ENDOWMENTS PRINCIPAL UNDERWRITING AGREEMENT
ENDOWMENTS
THIS
PRINCIPAL UNDERWRITING AGREEMENT, is between ENDOWMENTS, a Delaware business
trust (the “Trust”), and AMERICAN FUNDS DISTRIBUTORS, INC., a California
corporation (the “Distributor”).
W
I T N E
S S E T H:
WHEREAS,
the Trust is registered under the Investment Company Act of 1940, as amended
(the “1940 Act”), as an open-end diversified investment company which offers one
class of shares of beneficial interest, designated as Class A shares, and
it is
a part of the business of the Trust, and affirmatively in the interest of
the
Trust, to offer shares of the Trust either from time to time or continuously
as
determined by the Trust’s officers subject to authorization by its Board of
Trustees; and
WHEREAS,
the Distributor is engaged in the business of promoting the distribution
of
shares of investment companies; and
WHEREAS,
the Trust and the Distributor wish to enter into an agreement with each other
to
promote the distribution of the shares of the Trust and of all series or
classes
of the Trust which may be established in the future;
NOW,
THEREFORE, the parties agree as follows:
1.
(a) The
Distributor shall be the exclusive principal underwriter for the sale of
the
shares of the Trust and of each series or class of the Trust which may be
established in the future, except as otherwise provided pursuant to the
following subsection (b). The terms “shares of Trust” or “shares” as used herein
shall mean shares of beneficial interest of the Trust and each series or
class
which may be established in the future and become covered by this Agreement
in
accordance with Section 30 of this Agreement.
(b) The
Trust
may, upon 60 days’ written notice to the Distributor, from time to time
designate other principal underwriters of its shares with respect to areas
other
than the North American continent, Hawaii, Puerto Rico, and such countries
or
other jurisdictions as to which the Trust may have expressly waived in writing
its right to make such designation. In the event of such designation, the
right
of the Distributor under this Agreement to sell shares in the areas so
designated shall terminate, but this
Agreement
shall remain otherwise in full force and effect until terminated in accordance
with the other provisions hereof.
2. In
the
sale of shares of the Trust, the Distributor shall act as agent of the Trust
except in any transaction in which the Distributor sells such shares as a
dealer
to the public, in which event the Distributor shall act as principal for
its own
account.
3. The
Trust
shall sell shares only through the Distributor, except that the Trust may,
to
the extent permitted by the 1940 Act and the rules and regulations promulgated
thereunder or pursuant thereto, at any time:
(a)
issue
shares to any corporation, association, trust, partnership or other
organization, or its, or their, security holders, beneficiaries or members,
in
connection with a merger, consolidation or reorganization to which the Trust
is
a party, or in connection with the acquisition of all or substantially all
the
property and assets of such corporation, association, trust, partnership
or
other organization;
(b)
issue
shares at net asset value to the holders of shares of capital stock or
beneficial interest of other investment companies served as investment adviser
by any affiliated company or companies of The Capital Group Companies, Inc.,
to
the extent of all or any portion of amounts received by such shareholders
upon
redemption or repurchase of their shares by the other investment
companies;
(c)
issue
shares at net asset value to its shareholders in connection with the
reinvestment of dividends paid and other distributions made by the
Trust;
(d)
issue
shares at net asset value to persons entitled to purchase shares at net asset
value without a sales charge or contingent deferred sales charge as described
in
the Trust's current Registration Statement in effect under the Securities
Act of
1933, as amended, for each series issued by the Trust at the time of such
offer
or sale.
4. The
Distributor shall devote its best efforts to the sale of shares of the Trust
and
shares of any other mutual funds served as investment adviser by affiliated
companies of The Capital Group Companies, Inc., and insurance contracts funded
by shares of such mutual funds, for which the Distributor has been authorized
to
act as a principal underwriter for the sale of shares. The Distributor shall
maintain a sales organization suited to the sale of shares of the Trust and
shall use its best efforts to effect such sales in jurisdictions as to which
the
Trust shall have expressly waived in writing its right to designate another
principal underwriter pursuant to subsection 1(b) hereof, and shall effect
and
maintain appropriate qualification to do so in all those jurisdictions in
which
it sells or offers shares for sale and in which qualification is
required.
5. Within
the United States of America, any and all dealers to whom the Distributor
shall
offer and sell shares must be duly licensed and qualified to sell shares
of the
Trust. Shares sold to dealers shall be for resale by such dealers only at
the
public offering price set forth in the current Prospectus of the Trust’s
Registration Statement in effect under the Securities Act of 1933, as amended
(“Prospectus”). The Distributor shall not, without the consent of the Trust,
sell or offer for sale any shares of a series or class issued by the Trust
other
than as principal underwriter pursuant to this Agreement.
6. If
the
Distributor sells shares of the Trust to dealers, it shall be the responsibility
of the Distributor to ensure that such dealers are appropriately qualified
to
transact business in the shares under applicable laws, rules and regulations
promulgated by such national, state, local or other governmental or
quasi-governmental authorities as may in a particular instance have
jurisdiction.
7. The
applicable public offering price of shares shall be the price which is equal
to
the net asset value per share, as shall be determined by the Trust in the
manner
and at the time or times set forth in and subject to the provisions of the
Prospectus of the Trust.
8. All
orders for shares received by the Distributor shall, unless rejected by the
Distributor or the Trust, be accepted by the Distributor immediately upon
receipt and confirmed at an offering price determined in accordance with
the
provisions of the Prospectus and the 1940 Act, and applicable rules in effect
thereunder. The Distributor shall not hold orders subject to acceptance nor
otherwise delay their execution. The provisions of this Section shall not
be
construed to restrict the right of the Trust to withhold shares from sale
under
Section 15 hereof.
9. The
Trust
or its transfer agent shall be promptly advised of all orders received, and
shall cause shares to be issued upon payment therefor in New York or Los
Angeles
Clearing House Trusts.
10. The
Distributor shall adopt and follow procedures as approved by the officers
of the
Trust for the confirmation of sales to dealers or other investors of the
Trust,
the collection of amounts payable by dealers or other investors of the Trust
on
such sales, and the cancellation of unsettled transactions, as may be necessary
to comply with the requirements of the Securities and Exchange Commission
or the
National Association of Securities Dealers, Inc. (“NASD”), as such requirements
may from time to time exist.
11. The
Trust
agrees to use its best efforts to maintain its registration as a diversified
open-end management investment company under the 0000 Xxx.
12. The
Trust
agrees to use its best efforts to maintain an effective Prospectus under
the
Securities Act of 1933, as amended, and warrants that such Prospectus will
contain all statements required by and will conform with the requirements
of
such Securities Act of 1933 and the rules and regulations thereunder, and
that
no part of any such Prospectus, at the time the Registration Statement of
which
it is a part becomes effective, will contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein not misleading (excluding any
information provided by the Distributor in writing for inclusion in the
Prospectus). The Distributor agrees and warrants that it will not in the
sale of
shares use any Prospectus, advertising or sales literature not approved by
the
Trust or its officers nor make any untrue statement of a material fact nor
omit
the stating of a material fact necessary in order to make the statements
made,
in the light of the circumstances under which they are made, not misleading.
The
Distributor agrees to indemnify and hold the Trust harmless from any and
all
loss, expense, damage and liability resulting from a breach of the agreements
and warranties contained in this Section, or from the use of any sales
literature, information, statistics or other aid or device employed in
connection with the sale of shares.
13. The
expense of each printing of each Prospectus and each revision thereof or
addition thereto deemed necessary by the Trust's officers to meet the
requirements of applicable laws shall be paid by the Trust,
including:
(a)
the
typesetting and make-ready charges;
(b)
the
printing charges; and
(c)
any
expenses incurred in connection with the foregoing.
14. The
Trust
agrees to use its best efforts to qualify and maintain the qualification
of an
appropriate number of the shares of each series or class it offers for sale
under the securities laws of such states as the Distributor and the Trust
may
approve. Any such qualification for any series or class may be withheld,
terminated or withdrawn by the Trust at any time in its discretion. The expense
of qualification and maintenance of qualification shall be borne by the Trust,
but the Distributor shall furnish such information and other material relating
to its affairs and activities as may be required by the Trust or its counsel
in
connection with such qualifications.
15. The
Trust
may withhold shares of any series or class from sale to any person or persons
or
in any jurisdiction temporarily or permanently if, in the opinion of its
counsel, such offer or sale would be contrary to law or if the Trustees or
the
President or any Vice President of the Trust determines that such offer or
sale
is not in the best interest of the Trust. The Trust will give prompt notice
to
the Distributor of any withholding and will indemnify it against any loss
suffered by the Distributor as a result of such withholding by reason of
nondelivery of shares of any series or class after a good faith confirmation
by
the Distributor of sales thereof prior to receipt of notice of such
withholding.
16. (a)
This
Agreement may be terminated at any time, without payment of any penalty,
as to
the Trust or any series on sixty (60) days’ written notice by the Distributor to
the Trust.
(b) This
Agreement may be terminated as to the Trust or any series or class by either
party upon five (5) days’ written notice to the other party in the event that
the Securities and Exchange Commission has issued an order or obtained an
injunction or other court order suspending effectiveness of the Registration
Statement covering the shares of the Trust or such series or class.
(c) This
Agreement may be terminated as to the Trust or any series or class by the
Trust
upon five (5) days’ written notice to the Distributor provided either of the
following events has occurred:
(i) the
NASD
has expelled the Distributor or suspended its membership in that organization;
or
(ii) the
qualification, registration, license or right of the Distributor to sell
shares
of any series in a particular state has been suspended or canceled by the
State
of California or any other state in which sales of the shares of the Trust
or
such series during the most recent 12-month period exceeded 10% of all shares
of
such series sold by the Distributor during such period.
(d) This
Agreement may be terminated as to the Trust or any series or class at any
time
on sixty (60) days’ written notice to the Distributor without the payment of any
penalty, by vote of a majority of the Independent Trustees or by vote of
a
majority of the outstanding voting securities (as defined in the 0000 Xxx)
of
the Trust or such series or class.
17. This
Agreement shall not be assignable by either party hereto and in the event
of
assignment shall automatically terminate forthwith. The term “assignment” shall
have the meaning set forth in the 1940 Act.
18. No
provision of this Agreement shall protect or purport to protect the Distributor
against any liability to the Trust or holders of its shares for which the
Distributor would otherwise be liable by reason of willful misfeasance, bad
faith, or gross negligence.
19. This
Agreement shall become effective on November 16, 2006. Unless sooner terminated
in accordance with the other provisions hereof, this Agreement shall continue
in
effect until July 27, 2007, and shall continue in effect from year to year
thereafter but only so long as such continuance is specifically approved
at
least annually by (i) the vote of a majority of the Independent Trustees
of the
Trust cast in person at a meeting called for the purpose of voting on such
approval, and (ii) the vote of either a majority of the entire Board of Trustees
of the Trust or a majority (within the meaning of the 0000 Xxx) of the
outstanding voting securities of the Trust.
20. If
the
Trust shall at any time issue shares in more than one series or class, this
Agreement shall take effect with respect to such series or class of the Trust
which may be established in the future at such time as it has been approved
as
to such series or class by vote of the Board of Trustees and the Independent
Trustees in accordance with Section 17. The Agreement as approved with respect
to any series or class shall specify any provisions which may differ from
those
herein with respect to such series, subject to approval in writing by the
Distributor.
This
Agreement may be approved, amended, continued or renewed with respect to
a
series or class as provided herein notwithstanding such approval, amendment,
continuance or renewal has not been effected with respect to any one or more
other series or class of the Trust.
This
Agreement shall be construed under and shall be governed by the laws of the
State of California, and the parties hereto agree that proper venue of any
action with respect hereto shall be Los Angeles County, California.
IN
WITNESS WHEREOF, the parties hereto have caused this instrument to be executed
in duplicate original by their officers thereunto duly authorized, as of
November 16, 2006.
AMERICAN
FUNDS DISTRIBUTORS, INC.
By:______________________________
Xxxxx X. Xxxxxxxx
President
By:_______________________________
Xxxxx X. Xxxxxx
Secretary
ENDOWMENTS
By:________________________________
Xxxxxx X. X'Xxxxxxx
Vice Chairman and PEO
By:________________________________
Xxxxxxx X. Xxxx
Vice President and Secretary
