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