Xxx Xxxxxxxxx Distributors, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
IVY FUND
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust")
and you (the "Distributor") as follows:
1. The Trust is an open-end management investment company that currently has
twenty investment portfolios and that may create additional portfolios in
the future. One or more separate classes of shares of beneficial interest
in the Trust is offered to investors with respect to each portfolio. This
Agreement relates to Class A, Class B and Class C of Ivy Asia Pacific Fund,
Ivy Bond Fund, Ivy Canada Fund, Ivy China Region Fund, Ivy Developing
Nations Fund, Ivy European Opportunities Fund, Ivy Global Fund, Ivy Global
Natural Resources Fund, Ivy Global Science & Technology Fund, Ivy Growth
Fund, Ivy Growth with Income Fund, Ivy International Fund, Ivy
International Fund II, Ivy International Small Companies Fund, Ivy
International Strategic Bond Fund, Ivy Pan-Europe Fund, Ivy South America
Fund, Ivy US Blue Chip Fund and Ivy US Emerging Growth Fund (the "Equity
and Fixed Income Funds"), to Ivy Money Market Fund and to such other
portfolios as shall be designated from time to time by the Board of
Trustees in any supplement to a Plan (together with the Equity and Fixed
Income Funds, the "Funds"). The Trust engages in the business of investing
and reinvesting the assets of the Funds in the manner and in accordance
with their respective investment objectives and restrictions as specified
in the currently effective Prospectuses (the "Prospectuses") relating to
the Funds included in the Trust's Registration Statement, as amended from
time to time (the "Registration Statement"), filed by the Trust under the
Investment Company Act of 1940, as amended, (the "1940 Act") and the
Securities Act of 1933, as amended, (the "1933 Act"). Copies of the
documents referred to in the preceding sentence have been furnished to the
Distributor. Any amendments to those documents shall be furnished to the
Distributor promptly. The Trust has adopted a separate Distribution Plan
(each, a "Plan") for Class A, Class B and Class C of each of the Equity and
Fixed Income Funds pursuant to Rule 12b-1 under the 1940 Act.
2. As the Trust's agent, the Distributor shall be the exclusive distributor
for the unsold portion of shares of beneficial interest in Ivy Money Market
Fund and Class A, Class B and Class C shares of beneficial interest in the
Equity and Fixed Income Funds (the "Shares") which may from time to time be
registered under the 0000 Xxx.
3. The Trust shall sell the Shares to eligible investors as described in the
Prospectuses through the Distributor, as the Trust's agent. All orders for
Shares received by the Distributor shall be subject to acceptance and
confirmation by the Trust. The Trust shall have the right, at its election,
to deliver either (i) Shares issued upon original issue or (ii) treasury
shares.
4. As the Trust's agent, the Distributor may sell and distribute the Shares in
such manner not inconsistent with the provisions hereof and the Trust's
Prospectuses as the Distributor may determine from time to time. In this
connection, the Distributor shall comply with all laws, rules and
regulations applicable to it, including, without limiting the generality of
the foregoing, all applicable rules or regulations under the 1940 Act and
of any securities association registered under the Securities Exchange Act
of 1934, as amended (the "1934 Act").
5. To the extent permitted by its then effective Prospectuses, the Trust
reserves the right to sell the Shares to purchasers to the extent that it
or the transfer agent for the Shares receives purchase requests therefor.
The Trust reserves the right to refuse at any time or times to sell any
Shares for any reason deemed adequate by it.
6. All Shares offered for sale and sold by the Distributor shall be offered
for sale and sold by the Distributor to designated investors at the price
per Share specified and determined as provided in the Funds' Prospectuses,
including any applicable reduction or elimination of sales charges with
respect to Class A Shares of the Equity and Fixed Income Funds as provided
in the Equity and Fixed Income Funds' Prospectus (the "offering price").
The Trust shall determine and promptly furnish to the Distributor a
statement of the offering price at least once on each day on which the New
York Stock Exchange is open for trading. Each offering price shall become
effective at the time and shall remain in effect during the period
specified in the statement. Each such statement shall show the basis of its
computation.
7. (a) The Distributor shall be entitled to deduct a commission on all Class A
Shares sold equal to the difference, if any, between the 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 such commission to the Distributor. Out of
such commission, the Distributor may allow to dealers such concession as
the Distributor may determine from time to time. Notwithstanding anything
in this Agreement otherwise provided, sales may be made at net asset value
as provided in the Prospectuses for the Funds.
(b) The Distributor shall be entitled to deduct a contingent deferred sales
charge ("CDSC") on the redemption of certain Class A, Class B and Class C
Shares in accordance with, and in the manner set forth in, the Equity and
Fixed Income Funds' Prospectuses. The Distributor may reallow any or all of
such contingent deferred sales charges to dealers as the Distributor may
determine from time to time. Notwithstanding anything in this Agreement
otherwise provided, the Distributor may waive the contingent deferred sales
charge as disclosed in the Equity and Fixed Income Funds' Prospectuses.
(c) In respect of the Class B Shares of each Fund, the following provisions
shall apply:
(i) In consideration of the Distributor's services as principal distributor of
the Fund's Class B Shares pursuant to this contract and the Fund's
distribution plan in respect of such Shares (the "Class B Plan"), the
Trust, on behalf of such Fund, agrees: (I) to pay to the Distributor
monthly in arrears its "Allocable Portion" (as hereinafter defined) 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, and (II) to withhold from redemption proceeds the Distributor's
Allocable Portion of the CDSCs and to pay the same over to the Distributor
or at its direction.
(ii) Each of the provisions set forth in clauses (I) through (V) of the third
sentence of paragraph 2 of the Class B Plan as in effect on the date
hereof, together with the related definitions and the Allocation Schedule
attached hereto as Exhibit A, are hereby incorporated herein by reference
with the same force and effect as if set forth herein in their entirety.
8. The Trust shall furnish the Distributor from time to time, for use in
connection with the sale of Shares, such information with respect to the
Trust as the Distributor may reasonably request. The Trust represents and
warrants that such information, when signed by one of its officers, shall
be true and correct. The Trust also shall furnish to the Distributor copies
of its reports to its shareholders and such additional information
regarding the Trust's financial condition as the Distributor may reasonably
request from time to time.
9. The Registration Statement and the Prospectuses have been or will be, as
the case may be, prepared in conformity with the 1933 Act, the 1940 Act and
the rules and regulations of the Securities and Exchange Commission (the
"SEC"). The Trust represents and warrants to the Distributor that the
Registration Statement and the Prospectuses contain or will contain all
statements required to be stated therein in accordance with the 1933 Act,
the 1940 Act and the rules and regulations thereunder, that all statements
of fact contained or to be contained therein are or will be true and
correct at the time indicated or the effective date, as the case may be,
and that neither the Registration Statement nor the Prospectuses, when they
shall become effective under the 1933 Act or be authorized for use, shall
include 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 to a purchaser of Shares. The Trust shall from time
to time file such amendment or amendments to the Registration Statement and
the Prospectuses as, in the light of future developments, shall, in the
opinion of the Trust's counsel, be necessary in order to have the
Registration Statement and the Prospectuses at all times contain all
material facts required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares. The Trust
represents and warrants to the Distributor that any amendment to the
Registration or the Prospectuses filed hereafter by the Trust will, when it
becomes effective under the 1933 Act, contain all statements required to be
stated therein in accordance with the 1933 Act, the 1940 Act and the rules
and regulations thereunder, that all statements of fact contained therein
will, when the same shall become effective, be true and correct, and that
no such amendment, when it becomes effective, will include an untrue
statement of a material fact or will omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading to a purchaser of Shares.
10. The Trust shall prepare and furnish to the Distributor from time to time
such number of copies of the most recent form of the Prospectuses for the
Funds filed with the SEC as the Distributor may reasonably request. The
Trust authorizes the Distributor to use the Prospectuses, in the form
furnished to the Distributor from time to time, in connection with the sale
of Shares. The Trust shall indemnify, defend and hold harmless the
Distributor, its officers and directors and any person who controls the
Distributor within the meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) that the Distributor, its
officers and directors or any such controlling person may incur under the
1933 Act, the 1940 Act, the common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectuses or arising out of or based upon
any alleged omission to state a material fact required to be stated in
either or necessary to make the statements in either not misleading. This
contract shall not be construed to protect the Distributor against any
liability to the Trust or its shareholders to which the Distributor would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this contract. This indemnity
agreement and the Trust's representations and warranties in this contract
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor, its officers and
directors or any such controlling person. This indemnity agreement shall
inure exclusively to the benefit of the Distributor and its successors, the
Distributor's officers and directors and their respective estates and any
such controlling persons and their successors and estates.
11. The Distributor agrees to indemnify, defend and hold harmless the Trust,
its officers and Trustees and any person who controls the Trust within the
meaning of the 1933 Act, from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending
such claims, demands or liabilities and any counsel fees incurred in
connection therewith) that the Trust, its officers or Trustees or any such
controlling person, may incur under the 1933 Act, the 1940 Act, the common
law or otherwise, but only to the extent that such liability or expenses
incurred by the Trust, its officers or Trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any untrue statement of a material fact contained in information furnished
in writing by the Distributor to the Trust specifically for use in the
Registration Statement or the Prospectuses or shall arise out of or based
upon any omission to state a material fact in connection with such
information required to be stated in the Registration Statement or the
Prospectuses or necessary to make such information not misleading.
12. No Shares shall be sold through the Distributor or by the Trust under this
contract and no orders for the purchase of Shares shall be confirmed or
accepted by the Trust if and so long as the effectiveness of the
Registration Statement shall be suspended under any of other provisions of
the 1933 Act. Nothing contained in this paragraph 12 shall in any way
restrict, limit or have any application to or bearing upon the Trust's
obligation to redeem Shares from any shareholder in accordance with the
provisions of its Agreement and Declaration of Trust. The Trust will use
its best efforts at all times to have the Shares effectively registered
under the 0000 Xxx. 13. The Trust agrees to advise the Distributor
immediately:
(a) of any request by the SEC for amendments to the Registration Statement or
the Funds' Prospectuses or for additional information;
(b) in the event of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the Funds' Prospectuses
under the 1933 Act or the initiation of any proceedings for that purpose;
(c) of the happening of any material event that makes untrue any statement made
in the Registration Statement or the Funds' Prospectuses or that requires
the making of a change in either thereof in order to make the statements
therein not misleading; and
(d) of all actions of the SEC with respect to any amendments to the
Registration Statement or the Funds' Prospectuses that may from time to
time be filed with the SEC under the 1933 Act or the 1940 Act.
14. Insofar as they concern the Trust, the Trust shall comply with all
applicable laws, rules and regulations, including, without limiting the
generality of the foregoing, all rules and regulations made or adopted
pursuant to the 1933 Act, the 1940 Act or by any securities association
registered under the 1934 Act.
15. The Distributor may, if it desires and at its own cost and expense, appoint
or employ agents to assist it in carrying out its obligations under this
contract, but no such appointment or employment shall relieve the
Distributor of any of its responsibilities or obligations to the Trust
under this contract.
16. (a) The Distributor shall from time to time employ or associate with it
such persons as it believes necessary to assist it in carrying out its
obligations under this contract. The compensation of such persons shall be
paid by the Distributor.
(b) The Trust shall execute all documents and furnish any information that may
be reasonably necessary in connection with the qualification of the Shares
for sale in jurisdictions designated by the Distributor.
17. The Distributor shall pay all expenses incurred in connection with its
qualification as a dealer or broker under Federal or state law. It is
understood and agreed that, so long as any Plan continues in effect, any
expenses incurred by the Distributor hereunder (as well as any other
expenses that may be permitted to be paid pursuant to a Plan) may be paid
from amounts received by it from the Trust under such Plan. The Trust shall
be responsible for all of its expenses and liabilities, including: (i) the
fees and expenses of the Trust's Trustees who are not interested persons
(as defined in the 0000 Xxx) of the Trust; (ii) the salaries and expenses
of any of the Trust's officers or employees who are not affiliated with the
Distributor; (iii) interest expenses; (iv) taxes and governmental fees,
including an original issue taxes or transfer taxes applicable to the sale
or delivery of Shares or certificates therefor; (v) brokerage commissions
and other expenses incurred in acquiring or disposing of portfolio
securities; (vi) the expenses of registering and qualifying Shares for sale
with the SEC and with various state securities commissions; (vii)
accounting and legal costs; (viii) insurance premiums; (ix) fees and
expenses of the Trust's Custodian and Transfer Agent and any related
services; (x) expenses of obtaining quotations of portfolio securities and
of pricing Shares; (xi) expenses of maintaining the Trust's legal existence
and of shareholders' meetings; (xii) expenses of preparing and distributing
to existing shareholders periodic reports, proxy materials and
Prospectuses; (xiii) fees and expenses of membership in industry
organizations; and (xiv) expenses of qualification of the Trust as a
foreign corporation authorized to do business in any jurisdiction if the
distributor determines that such qualification is necessary or desirable.
18. This contract shall continue in effect automatically for successive annual
periods, provided such continuance is specifically approved at least
annually (i) by a vote of a majority of the Trustees who are not parties to
the contract or interested persons (as defined in the 0000 Xxx) of any such
party and who have no director or indirect financial interest in the
operation of the Plans or in any related agreement (the "Independent
Trustees"), by vote cast in person at a meeting called for the purpose of
voting on such approval and (ii) either (a) by the vote of a majority of
the outstanding voting securities (as defined in the 0000 Xxx) of the Funds
or (b) by the vote of a majority of the entire Board of Trustees. This
contract may be terminated with respect to a Fund at any time, without
payment of any penalty, by a vote of a majority of the outstanding voting
securities of that Fund (as defined in the 0000 Xxx) or by a vote of a
majority of the Independent Trustees of the Trust on 60 days' written
notice to the Distributor or by the Distributor on 60 days' written notice
to the Trust. This contract shall terminate automatically in the event of
its assignment (as defined in the 1940 Act).
19. Except to the extent necessary to perform the Distributor's obligations
under this contract, nothing herein shall be deemed to limit or restrict
the right of the Distributor, or any affiliate of the Distributor, or any
employee of the Distributor, to engage in any other business or to devote
time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature, or to render services
of any kind to any other corporation, firm, individual or association.
20. This contract shall be construed in accordance with the laws of the State
of Florida to the extent such laws are consistent with the 1940 Act.
21. The Trust's Agreement and Declaration of Trust, as amended and restated,
has been filed with the Secretary of State of The Commonwealth of
Massachusetts. The obligations of the Trust are not personally binding
upon, nor shall resort be had to the private property of any of the
Trustees, shareholders, officers, employees or agents of the Trust, but
only the Trust's property shall be bound.
If the foregoing correctly sets forth the agreement between the Trust
and the Distributor, please so indicate by signing and returning to the Trust
the enclosed copy hereof.
Very truly yours,
IVY FUND
By: ___________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED:
XXX XXXXXXXXX DISTRIBUTORS, INC.
By: _______________________________
Xxxxx X. Xxxxxxx, President
Dated: __________________, 1999
SCHEDULE A
to the
[NAME OF FUND]
Distribution Agreement
ALLOCATION PROCEDURES
The Distributor's Allocable Portion of Distribution Fees and Contingent
Deferred Sales Charges in respect of Shares of [the Trust/each Fund] shall be
100% until such time as the Distributor shall cease to serve as exclusive
distributor of Shares of [the Trust/such Fund]; thereafter collections which
constitute Contingent Deferred Sales Charges, and Asset Based Sales Charges
related to Shares of [the Trust/each Fund] 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 Distribution Agreement.
As used herein the following terms shall have the meanings indicated:
"Commission Share" means in respect of [the Trust/any Fund], each Share
of [the Trust/such Fund], which is issued under circumstances which would
normally give rise to an obligation of the holder of such Share to pay a
Contingent Deferred Sales Charge upon redemption of such Share (including,
without limitation, any Share of [the Trust/such Fund] issued in connection with
a permitted free exchange) and any such Share shall continue to be a Commission
Share of [the Trust/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 Contingent Deferred Sales Charge 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 Contingent Deferred Sales
Charge payable on redemption thereof, if any, is computed.
"Free Share" means, in respect of [the Trust/any Fund], each Share of
[the Trust/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 [the Trust/any Fund], the first
date on which [the Trust/such Fund] issued Shares.
"Net Asset Value" means, (i) with respect to [the Trust/any Fund], as
of the date any determination thereof is made, the net asset value of [the
Trust/such Fund] computed in the manner such value is required to be computed by
[the Trust/such Fund] in its reports to its shareholders, and (ii) with respect
to any Share of [the Trust/such Fund] as of any date, the quotient obtained by
dividing: (A) the net asset value of [the Trust/such Fund] (as computed in
accordance with clause (i) above) allocated to Shares of [the Trust/such Fund]
(in accordance with the constituent documents for [the Trust/such Fund]) as of
such date, by (B) the number of Shares of [the Trust/such Fund] outstanding on
such date.
"Omnibus Share" means, in respect of [the Trust/any Fund], a Commission
Share or Free Share sold by one of the Selling Agents listed on Exhibit I. If,
subsequent to closing of the Program, the Distributor and its Transferees
reasonably determine 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 1, 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.
"Shares" means Class B shares of [the Trust/each Fund].
PART I: ATTRIBUTION OF SHARES
Shares of [the Trust/each Fund], 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 attributed
to the Distributor shall be Commission Shares which are not Omnibus Shares the
Date of Original Issuance of which occurred on or after the Inception Date of
[the Trust/such Fund] and on or prior to the date the Distributor ceased to be
the exclusive distributor of Shares of [the Trust/such Fund].
(b) Commission Shares which are not Omnibus Shares
attributable to each Successor Distributor shall be Commission Shares which are
not Omnibus Shares, the Date of Original Issuance of which occurs after the date
such Successor Distributor became the exclusive distributor of Shares of [the
Trust/such Fund] and on or prior to the date such Successor Distributor ceased
to be the exclusive distributor of Shares of [the Trust/such Fund].
(c) A Commission Share which is not an Omnibus Share of a
particular [Trust/Fund] (the "Issuing Trust") issued in consideration of the
investment of proceeds of the redemption of a Commission Share which is not an
Omnibus Share of another [Trust/Fund] (the "Redeeming Trust") 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 Trust 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.
(d) A Commission Share which is not an Omnibus Share redeemed
(other than in connection with a permitted free exchange) or converted to a
Class A share is attributable to the Distributor or a Successor Distributor
based upon the Date of Original Issuance in accordance with rule (a), (b) and
(c) above.
(2) Free Shares:
Free Shares which are not Omnibus Shares of [the Trust/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 Commission
Shares which are not Omnibus Shares of [the Trust/such Fund] outstanding on such
date are attributed to each on such date; provided that if the Distributor and
its Transferees reasonably determine that the Transfer Agent is able to produce
monthly reports which track the Date of Original Issuance for such Free Shares,
then such Free Shares shall be allocated pursuant to clause l (a), (b) and (c)
above.
(3) Omnibus Shares:
Omnibus Shares of [the Trust/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 Commission Shares which are not Omnibus
Shares of [the Trust/such Fund] outstanding on such date are attributed to it on
such date; provided that if the Distributor and its Transferees reasonably
determine 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 l (a), (b) and (c) above.
PART II: ALLOCATION OF CONTINGENT DEFERRED SALES CHARGES ("CDSCS")
(1) CDSCs Related to the Redemption of Commission Shares which are not
Omnibus Shares:
CDSCs in respect of the redemption of Commission Shares which
are not Omnibus 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 and its Transferees reasonably
determine 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 Distributors 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 ASSET BASED SALES CHARGES
Assuming that the Asset Based Sales Charge remains constant
over time and among [Trusts/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 [the Trust/all Funds] during any calendar
month allocable to the Distributor or a Successor Distributor 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 [the
Trust/all Funds] 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 Shares of [the
Trust/all Funds] at the beginning of such calendar month.
C = The aggregate Net Asset Value of all Shares of the Trust/all
Funds] 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 Shares of [the
Trust/all Funds] at the end of such calendar month.
(2) If the Distributor and its Transferees reasonably
determine 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 [the Trust/all Funds] among the Distributor and any
Successor Distributors in a manner consistent with the methodology detailed in
Part I and Part III(1) above, the portion of the Asset Based Sales Charges
accrued in respect of all such Shares of [the Trust/all Funds] during a
particular calendar month will be allocated to the Distributor or a Successor
Distributor 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 the Trust/all
Funds] 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 Shares of [the
Trust/all Funds] 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 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 Shares relating to [the
Trust/such Fund] shall be adjusted by agreement among the Distributor, its
Transferees, each Successor Distributor and the Company; provided, however, if
the Distributor, its Transferees, 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.
