of
all other shares, proceeds shall be paid to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions of the
Prospectus.
4.3 Redemption of shares or payment may be suspended at times when the New
York Stock Exchange is closed for other than customary weekends and holidays,
when trading on said Exchange is restricted, when an emergency exists as a
result of which disposal by the Trust of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust fairly
to determine the value of its net assets, or during any other period when the
Commission, by order, so permits.
Section 5. Duties of the Trust
5.1 Subject to the possible suspension of the sale of shares as provided
herein, the Trust agrees to sell its shares so long as it has shares available.
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5.2 The Trust shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of shares, and this shall
include one certified copy, upon request by the Distributor, of all financial
statements prepared for the Trust by independent public accountants. The Trust
shall make available to the Distributor such number of copies of its Prospectus
and annual and interim reports as the Distributor shall reasonably request.
5.3 The Trust shall take, from time to time, but subject to the necessary
approval of the Trustees and the shareholders, all necessary action to fix the
number of authorized shares and such steps as may be necessary to register the
same under the Securities Act, to the end that there will be available for sale
such number of shares as the Distributor reasonably may expect to sell. The
Trust agrees to file from time to time such amendments, reports and other
documents as may be necessary in order that there will be no untrue statement of
a material fact in the Registration Statement, or necessary in order that there
will be no omission to state a material fact in the Registration Statement which
omission would make the statements therein misleading.
5.4 The Trust shall use its best efforts to make such filings or shall be
required to qualify and maintain the qualification of any of its shares for sale
under the securities laws of such states as the Distributor and the Trust may
jointly agree upon; provided that the Trust shall not be required to amend its
Declaration of Trust or By-Laws to comply with the laws of any state, to
maintain an office in any state, to change the terms of the offering of its
shares in any state from the terms set forth in its Registration Statement, to
qualify as a foreign corporation in any state or to consent to service of
process in any state other than with respect to claims arising out of the
offering of its shares. Any such qualification may be withheld, terminated or
withdrawn by the Trust at any time in its discretion. As provided in Section 9
hereof, the expense of qualification and maintenance of qualification shall be
borne by the Trust. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the Trust
in connection with such qualifications.
Section 6. Duties of the Distributor
6.1 The Distributor shall devote reasonable time and effort to effect sales
of shares of the Trust, but shall not be obligated to sell any specific number
of shares. Sales of the shares shall be on the terms described in the
Prospectus. The Distributor may enter into like arrangements with other
investment companies.
6.2 In selling the shares, the Distributor shall use its best efforts in
all respects duly to conform with the requirements of all federal and state laws
relating to the sale of such securities. Neither the Distributor nor any
selected dealer nor any other person is authorized by the Trust to give any
information or to make any representations, other than those contained in the
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Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Trust.
6.3 The Distributor shall adopt and follow procedures for the confirmation
of sales to investors and selected dealers, the collection of amounts payable by
investors and selected dealers on such sales and the cancellation of unsettled
transactions, as may be necessary to comply with the requirements of the NASD.
6.4 The Distributor shall have the right to enter into selected dealer
agreements with registered and qualified securities dealers and other financial
institutions of its choice for the sale of shares, provided that the Trust shall
approve the forms of such agreements. Within the United States, the Distributor
shall offer and sell shares only to such selected dealers as are members in good
standing of the NASD. Shares sold to selected dealers shall be for resale by
such dealers only at the offering price determined as set forth in the
Prospectus.
6.5 In performance its duties hereunder, the Distributor shall be an
independent contractor and neither the Distributor, nor any of its officers,
directors, employees, or representatives is or shall be an employee of the Trust
in the performance of the Distributor's duties hereunder. The Distributor shall
be responsible for its own conduct and the employment, control, and conduct of
its agents and employees and for injury to such agents or employees or to others
through its agents or employees. The Distributor assumes full responsibility for
its agents and employees under applicable statutes and agrees to pay all
employee taxes thereunder.
Section 7. Payments to the Distributor
7.1 With respect to classes and/or series of shares which impose a
front-end sales charge, the Distributor shall receive and may retain any portion
of any front-end sales charge which is imposed on such sales and not reallocated
to selected dealers as set forth in the Prospectus, subject to the limitations
of the Conduct Rules of the NASD. Payment of these amounts to the Distributor is
not contingent upon the adoption or continuation of any Plan of Distribution
pursuant to Rule 12b-1 under the Investment Company Act ( a "Plan").
7.2 With respect to classes and/or series of shares subject to a CDSC (the
"CDSC shares"), the Distributor shall receive and may retain its Allocable
Portion (as hereinafter defined) of any CDSC which is imposed on such sales as
set forth in the Prospectus, subject to the limitations of the Conduct Rules of
the NASD. Payment of these amounts to the Distributor is not contingent upon the
adoption or continuation of any Plan.
Section 8. Payment of the Distributor Under Any Plan
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8.1 If a Fund has a Plan that provides for payments to the Distributor then
the Trust shall pay to the Distributor as compensation for services under any
Plan adopted by the Fund and this Agreement (without double counting) a
distribution fee (the "Distribution Fee") with respect to the Trust's shares as
described in each respective Fund's Plan and this Agreement.
With respect to CDSC shares, in consideration of the Distributor's
services as principal distributor of the CDSC shares pursuant to this Agreement
and each applicable Fund's Plan, the Trust agrees to pay to, for the account of,
or at the direction of, the Distributor its Allocable Portion of the
Distribution Fee which shall accrue daily at the rate of 0.75% per annum of the
average daily net assets attributable to CDSC shares of any applicable Fund, and
be payable monthly.
8.2 So long as a Plan or any amendment thereto is in effect, the
Distributor shall inform the Trustees of the commissions with respect to the
Plan to be paid by the Distributor to account executives of the Distributor and
to broker-dealers and financial institutions which have dealer agreements with
the Distributor. So long as a Plan (or any amendment thereto) is in effect, at
the request of the Trustees or any agent or representative of the Fund, the
Distributor shall provide such additional information as may reasonably be
requested concerning the activities of the Distributor hereunder and the costs
incurred in performing such activities with respect to the relevant class and/or
series of shares.
Section 9. Allocation of Expenses
9.1 The Trust shall bear all costs and expenses of the continuous offering
of its shares (except for those costs and expenses born by the Distributor or
another party pursuant to any Plan and subject to the requirements of Rule 12b-1
under the Investment Company Act), including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required Registration Statements and/or Prospectuses under the Investment
Company Act or the Securities Act, and all amendments and supplements thereto,
and preparing and mailing annual and periodic reports and proxy materials to
shareholders (including but not limited to the expense of setting in type any
such Registration Statements, Prospectuses, annual or periodic reports or proxy
materials). The Trust shall also bear the costs and expenses of qualification of
the shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Trust as a broker or dealer, in such states of the United States
or other jurisdictions as shall be selected by the Trust and the Distributor
pursuant to Section 5.4 hereof and the cost and expense payable to each such
state for continuing qualification therein until the Trust decides to
discontinue such qualification pursuant to Section 5.4 hereof. The Trust shall
also bear the expenses it assumes pursuant to any Plan, so long as the Plan is
in effect.
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Section 10. Indemnification
(a) Indemnification of Trust. The Distributor agrees to indemnify and
hold harmless the Trust and each of its present or former Trustees, officers,
employees and representatives and each person, if any, who controls or
previously controlled the Trust within the meaning of Section 15 of the
Securities Act against any and all losses, liabilities, damages, claims or
expenses (including the reasonable costs of investigating or defending any
alleged loss, liability, damage, claims or expense and reasonable legal counsel
fees incurred in connection therewith) to which the Trust or any such person may
become subject under the Securities Act, under any other statute, at common law,
or otherwise, arising out of the acquisition of any shares by any person which
(i) may be based upon any wrongful act by the Distributor or any of the
Distributor's directors, officers, employees or representatives, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement, Prospectus, shareholder report or other
information covering shares filed or made public by the Trust or any amendment
thereof or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was made in
reliance upon information furnished to the Trust by the Distributor. In no case
(i) is the Distributor's indemnity in favor of the Trust, or any person
indemnified to be deemed to protect the Trust or such indemnified person against
any liability to which the Trust or such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of his duties or by reason of his reckless disregard of his obligations and
duties under this Agreement or (ii) is the Distributor to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against the Trust or any person indemnified unless the Trust or such person, as
the case may be, shall have notified the Distributor in writing of the claim
within a reasonable time after the summons or other first written notification
giving information of the nature of the claim shall have been served upon the
Trust or upon such person (or after the Trust or such person shall have received
notice of such service on any designated agent). However, failure to notify the
Distributor of any such claim shall not relieve the Distributor from any
liability which the Distributor may have to the Trust or any person against whom
such action is brought otherwise than on account of the Distributor's indemnity
agreement contained in this paragraph.
The Distributor shall be entitled to participate, at its own expense,
in the defense, or, if the Distributor so elects, to assume the defense of any
suit brought to enforce any such claim, but, if the Distributor elects to assume
the defense, such defense shall be conducted by legal counsel chosen by the
Distributor and satisfactory to the Trust or to the persons indemnified pursuant
to the foregoing paragraph. In the event that the Distributor elects to assume
the defense of any such suit and retain such legal counsel, the Trust or the
persons indemnified pursuant to the foregoing paragraph shall bear the fees and
expenses of any additional legal counsel retained by them. If the Distributor
does not elect to assume the defense of any such suit, the Distributor will
reimburse the Trust and the persons indemnified pursuant to the foregoing
paragraph for the reasonable fees and expenses of any legal counsel retained by
them. The Distributor agrees to promptly notify the Trust of the commencement of
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any litigation of proceedings against it or any of its officers, employees or
representatives in connection with the issue or sale of any shares.
(b) Indemnification of the Distributor. The Trust agrees to indemnify
and hold harmless the Distributor and each of its present or former directors,
officers, employees and representatives and each person, if any, who controls
the Distributor within the meaning of Section 15 of the Securities Act against
any and all losses, liabilities, damages, claims or expenses (including the
reasonable costs of investigating or defending any alleged loss, liability,
damage, claim or expense and reasonable legal counsel fees incurred in
connection therewith) to which the Distributor or any such person may become
subject under the Securities Act, under any other statute, at common law, or
otherwise, arising out of the acquisition of any Shares by any person which (i)
may be based upon any wrongful act by the Trust or any of the Trust's Trustees,
officers, employees or representatives acting in such capacities, or (ii) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a Registration Statement, Prospectus, shareholder report or other
information covering shares filed or made public by the Trust or any amendment
thereof or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading unless such statement or omission was made in
reliance upon information furnished to the Trust by the Distributor. In no case
(i) is the Trust's indemnity in favor of the Distributor, or any person
indemnified to be deemed to protect the Distributor or such indemnified person
against any liability to which the Distributor or such person would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of his
obligations and duties under this Agreement, or (ii) is the Trust to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against Distributor, or person indemnified unless the Distributor, or
such person, as the case may be, shall have notified the Trust in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Distributor or upon such person (or after the Distributor or
such person shall have received notice of such service on any designated agent).
However, failure to notify the Trust of any such claim shall not relieve the
Trust from any liability which the Trust may have to the Distributor or any
person against whom such action is brought otherwise than on account of the
Trust's indemnity agreement contained in this paragraph.
The Trust shall be entitled to participate, at its own expense, in the
defense or, if the Trust so elects, to assume the defense of any suit brought to
enforce any such claim, but if the Trust elects to assume the defense, such
defense shall be conducted by legal counsel chosen by the Trust and satisfactory
to the Distributor or to the persons indemnified pursuant to the foregoing
paragraph. In the event that the Trust elects to assume the defense of any such
suit and retain such legal counsel, the Distributor or the persons indemnified
pursuant to the foregoing paragraph shall bear the fees and expenses of any
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additional legal counsel retained by them. If the Trust does not elect to assume
the defense of any such suit, the Trust will reimburse the Distributor and the
persons indemnified pursuant to the foregoing paragraph for the reasonable fees
and expenses of any legal counsel retained by them. The Trust agrees to promptly
notify the Distributor of the commencement of any litigation or proceedings
against it or any of its directors, officers, employees or representatives in
connection with the issue or sale of any shares.
Section 11. Duration and Termination of this Agreement
11.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Trustees of the Trust, or by the vote of a majority of
the outstanding voting securities of each relevant Fund, and (b) concurrently
with such approval by the Trustees or prior to such approval by the holders of
the outstanding voting securities of each relevant Fund, as the case may be, by
the vote of a majority of those Trustees who are not interested persons, as
defined in the Act, of the Trust and who have no direct or indirect financial
interest in the operation of any relevant Fund's Plan, any agreement related to
such Plan or this Agreement ("Qualified Trustees"), cast in person at a meeting
called for the purpose of voting upon such approval. The Distributor shall
furnish to the Trust, promptly upon its request, such information as may
reasonably be necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
11.2 This Agreement may be terminated at any time with respect to any
and/or all of the Funds, without the payment of any penalty, by a majority of
the Qualified Trustees or by vote of a majority of the outstanding voting
securities of each relevant Fund, or by the Distributor, on not more than sixty
(60) days' nor less than thirty (30) days' prior written notice to the other
party; provided that, in the case of termination by a Fund, such action shall
have been authorized by resolution of a majority of the Qualified Trustees or by
vote of a majority of the outstanding voting securities of the relevant Fund.
This Agreement shall automatically terminate in the event of its assignment.
Section 12. Amendments to this Agreement
This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) the Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities of each relevant Fund, and (b) by
the vote of a majority of the Qualified Trustees cast in person at a meeting
called for the purpose of voting on such amendment.
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Section 13. Governing Law
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of California as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of California, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.
Section 14. Liabilities of the Trust
The Trust is a series trust and all debts, liabilities, obligations and
expenses of a particular Fund shall be enforceable only against the assets of
that Fund and not against the assets of any other Fund or of the Trust as a
whole. Neither the Trustees, officers, agents or shareholders of the Trust
assume any personal liability for obligations entered into on behalf of the
Trust (or a Fund thereof).
Section 15. Miscellaneous
The captions in this Agreement are included for convenience of reference
only and in no way define or delineate any of the provisions hereof or otherwise
affect their construction or effect.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Nothing herein contained shall be deemed to require the Trust to take any
action contrary to its Declaration of Trust or By-Laws, or any applicable
statutory or regulatory requirement to which it is subject or by which it is
bound, or to relieve or deprive the Board of Trustees of the Trust of
responsibility for and control of the conduct of the affairs of the Trust.
This Agreement, together with Schedule A, is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein; provided that each of the
provisions set forth in clauses (I) through (V) of the second paragraph of
Section 2 of the Plan (as in effect on the date hereof) relating to CDSC shares
of each applicable Fund, together with the related definitions, are hereby
incorporated into Section 8 hereof by reference with the same force and effect
as if set forth herein in their entirety.
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Section 16. Definition of Terms
Any question of interpretation of any term or provision of this Agreement
having a counterpart in or otherwise derived from a term or provision of the
Investment Company Act shall be resolved by reference to such term or provision
of the Investment Company Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court, by rules, regulations or orders of the Commission validly issued pursuant
to the Investment Company Act. Specifically, the terms "vote of a majority of
the outstanding voting securities," "interested persons," "assignment," and
"affiliated person," as used in Section 11 hereof, shall have the meanings
assigned to them by Section 2(a) of the Investment Company Act. In addition,
where the effect of a requirement of the Investment Company Act reflected in any
provision of this Agreement is modified by a rule, regulation or order of the
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year above written.
FIRST FUND DISTRIBUTORS, INC.
By: /s/Xxxxxx X. Xxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
PIC INVESTMENT TRUST
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
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SCHEDULE A
TO THE
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
ALLOCATION PROCEDURES
The following relates solely to CDSC shares.
The Distributor's Allocable Portion of Distribution Fees and CDSCs in
respect of CDSC shares shall be 100% until such time as the Distributor shall
cease to serve as exclusive distributor of CDSC shares; thereafter collections
which constitute CDSCs, and Distribution Fees relating to CDSC shares shall be
allocated among the Distributor and any successor distributor ("Successor
Distributor") in accordance with this Schedule A.
Defined terms used in this Schedule A and not otherwise defined herein
shall have the meanings assigned to them in the Amended and Restated
Distribution Agreement (the "Distribution Agreement"), of which this Schedule A
is a part. As used herein the following terms shall have the meanings indicated:
"Commission Share" means each CDSC share, 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 CDSC 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 CDSC share of the Fund,
other than a Commission Share (including, without limitation, any CDSC 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.
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"Omnibus Share" means, in respect of a Fund, a Commission Share or Free
Share sold by one of the selling agents listed on Exhibit I. If, subsequent to
the Successor Distributor becoming exclusive distributor of the CDSC 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 CDSC SHARES
CDSC shares which 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 which 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 CDSC 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 CDSC shares of the Fund and on or prior to the date
such Successor Distributor ceased to be the exclusive distributor of CDSC 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 which 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
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to each on such date; 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 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 which 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 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
CDSC 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-3
(A + C)/2
(B + D)/2
where:
A= The aggregate Net Asset Value of all CDSC 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 CDSC shares of a Fund at the beginning
of such calendar month
C= The aggregate Net Asset Value of all CDSC 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 CDSC 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 which allocate the average Net Asset
Value of the Commission Shares (or all CDSC 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 CDSC 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 CDSC 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 CDSC shares of a Fund for such
calendar month
A-4
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 conduct
rules or any other applicable law change, which change disproportionately
reduces, 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 CDSC shares relating to a Fund shall be adjusted by
agreement among the relevant parties provided, however, if the Distributor, the
Successor Distributors and the Company 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 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.
A-5
EXHIBIT I
To Schedule A
Selling Agents
A - 6
