DATED 31 JANUARY 2000
(1) TEMPLETON GLOBAL STRATEGY FUNDS
(2) XXXXXXXXX GLOBAL ADVISORS LIMITED
(3) TEMPLETON GLOBAL STRATEGIC SERVICES SA
(4) LIGHTNING FINANCE COMPANY LIMITED
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AMENDED AND RESTATED COMMISSION PAYING AGREEMENT
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XXXXXXXX XXXXXX XXXXXXXX
00 XXXXXXX XXXXXX
XXXXXX 0
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J:\WP\PMY\LUXAMENDAGR3.DOC
INDEX
ARTICLE 1..................................................2
Definitions..............................................2
ARTICLE 2.................................................10
Closing Arrangements....................................10
ARTICLE 3.................................................10
Commission Payment......................................10
ARTICLE 4.................................................12
Payment of Fees.........................................12
ARTICLE 5.................................................14
Representations and Warranties..........................14
ARTICLE 6.................................................18
Conditions Precedent....................................18
ARTICLE 7.................................................21
Covenants...............................................21
ARTICLE 8.................................................24
Termination Events......................................24
ARTICLE 9.................................................26
Indemnification.........................................26
ARTICLE 10................................................27
Additional Sub-Funds....................................27
ARTICLE 11................................................27
General.................................................27
SCHEDULE A................................................35
SCHEDULE B................................................36
SCHEDULE C................................................37
SCHEDULE D................................................38
SCHEDULE E................................................45
THIS AGREEMENT made on 31 January 2000
BETWEEN:
TEMPLETON GLOBAL STRATEGY FUNDS a societe d'investissement a capital variable,
incorporated under the laws of the Grand-Duchy of Luxembourg, having its
registered office at 00 xxxxxxxxx Xxxxxx, X-0000, Xxxxxxxxxx, (xxx "Fund");
XXXXXXXXX GLOBAL ADVISORS LIMITED (formerly known as Xxxxxxxxx, Xxxxxxxxx &
Xxxxxxxxxx Limited), a company incorporated under the laws of the Commonwealth
of the Bahamas and having its registered office at Nassau, Bahamas, ("TGAL" or
the "Principal Distributor");
TEMPLETON GLOBAL STRATEGIC SERVICES SA, a Societe Anonyme, incorporated under
the laws of the Grand-Duchy of Luxembourg and having its registered office at 00
xxxxxxxxx Xxxxxx, X-0000, Xxxxxxxxxx ("XXXX" );
AND
LIGHTNING FINANCE COMPANY LIMITED, a limited liability company incorporated in
Ireland and having its registered office at Chase Xxxxxxxxx Xxxxx, XXXX, Xxxxxx
0, Xxxxxxx ("LFL").
WHEREAS:
A The Fund has been incorporated as an investment fund for the investment
and reinvestment of its assets in certain types of securities, as more
fully described in its Articles of Incorporation.
B The Fund, pursuant to a distribution agreement dated as of 6 November 1990
made between the Fund and Xxxxxxxxx, Xxxxxxxxx and Xxxxxxxxxx Ltd, a
company incorporated under the laws of the Cayman Islands ("TGH Cayman"),
appointed TGH Cayman as principal distributor of the shares issued from
time to time in the capital of the Fund (the "Shares") for all countries
outside of the United States of America (the "Distribution Agreement").
C TGH Cayman, pursuant to an assignment dated 30 October 1992 made between
the Fund, TGH Cayman and the Principal Distributor, assigned its title and
interest in the Distribution Agreement to the Principal Distributor and
the Principal Distributor thereby assumed the obligations of TGH Cayman
under the Distribution Agreement as if the Principal Distributor were
named in the Distribution Agreement as a party thereto in lieu of TGH
Cayman.
D Pursuant to the Addendum to the Distribution Agreement (the "Distribution
Agreement Addendum") dated 1 July 1999 between the Fund and the Principal
Distributor (which has taken effect as and from the 1 July 1999), the
Principal Distributor has been granted the right to receive all
conditional deferred sales charges and servicing charges in respect of the
Shares.
E Pursuant to a distribution controller agreement made as of 1 October
1995 between the Principal Distributor and TGSS (the "Distribution
Controller Agreement"), the Principal Distributor appointed TGSS as
distribution controller of the Fund (in such capacity, the
"Distribution Controller"). It was agreed in the Distribution
Controller Agreement that TGSS would receive certain fees in return
for co-ordinating the distribution of the Shares and providing certain
other associated services.
F Pursuant to a letter (the "Fees Side-Letter") from the Principal
Distributor to TGSS (which is stated to take effect as of 29 July 1994)
the Principal Distributor granted to TGSS the right to receive certain
conditional deferred sales charges and other charges in connection with
the class of Shares which, up until 1 July 1999, were known as the Class B
Shares and which are now known as the Class Bx Shares (the "Class Bx
Shares").
G With effect from 1 July 1999 and as more particularly described in the
addendum dated June 1999 to the prospectus of the Fund dated September
1997 (as amended, varied or supplemented from time to time by various
instruments including the addendum) (the "Prospectus"), a new class of
Shares named Class B Shares (the "New B Shares") will be introduced for
certain Sub-Funds.
H On the terms and subject to the conditions set out in a Commission
Paying Agreement and letter agreement in relation thereto each dated 1
July 1999 and each among the parties hereto (together the "Commission
Paying Agreement"), pursuant to which the Fund with the knowledge and
consent of TGAL and TGSS requested LFL to perform, in respect of the
New B Shares, certain services in connection with the distribution of
the New B Shares (including the payment of Selling Commissions (as
defined in Article 1.1)). In return, the Fund, pursuant to the terms
of the Commission Paying Agreement, agreed to pay certain fees (as
more particularly described in the Commission Paying Agreement) to LFL
(and TGAL and TGSS agreed to waive any entitlement they may have to
such fees) for each New B Share in respect of which LFL has become
obligated to pay a Selling Commission and any related Transfer and
Reinvested Shares. The Fund's obligation to pay the appropriate fees
in respect of a New B Share and any related Transfer and Reinvested
Shares commenced on the Trade Date for which LFL is obligated to pay a
Selling Commission in respect of that New B Share.
I The parties hereto wish to amend and restate the Commission Paying
Agreement upon the terms and subject to the conditions set out in this
Agreement and, with effect from the date hereof, this Agreement will
supersede the Commission Paying Agreement which shall automatically and
without further act or document terminate upon the execution by the
parties hereto of this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1. DEFINITIONS. Whenever used in this Agreement and the schedules, unless
there is something inconsistent in the subject matter or context, words and
terms shall have the meanings given to them in this Article 1.1 and in the
recitals hereto:
"Additional Sub-Fund" means any new or existing Sub-Fund which commences to
issue New B Shares.
"Adverse Effect" when used alone or in conjunction with other terms means
the occurrence or existence of any act, circumstance, condition, event,
fact, or combination of the foregoing which, in the reasonable judgement of
LFL, creates a significant probability of any (a) adverse effect (or
material adverse effect, where such occurrence is caused by a computer or
operations error) upon (i) the timing or amount of any payment of any Fee;
or (ii) the timely receipt by LFL of any Fees; or (b) a material adverse
effect upon (i) the Funds's, TGAL's or TGSS's ability to pay or perform its
obligations under this Agreement in a timely manner or (ii) the remedies
and other rights of LFL under this Agreement.
"Advisory Agreements" means the investment management agreements in respect
of each of the Sub-Funds between the Fund and the applicable investment
advisor as described in Schedule A as supplemented or amended from time to
time.
"Affiliate" has the meaning provided to that term under the Securities and
Exchange Act of 1933 of the United States of America.
"Agreement" means this Agreement, as the same may from time to time be
amended, supplemented, waived or modified.
"Anniversary of the Sale Cutoff Date" means, in respect of any particular
Monthly Pool, the date which is 6 years following the Sale Cutoff Date in
respect of that Monthly Pool.
"Approved Dealers" means dealers in respect of the Shares as approved by
TGAL or its duly appointed agents.
"Articles of Incorporation" means the articles of incorporation of the
Fund.
"Business Day" means a day on which the Fund is valued in accordance with
the Prospectus Documents.
"Closing" means the completion of the transactions contemplated by this
Agreement and the delivery of additional documentation required by this
Agreement.
"Closing Date" means such date as the parties agree is the date upon which
Closing shall take place.
"Closing Time" means 12:00 p.m. on the Closing Date or such other time on
the Closing Date as the parties may agree as the time at which the Closing
shall take place.
"Collection Account" means a bank account of LFL maintained at The Chase
Manhattan Bank at account number 000-00-00-00, with respect to which the
Fund, TGSS and TGAL shall have no access or control.
"Collections" means (a) all amounts paid or payable under the Program
Documents in respect of the Fees and (b) all proceeds of the foregoing,
except that "Collections" shall not include amounts paid or payable
pursuant to Article 9.1.
"Commission Payer" means LFL acting in its capacity as commission payer
hereunder.
"Deferred Sales Charge" means, with respect to any Sub-Fund, the deferred
sales charge payable, either directly or by withholding from the proceeds
of the redemption of Shares of such Sub-Fund, by the shareholders of such
Sub-Fund on any redemption of Shares of such Sub-Fund in accordance with
the Prospectus Documents relating to such Sub-Fund.
"Deferred Sales Charge Share" means each New B Share issued after July 1,
1999 by a New B Share Sub-Fund in respect of which a Deferred Sales Charge
is payable.
"Distributed Shares" means collectively, the Original Charge Shares
and the Transfer Shares.
"Distribution Agreements" means the distribution services agreements
between each of the Fund, TGAL, TGSS and TGH Cayman (including without
limitation, the Distribution Agreement, the Distribution Agreement
Addendum, the Distribution Controller Agreement and the Fees Side-Letter)
as supplemented or amended from time to time.
"Distributor Report" means a monthly report to be prepared by TGSS which
shall set forth, among other things TGSS's determination, as of the last
Business Day of such month, of (a) the Selling Commissions paid or payable
by LFL in respect of Deferred Sales Charges Shares distributed during such
month, (b) the amount of Fees paid or payable in respect of such month and
the Deferred Sales Charge Shares attributable to such Fees and (c) the
computation of the amount of such Fees in reasonable detail.
"Distributors" means TGAL and TGSS and "Distributor" means any one of them.
"Eligible Fee" means a Fee which (a) (i) constitutes a legal, valid and
binding obligation of the obligor thereof which is not subject to any
dispute, offset, counterclaim or defence whatsoever and (ii) which is not
subject to any adverse claim; and (b) does not contravene any applicable
law.
"External Reinvested Share" is a Reinvested Share which is a share of a
Sub-Fund which is not a New B Share Sub-Fund.
"External Share" means a Share issued by a Sub-Fund, which is not a New B
Share Sub-Fund, upon the immediate investment of proceeds realised on the
redemption of a Distributed Share or another External Share (and any other
Share issued upon the consolidation or subdivision of an External Share).
"Fees" means all amounts payable to LFL under this Agreement and any other
Program Document.
"Free Exchange" shall mean the exchange of Shares of one Sub-Fund for a
Transfer Share or an External Share of another Sub-Fund.
"Free Redemption" means a redemption of Distributed Shares or External
Shares where the obligation of the shareholder of such Distributed Shares
or External Shares to pay the applicable Deferred Sales Charge is relieved
or deferred in whole or in part.
"FRI" means Franklin Resources, Inc., the indirect parent company of
each of the Distributors.
"Fund Event of Termination" means:
(a) any change (or proposed change as agreed between the parties hereto)
in accounting, governmental or other legislation, regulation or policy
(i) which will materially and adversely affect the accounting or tax
treatment of the arrangements under the Program Documents to any of
the Fund, TGSS or TGAL or (ii) as a result of which TGAL, TGSS or the
Fund will become liable, under Article 11.8, to pay any amount or
amounts which, but for such change, it would not have been liable to
pay;
(b) the occurrence of an LFL Insolvency Event; or
(c) a suit, litigation or regulatory proceeding which has a material
adverse effect on the ability of LFL to perform or comply with its
obligations hereunder.
"GAAP" means generally accepted accounting principles in Luxembourg (in the
case of the Fund), or the United States of America (in the case of LFL), as
in effect from time to time and consistently applied (except where
specified otherwise).
"Insolvency Event" means any of the following occurrences:
(a) TGSS, TGAL or the Fund shall generally not pay its obligations as such
obligations become due or shall admit in writing its inability to pay
its obligations generally or shall make a general assignment for the
benefit of creditors; or
(b) any proceeding shall be instituted by or against TGSS, TGAL or the
Fund seeking to adjudicate it in whole or in part bankrupt or
insolvent, or seeking liquidation, winding-up, reorganisation,
arrangement, adjustment, protection, relief or composition of it or
its obligations or proposal to its creditors under any laws relating
to bankruptcy, insolvency or reorganisation or relief of debtors or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for it or for
any substantial part of its property and, in the case of any such
proceedings instituted against it (but not instituted by it), such
proceedings shall remain undismissed or unstayed for a period of 60
days; or
(c) a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or order (i) for the appointment
of a receiver, liquidator, assignee, trustee or sequestrator (or other
similar official) of TGAL, TGSS or the Fund of any material part of
its property or for the winding up or liquidation of its affairs and
such decree shall remain in force undischarged and unstayed for a
period of 60 days; or (ii) for the sequestration or attachment of any
material part of the property of TGSS, TGAL or the Fund without its
unconditional return to the possession of TGSS, TGAL or the Fund or
its unconditional release from such sequestration or attachment within
60 days thereafter; or
(d) TGAL, TGSS or the Fund shall take any action to authorise any of the
actions set forth above.
"Liabilities" means claims, damages, losses, liabilities, expenses,
obligations, penalties, actions, suits, judgments and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable
fees and disbursements of counsel).
"LFL Event of Termination" means each of the following events:
(a) the Fund, TGAL or TGSS shall fail to make or cause to be made in the
manner and when due any payment to be made or to be caused to be made
by it under any Program Document and the failure of such payment shall
continue unremedied for 10 Business Days following notice thereof from
LFL to the entity obligated to make such payment and the failure of
such payment has an Adverse Effect;
(b) TGSS, TGAL or the Fund shall fail to perform or observe any other
material term, covenant or agreement on its part to be performed or
observed under any Program Document following TGSS, TGAL or the Fund's
(as the case may be) actual knowledge thereof or receipt of notice
from LFL, whichever is the earlier;
(c) any representation or warranty made or deemed made by TGSS, TGAL or
the Fund or any of their respective officers or directors under or in
connection with any Program Document shall have been false, incorrect
or misleading in any material respect when made or deemed made and
which gives rise to an Adverse Effect;
(d) any material provision of any Program Document to which TGSS, TGAL or
the Fund is a party shall cease to be a legal, valid and binding
obligation of any such Person enforceable in accordance with its terms
or any such Person shall so assert in writing;
(e) there shall have occurred an Insolvency Event;
(f) FRI shall cease to own, directly or indirectly, at least 80% of the
issued and outstanding equity securities of each of TGSS and TGAL;
(g) there shall have occurred any change (or proposed change as agreed by
the parties hereto) in accounting, governmental or other legislation,
regulation or policy which would have an Adverse Effect;
(h) the termination of the Joint Venture Agreement dated September 11,
1998 as amended respecting LFL among FEP Capital II LLC and TGH
Holdings Limited and LFL pursuant to Article 14 of that agreement; and
(i) a suit, litigation or regulatory proceeding which has a material
adverse effect on the ability of any of the Fund, TGAL or TGSS to
perform or comply with its obligations hereunder.
"LFL Insolvency Event" means any of the following occurrences:
(a) LFL shall generally not pay its obligations as such obligations become
due or shall admit in writing its inability to pay its obligations
generally or shall make a general assignment for the benefit of
creditors; or
(b) any proceeding shall be instituted by or against LFL seeking to
adjudicate it in whole or in part bankrupt or insolvent, or seeking
liquidation, winding-up, court protection, reorganisation,
arrangement, adjustment, protection, relief or composition of it or
its obligations or proposal to its creditors under any laws relating
to bankruptcy, insolvency or reorganisation or relief of debtors or
seeking the entry of an order for relief or the appointment of a
receiver, trustee, examiner, custodian or other similar official for
it or for any substantial part of its property and, in the case of any
such proceedings instituted against it (but not instituted by it),
such proceedings shall remain undismissed or unstayed for a period of
60 days; or
(c) a court or other governmental authority or agency having jurisdiction
in the premises shall enter a decree or order (i) for the appointment
of a receiver, liquidator, examiner, assignee, trustee or sequestrator
(or other similar official) of LFL of any material part of its
property or for the winding up or liquidation of its affairs and such
decree shall remain in force undischarged and unstayed for a period of
60 days; or (ii) for the sequestration or attachment of any material
part of the property of LFL without its unconditional return to the
possession of LFL or its unconditional release from such sequestration
or attachment within 60 days thereafter; or
(d) LFL shall take any action to authorise any of the actions set forth
above.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien or security interest (statutory or other) or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever or other charge or
encumbrance, including the retained security title of a conditional vendor
or lessor.
"Master Trust" means any trust or other special purpose entity or Person to
which any interest in any of the Fees or the right to receive any
Collections with respect thereto has been transferred in connection with a
Takeout Transaction.
"Master Trust Transfer Agreement" means any agreement pursuant to which any
interest in the Fees is transferred to a Master Trust.
"Monthly Fee" means, in respect of each Monthly Pool, a monthly fee equal
to 0.975% (on an annual basis) of the average daily Net Asset Value for
that month of all Distributed and Reinvested Shares and External Shares
forming part of such Monthly Pool divided by twelve.
"Monthly Pool" means, with respect to any Sub-Fund and any calendar month:
(i) each Original Charge Share issued by such Sub-Fund during such
calendar month;
(ii) Transfer Shares of such Sub-Fund issued upon the immediate
reinvestment of proceeds realised on the redemption of (a) an Original
Charge Share of another Sub-Fund issued by such Sub-Fund during the
calendar month described in clause (i) above; (b) a Reinvested Share
(that is not an External Reinvested Share) of another Sub-Fund issued
in respect of Deferred Sales Charge Shares described in clause (ii)(a)
above or this clause (ii)(b); or (c) a Transfer Share of another
Sub-Fund which relates to a Deferred Sales Charge Share described in
clause (ii)(a) or (ii)(b) above or this clause (ii)(c);
(iii)Deferred Sales Charge Shares of such Sub-Fund issued upon the
automatic reinvestment of income and capital gains distributions with
respect to Deferred Sales Charge Shares of such Sub-Fund described in
clauses (i) or (ii) above, or this clause (iii); and
(iv) External Shares or External Reinvested Shares of such Sub-Fund which
are derived (directly or indirectly) from a Deferred Sales Charge
Share formerly included in the Monthly Pool of a New B Share Sub-Fund
whose Sale Cutoff Date occurred in such calendar month,
provided always that each Deferred Sales Charge Share of such Sub-Fund
will be allocated to a Monthly Pool in accordance with the allocation
procedures in Schedule D.
"Multiple Material Errors" means errors in the calculation of amounts due
to and adverse to LFL in excess of 10% of any amounts payable, which errors
occur in excess of three times during the term of this Agreement excluding
any and all errors (other than those caused by bad faith or fraud on the
part of TGSS or TGAL) occurring prior to the first year anniversary date of
this Agreement.
"Net Asset Value" means, with respect to any Sub-Fund or any Share, as of
the date any determination thereof is made, the meaning given to that term
in the Prospectus Documents.
"New B Share Sub-Funds" means, at any time, the Sub-Funds listed in
Schedule C together with any Sub-Funds that have become New B Share
Sub-Funds in accordance with Article 10.
"Original Charge Share" means, in respect of any calendar month, a Deferred
Sales Charge Share issued in that month for which LFL is obligated to pay
the Selling Commission (and the term "Original Charge Share" includes any
Shares issued upon the consolidation or subdivision of an Original Charge
Share).
"Person" means any individual, partnership, limited partnership, joint
venture, syndicate, sole proprietorship, company or corporation, with or
without share capital, unincorporated association, trust, trustee,
executor, administrator or other legal personal representative, regulatory
body or governmental agency, authority or entity, however designated or
constituted.
"Permitted Designee" means (a) any Person designated by LFL or any Master
Trust, as the case may be, which may be The Chase Manhattan Bank, Deutsche
Bank, Bank of New York or Constellation Financial Management Company,
L.L.C. or any Affiliate of the foregoing, or (b) any other Person
designated by LFL or any Master Trust, as the case may be, (i) which is not
actively engaged in the sponsorship or management of any other mutual fund
in the United States, Canada or Europe in the reasonable judgment of TGSS
(such judgment not to be unreasonably withheld or delayed), and (ii) which
has agreed to be bound by confidentiality undertakings in substance
comparable to those contained in this Agreement.
"Program Documents" means this Agreement, the Articles of Incorporation,
the Advisory Agreements, the Prospectus Documents, the Distribution
Agreements, the Material Contracts, any Master Trust Transfer Agreement and
the other agreements, documents, certificates and instruments entered into
or delivered in connection herewith and therewith, as the same may from
time to time be amended, supplemented, waived or modified.
"Prospectus Documents" means, with respect to the Fund and each Sub-Fund,
the most recent prospectus and addenda thereto filed in connection with
registration in Luxembourg as more particularly described in Schedule A
hereto as amended or supplemented from time to time.
"Reinvested Share" means a Deferred Sales Charge Share or any Share issued
upon the automatic reinvestment of income and/or capital gains
distributions upon an Original Charge Share, a Transfer Share or any Share
which has derived directly or indirectly (through reinvestment of income
and/or capital gains) from an Original Charge Share or a Transfer Share
(and the term "Reinvested Share" also includes any Shares issued upon the
consolidation or subdivision of a Reinvested Share) or any Share issued
upon the immediate investment of proceeds realised on the redemption of a
Reinvested Share of a New B Share Fund.
"Sale Cutoff Date" means, with respect to any particular Monthly Pool, the
last Business Day of the calendar month during which LFL arranged for the
payment of commissions of Original Charge Shares forming part of the
Monthly Pool and became obligated to pay the Selling Commissions in respect
of such Monthly Pool.
"Selling Commission" means, in respect of a Deferred Sales Charge Share, 4%
of the Subscription Price of such Deferred Sales Charge Share.
"Sub-Funds" means the sub-funds of the Fund (including, without limitation,
those sub-funds in Schedule C).
"Subscription Price" means with respect to any Deferred Sales Charge Share
at any particular time, the gross purchase price of such Deferred Sales
Charge Share in the applicable currency of the relevant New B Share
Sub-Fund established by the Prospectus Documents.
"Substantial Funds" means, at any time, any New B Share Sub-Fund or group
of New B Share Sub-Funds which, at such time, have an aggregate Net Asset
Value equal to thirty per cent (30%) or more of the total Net Asset Value
of all the New B Share Sub-Funds taken together at such time.
"Takeout Transaction" means any transaction pursuant to which LFL, or any
Master Trust which obtains such interest directly or indirectly from LFL,
sells or otherwise transfers, participates or causes to be sold,
transferred or participated interests in the Fees relating to any New B
Share Sub-Fund (including, without limitation, the right to receive any
portion of any Collections) to any Person, including a Master Trust or a
subsidiary or Affiliate of LFL which publicly or privately sells debt
instruments and/or certificates or other instruments representing ownership
interests in such Master Trust or interest in any Fees (including, without
limitation, any right to receive any portion of any Collections).
"Termination Date" means 30 June 2002, subject to termination or suspension
as set forth in Article 3.1, or such later date as shall be agreed to in
writing by the parties hereto, except that the Termination Date may be
deemed to have occurred on an earlier date pursuant to Article 8.
"Trade Date" means, in respect of the purchase of Deferred Sales Charge
Shares, the relevant Valuation Day of such Shares.
"Transfer Share" means a Deferred Sales Charge Share issued upon the
immediate investment of proceeds realised on the redemption of an Original
Charge Share, or another Transfer Share in a Deferred Sales Charge Share of
another New B Share Sub-Fund provided that the term "Transfer Share"
includes any Deferred Sales Charge Share issued upon the consolidation or
subdivision of a Transfer Share.
"Valuation Day" means a day on which the Fund is accepting subscriptions
for Deferred Sales Charge Shares.
ARTICLE 2
CLOSING ARRANGEMENTS
2.1 THE CLOSING. The transactions contemplated by this Agreement shall be
completed at the Closing Time at the offices of the counsel to LFL or at
such other location as may be agreed to by the parties.
ARTICLE 3
COMMISSION PAYMENT
3.1 APPOINTMENT OF LFL. Upon and subject to the terms and conditions hereof,
the Fund, with the knowledge and consent of TGAL and TGSS as evidenced by
their signatures hereto, hereby appoints LFL as Commission Payer in respect
of the Deferred Sales Charge Shares in any country where it is legal to
distribute the Fund and LFL will pay or procure the payment of Selling
Commissions to Approved Dealers as and from 1 July 1999 up to and including
30 June 2002, subject to suspension and termination at any time in the
circumstances described in this Agreement. Until terminated in accordance
with the terms of this Agreement, LFL will be the exclusive Commission
Payer with respect to such Deferred Sales Charge Shares during the period
described above. It is acknowledged and agreed by the parties hereto that
LFL's obligations do not extend to sales of Shares which are not Deferred
Sales Charge Shares and that LFL shall not receive any remuneration of any
kind in respect of such Shares.
3.2 DISTRIBUTION THROUGH APPROVED DEALERS. LFL will pay the Selling Commissions
based on sales of Deferred Sales Charge Shares only through Approved
Dealers, and LFL will not itself directly or indirectly promote, market or
sell any Shares or accept orders for the purchase of Shares. All Deferred
Sales Charge Shares will be sold at a price equal to the Net Asset Value
per Share at the time of purchase, without a sales charge payable by
investors. TGSS will advise LFL upon the execution hereof and regularly as
required thereafter so long as LFL is entitled hereunder to act as
Commission Payer and receive fees hereunder of the names of all Approved
Dealers through whom the Deferred Sales Charge Shares may be sold.
The Distributors agree not to knowingly accept purchase orders from
Persons with respect to the sale of Deferred Sales Charge Shares in any
jurisdiction in which the Deferred Sales Charge Shares are not registered,
qualified for sale or otherwise exempt from the need to qualify for sale
under applicable securities legislation. In respect of any such purchase
orders which are unknowingly accepted by the Distributors, the Deferred
Sales Charge Shares sold pursuant to such orders will be subject to this
Agreement unless the trade in such Shares is subsequently reversed, in
which case such Deferred Sales Charge Shares shall not be subject to this
Agreement and the Distributors, will forthwith, following the trade
reversal and out of the proceeds of the trade reversal, refund to LFL the
amount of the Selling Commissions paid by it, if any, in respect of such
Shares.
3.3 REJECTION OF PURCHASE ORDERS. Each of the Fund and TGAL may reject purchase
orders for Deferred Sales Charge Shares received from an Approved Dealer
during the term of this Agreement only in accordance with the terms stated
in the Prospectus Documents.
3.4 REGISTRATION OF PURCHASES. After receipt and acceptance of a purchase order
together with an amount equal to the purchase price for each Deferred Sales
Charge Share purchased, TGSS will promptly register the purchaser as a
holder of the purchased Share or Shares and shall deposit the purchase
price to the credit of the Fund.
3.5 SERVICES OF LFL. The primary purpose of this Agreement is to ensure that
satisfactory arrangements exist for the distribution of the Deferred Sales
Charge Shares and to provide a mechanism for the payment of Selling
Commissions to Approved Dealers who distribute Deferred Sales Charge
Shares. Subject to its rights of termination as provided herein, LFL will
provide the following services to the Distributors and the Fund during the
period in which LFL acts as Commission Payer in accordance with Article
3.1:
(a) paying the Selling Commissions in respect of the Deferred Sales Charge
Shares; the parties agree that LFL's obligation to pay the Selling
Commission in respect of a Deferred Sales Charge Share shall arise on
the Trade Date for such Deferred Sales Charge Share, notwithstanding
that LFL is only required to make actual payment of the Selling
Commission in respect of such purchase on the settlement date for such
Deferred Sales Charge Share;
(b) maintaining proper and adequate business records of its operations in
order to properly monitor the Deferred Sales Charge Shares for which
it pays Selling Commissions and the amount of the Selling Commissions
paid; and
(c) providing confirmation to the Distributors and the Fund when requested
as to the due and timely payment of Selling Commissions.
LFL, the Distributors and the Fund acknowledge that the Distributors shall
continue to arrange for the distribution of Deferred Sales Charge Shares
pursuant to the Program Documents and that, except as expressly provided
by this Agreement, LFL shall have no obligation to perform any duties or
functions or make any payments carried out or made by the Distributors.
3.6 DISTRIBUTOR REPORT. On or before 10 Business Days after the end of each
month, TGSS shall provide LFL or a Permitted Designee with a Distributor
Report. The parties agree to finalise as soon as possible and in any event
not later than August 31, 1999 the form of the Distributor Report which is
acceptable to both parties.
ARTICLE 4
PAYMENT OF FEES
4.1 MONTHLY FEE. For its services in paying Selling Commissions on sales of
Original Charge Shares included in a Monthly Pool, the Fund shall pay to
LFL the Monthly Fee in respect of each Monthly Pool and TGAL and TGSS
hereby waive any entitlement they may have, whether under the Program
Documents or otherwise, to each such Monthly Fee payable hereunder.
The Monthly Fee will be accrued daily on each Valuation Day and will be
paid to LFL within ten days after the end of each calendar month. The
Monthly Fee shall continue to be payable to LFL in respect of each Deferred
Sales Charge Share, External Share or External Reinvested Share forming
part of a Monthly Pool for the lesser of (i) the period that such Deferred
Sales Charge Share, External Share or External Reinvested Share remains in
issue; and (ii) the Anniversary of the Sale Cutoff Date, notwithstanding
that LFL's appointment as exclusive Commission Payer has expired or has
been suspended or terminated.
4.2 DEFERRED SALES CHARGES. Each of TGAL, TGSS and the Fund represents and
warrants to LFL that a Deferred Sales Charge applies to all Distributed
Shares of a New B Share Sub-Fund and all External Shares which are redeemed
within five years of their date of issue, or deemed date of issue, except
on redemptions where the redemption proceeds realised are immediately
invested in Distributed Shares of one or more of the other New B Share
Sub-Funds or in External Shares). Each of TGAL, TGSS and the Fund further
represents and warrants to LFL that the Deferred Sales Charge, expressed as
a percentage of the lower of the current Net Asset Value or the issue price
when purchased per Distributed Share or External Share being redeemed,
declines over time from the date of issue, or deemed date of issue, of the
Distributed Share or External Share as follows:
If Redeemed During the Following Deferred Sales
Periods After the Date of Charge
ISSUE OR DEEMED DATE OF ISSUE PERCENTAGE
During the 1st year 4.0%
During the 2nd year 3.0%
During the 3rd year 2.0%
During the 4th year 1.0%
During the 5th year 1.0%
Thereafter Nil
Each of TGAL, TGSS and the Fund represents and warrants to LFL that, for
the purpose of calculating the Deferred Sales Charge payable to LFL,
Deferred Sales Charge Shares will be redeemed in the following order:
(a) Reinvested Shares will be redeemed first; and
(b) Distributed Shares (or External Shares derived therefrom) of a
Sub-Fund issued first, or deemed to be issued first, will be redeemed
second.
In the event of the termination of any Sub-Fund, LFL shall be entitled to
receive any applicable Deferred Sales Charges in respect of the
outstanding Distributed Shares or External Shares of that Sub-Fund unless
such Shares become Transfer Shares or External Shares of another Sub-Fund.
Notwithstanding the foregoing provisions, LFL agrees and accepts that, if
at any time, the Luxembourg supervisory authority compels the Fund not to
levy any Deferred Sales Charge as a result of, inter alia, material
changes to or liquidation or merger of Sub-Funds or for whatsoever other
reason, the Fund will not be liable for the payment of any Deferred Sales
Charge which would otherwise normally be payable.
4.3 DEFERRED SALES CHARGE PAYMENTS. In addition to the Monthly Fee payable to
LFL pursuant to Article 4.1 and in consideration for its services
hereunder, LFL shall also be entitled to receive any Deferred Sales Charge
paid by shareholders on the redemption of their Distributed Shares or
External Shares. The Deferred Sales Charges will be calculated and
collected by TGSS, its successors or assigns in its capacity as
Distribution Controller for the Fund on each Valuation Day and will be
payable by the Fund to LFL monthly within ten days after the end of the
calendar month or in the event of termination of a Sub-Fund, immediately
prior to the termination of the Sub-Fund. Such amount shall continue to be
payable to LFL on the redemption of each Distributed Share and each
External Share notwithstanding that (a) LFL's appointment hereunder as
exclusive Commission Payer has been suspended, has expired or has been
terminated or b) TGAL or TGSS has been terminated as the Fund's Principal
Distributor or Distribution Controller, respectively.
4.4 FREE REDEMPTIONS
In addition to all other amounts payable to LFL pursuant to this
Agreement, promptly following each Free Redemption the Fund or the
Distributors or both of them shall pay to LFL an amount equal to the
maximum Deferred Sales Charge that would have been payable in connection
with such redemption if such redemption had not been a Free Redemption.
4.5 RIGHT OF ACTION
(a) The Fund hereby irrevocably and unconditionally authorises and
instructs TGAL and TGSS to take all necessary steps to recover
(whether by legal proceedings or otherwise) any amounts which may
become due and owing by a shareholder to the Fund in respect of
Deferred Sales Charges (including by withholding or deducting such
amounts from any amounts payable by the Fund to such a shareholder).
TGAL and TGSS hereby undertake to keep the Fund advised of any actions
they may take pursuant to this provision.
(b) Each of TGSS and TGAL hereby covenants, in favour of LFL and the Fund,
that it will diligently take all steps reasonably necessary to recover
and pay to LFL any such amounts as referred to in (a) above which are
payable to LFL.
(c) LFL agrees and acknowledges that its only right of action in the event
of non-payment of the Fees shall be against the Fund and the assets of
the Fund attributable to the relevant Sub-Fund in relation to which
the relevant Fees are due and LFL further agrees and acknowledges that
LFL shall have no recourse against the assets of the Distributors or
other Sub-Funds for such non-payment of the Fees.
4.6 COLLECTION ACCOUNT. All Collections payable by the Fund are to be deposited
directly by or on behalf of the Fund into the Collection Account without
any intermediate commingling of such amounts with the assets of the
Distributors or any Affiliate of either of them. No amounts other than the
Collections shall be deposited to the Collection Account.
4.7 ACCRUAL OF LFL'S ENTITLEMENT TO FEES
Notwithstanding any other provision of this Agreement, the parties hereto
acknowledge and agree that LFL's entitlement to receive Monthly Fees in
respect of a Deferred Sales Charge Share shall accrue at the same time as
the obligation of LFL to pay, the Selling Commission in respect of that
Deferred Sales Charge Share. LFL's entitlement to receive the Deferred
Sales Charge payable by a shareholder on the redemption of a Distributed
Share shall accrue at the same time as the obligation of LFL to pay, in
respect of that Deferred Sales Charge Share, the Selling Commission in
respect of (i) (where such Distributed Share is an Original Charge Share)
that Distributed Share or (ii) (where such Distributed Share is a Transfer
Share) the Original Charge Share to which such Distributed Share relates.
4.8 MATERIAL ERRORS
If Multiple Material Errors occur, LFL shall provide TGSS with written
notice of such occurrence, following which TGSS shall have 60 days to cure
such errors during which period LFL shall have the right to suspend its
obligation to pay Selling Commissions. If such breach continues uncured,
at the expiration of such notice period, LFL may give a second written
notice to the Fund declaring that the Termination Date has occurred (in
which case the Termination Date shall be deemed to have occurred on the
date such second notice is given), provided that if such Multiple Material
Errors occur only in respect of a New B Share Sub-Fund or New B Share
Sub-Funds which are not Substantial Funds (in either case), LFL may only
terminate its obligations in respect of such Sub-Fund or Sub-Funds (as the
case may be). Where LFL terminates its obligations in respect of a New B
Share Sub-Fund or New B Share Sub-Funds which are not Substantial Funds
(in either case) then the Fund, TGAL, or TGSS shall either (i) take such
actions as LFL may reasonably request so as to preserve the economic
return to LFL in respect of such terminated Sub-Fund or Sub-Funds (so that
LFL receives a return equal to the return it would have received had such
Multiple Material Errors not occurred); or (ii) demonstrate to LFL that it
can accurately track the relevant New B Shares of such terminated
Sub-Fund. In the event that such errors are cured within the 60 day
period, then LFL shall promptly pay all Selling Commissions in respect of
the sales of Deferred Sales Charge Shares which occurred during such
period.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 DISTRIBUTORS AND FUND'S REPRESENTATIONS AND WARRANTIES. Except where
otherwise indicated, each of TGSS, TGAL and the Fund represents and
warrants to LFL:
(a) ORGANISATION - It has been duly incorporated or created, as the case
may be, and is organised, validly existing and up-to-date in all
material filings and registrations required under the laws of
Luxembourg, the Commonwealth of the Bahamas (in the case of TGAL) and
each country where such filings or registrations are necessary for the
conduct of its business, and it has all necessary power, authority and
capacity to own its properties and assets and to carry on the business
in which it is now engaged.
(b) DISTRIBUTION OF NEW B SHARES - The New B Shares are offered for sale
to the public on a continuous basis pursuant to the Prospectus
Documents. All material information and statements contained in the
Prospectus Documents with respect to the New B Shares are true and
correct in all material respects and contain no material
misrepresentation.
(c) COMPLIANCE WITH LAWS - It is in compliance in all material respects
with all applicable laws, including but not limited to, applicable
securities laws.
(d) LICENSES AND REGISTRATIONS - It has received all approvals, licences,
registrations and authorisations necessary for the conduct of its
businesses as they are now conducted, all of which are in full force
and effect; no violations thereof have been recorded; and no
proceeding is pending or threatened which could result in the
revocation or limitation thereof.
(e) INVESTMENT ADVISER COMPLIANCE - To the best of the Distributors'
knowledge, after due inquiry, each of the investment advisers
appointed in respect of the New B Share Sub-Funds has complied with
the investment objectives, policies and restrictions of such New B
Share Sub-Funds as provided in the Articles of Incorporation, the
Advisory Agreements and the Prospectus Documents.
(f) CONSENTS AND APPROVALS - There are no consents, approvals, orders or
authorisations of any Person or registrations, declarations, notices,
filings or recordings with any Person required to be obtained or made
by it (and which have not been so obtained or made) in connection with
the transactions contemplated by this Agreement, the execution and
delivery of this Agreement or the performance by the Fund, TGSS or
TGAL of any of the terms and conditions of this Agreement.
(g) FINANCIAL STATEMENTS - The financial statements of the Fund have been
prepared in accordance with GAAP and present fairly the financial
position of the Fund as of the respective dates thereof and the
changes in the Fund's net assets for the period covered by those
statements and the treatment of management fees, legal, audit,
custodian, safekeeping fees, interest, operating and administrative
costs payable by the Fund.
(h) ABSENCE OF UNDISCLOSED LIABILITIES - Except to the extent reflected or
reserved against in the financial statements of the Fund or otherwise
disclosed herein or except as incurred in the ordinary course of the
business of the Fund, the Fund has no outstanding indebtedness or any
liabilities or obligations (whether direct or indirect, current or
long-term, accrued, absolute, contingent or otherwise).
(i) TAX MATTERS - The Fund is not in default in filing any tax returns or
reports required to be filed as of the date of this Agreement covering
any relevant national, provincial, municipal or local taxes,
assessments or other imposts in respect of its capital, income,
business or property (where such default could have an Adverse
Effect).
(j) LITIGATION - There is no suit, action, litigation, inquiry,
investigation, arbitration or proceeding, including appeals and
applications to review, in progress or, to its knowledge, threatened
or pending against or relating to it or affecting its properties or
businesses which could have an Adverse Effect. There is not presently
outstanding against it any judgement, decree, injunction, rule or
order of any court, governmental department, commission, agency,
instrumentality or arbitrator which could have an Adverse Effect.
(k) ACCURACY OF BOOKS AND RECORDS - The books and records, financial and
otherwise, of the Fund fairly and correctly set out and disclose in
all material respects the financial position of the Fund as of the
date of this Agreement and all material transactions have been
accurately recorded in those books and records.
(l) ACCURACY OF INFORMATION PROVIDED - To the best of its knowledge, all
information provided by or on behalf of the Distributors, the Fund,
FRI or its Affiliates to LFL or any agent thereof for purposes of or
in connection with this Agreement or the transactions contemplated by
this Agreement is true, correct and complete in all material respects.
(m) DUE AUTHORISATION, EXECUTION AND DELIVERY - This Agreement has been
duly authorised, executed and delivered by it and the obligations
expressed to be assumed by it in this Agreement are legal and valid
obligations binding on it and enforceable against it in accordance
with the terms hereof, subject, however, to limitations with respect
to enforcement imposed by law in connection with bankruptcy or similar
proceedings and to the extent that equitable remedies, such as
specific performance and injunction, are in the discretion of the
court from which they are sought.
(n) ABSENCE OF CONFLICTING AGREEMENTS - It is not a party to, bound or
affected by or subject to any indenture, mortgage, lease, agreement,
instrument, charter or by-law provision, statute, regulation order,
judgement, decree or law which would be violated, contravened or
breached by or under which any default would occur as a result of the
execution and delivery of this Agreement or the performance of any of
the terms of this Agreement or which could have an Adverse Effect.
(o) MATERIAL CONTRACTS - Except for the Material Contracts it is not a
party to or bound by any presently existing oral or written contracts
or a commitment which is material in respect of this Agreement and the
transactions contemplated herein. The Material Contracts are in
compliance in all material respects with applicable law, are in full
force and effect, unamended, and no material default exists in respect
of any of them on the part of any of the parties and there exists no
set of facts which, after notice or lapse of time or both, would
constitute such material default. It has the capacity to perform all
its respective obligations in the Material Contracts. Each of the
Material Contracts has been duly executed by it and constitutes a
valid and binding obligation of it enforceable against it in
accordance with the terms thereof, free and clear of any mortgage,
pledge, lien, charge, security interest or encumbrance or rights of
others.
(p) NO SECURITY AGREEMENT - To the best of the knowledge of the
Distributors, no security agreement, equivalent security or lien
instrument or any financing statement, has been entered into or is on
file or on record in respect of the Deferred Sales Charges (or any
part thereof) in any jurisdiction.
(q) PRINCIPAL PLACE OF BUSINESS, NAME - Its principal place of business
and the place where its records are kept is at the address first
written above or such other address of which LFL has received notice
pursuant to Article 11.6.
(r) INSOLVENCY - Since 1 July, 1999, there has not occurred an Insolvency
Event with respect to the Fund, TGSS or TGAL.
(s) INFORMATION CORRECT - All information in respect of the payment of
Selling Commissions to be set forth in each Distributor Report will be
true and correct in all material respects (this warranty shall be
given by TGSS and its successors or assigns only).
(t) REGISTRATION OF FUND - The Fund continues to be registered as (and
qualify as) a societe d'investissement a capital variable,
incorporated under the laws of the Grand-Duchy of Luxembourg.
(u) ROLE OF TGAL AND TGSS - TGAL shall be the Principal Distributor in
accordance with the Distribution Agreement and TGSS shall be the
Distribution Controller in accordance with the Distribution Controller
Agreement.
Each of the representations and warranties contained in this Article 5.1
are made severally by TGSS, TGAL and the Fund (each a "Representing Party")
and accordingly, a Representing Party shall not be responsible to LFL for
any misrepresentation on the part of another Representing Party.
5.2 LFL'S REPRESENTATIONS AND WARRANTIES. LFL hereby represents and warrants to
TGSS, TGAL and the Fund that:
(a) ORGANISATION AND GOOD STANDING - LFL has been duly formed and
organised as a limited liability company incorporated in Ireland and
has all necessary power, authority and capacity to own its property
and assets and to carry on the business in which it is now engaged.
(b) AUTHORISATION, EXECUTION AND DELIVERY - This Agreement has been duly
authorised, executed and delivered by LFL and is a valid and binding
obligation of LFL enforceable in accordance with its terms, subject,
however, to limitations with respect to enforcement imposed by law in
connection with bankruptcy or similar proceedings and, to the extent
that equitable remedies such as specific performance and injunction
are in the discretion of the court from which they are sought.
(c) ABSENCE OF CONFLICTING AGREEMENTS - LFL is not a party to, bound or
affected by or subject to any indenture, mortgage, lease, agreement,
instrument, charter or by-law, provision, statute, regulation, order,
judgement, decree or law which would be violated, contravened or
breached by, or under which any default would occur as a result of,
the execution and delivery by it of this Agreement or the performance
by it of any of the terms of this Agreement.
(d) LITIGATION - There is no suit, action, litigation, inquiry,
investigation, arbitration or proceeding, including appeals and
applications to review in progress, pending or threatened against or
relating to LFL or affecting its property or business which may
materially adversely affect its property, business, future prospects
or financial condition or which could materially adversely affect the
performance or obligations of LFL under, or the validity or
enforceability of this Agreement or which could give rise to any
adverse effect on LFL's ability to pay or perform any of its material
obligations under this Agreement.
(e) COMPLIANCE WITH LAWS - It is in compliance in all material respects
with all laws that are applicable to it.
(f) LICENSES AND REGISTRATIONS - It has received all approvals, licences,
registrations and authorisations necessary for the conduct of its
businesses as they are now conducted, all of which are in full force
and effect; no violations thereof have been recorded; and no
proceeding is pending or threatened which could result in the
revocation or limitation thereof.
(g) CONSENTS AND APPROVALS - There are no consents, approvals, orders or
authorisations of any Person required under laws applicable to it or
registrations, declarations, notices, filings or recordings with any
Person required to be obtained or made by it pursuant to laws
applicable to it (and which have not been so obtained or made) in
connection with the transactions contemplated by this Agreement, the
execution and delivery of this Agreement or the performance of any of
the terms and conditions of this Agreement.
(h) INSOLVENCY - Since July 1, 1999, there has not occurred an LFL
Insolvency Event.
5.3 NON-WAIVER. No investigation made by or on behalf of any party at any time
shall have the effect of waiving, diminishing the scope of or otherwise
affecting any representation or warranty made by any other party in or
pursuant to this Agreement. No waiver by any party of any condition, in
whole or in part, shall operate as a waiver of any other condition.
5.4 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements
contained in any certificate or other document delivered by or on behalf of
a party pursuant to or in connection with the transactions contemplated by
this Agreement shall be deemed to be made by that party under this
Agreement.
All representations and warranties, covenants and agreements on the part
of each of the parties contained in this Agreement or in any certificate
or other document delivered pursuant to this Agreement shall survive the
Closing and shall survive for the duration of this Agreement.
ARTICLE 6
CONDITIONS PRECEDENT
6.1 LFL'S CONDITIONS TO CLOSING. The obligation of LFL to complete the
transactions contemplated by this Agreement shall be subject to the
satisfaction of, or compliance with, at or before the Closing Time, each of
the following conditions precedent (each of which is acknowledged to be
inserted for the exclusive benefit of LFL and may be waived by it in whole
or in part by notice in writing to TGSS, TGAL and the Fund):
(a) TRUTH AND ACCURACY OF REPRESENTATIONS AND WARRANTIES OF THE
DISTRIBUTORS AND THE FUND AT CLOSING TIME - All the representations
and warranties of the Distributors and the Fund made in or pursuant to
this Agreement shall be true and correct in all material respects as
at the Closing Time and with the same effect as if made at and as at
the Closing Time. LFL shall receive a certificate from TGSS, TGAL and
the Fund confirming the truth and correctness in all material respects
of the representations and warranties of the each of them.
(b) RECEIPT OF CLOSING DOCUMENTATION - All documentation relating to the
transactions contemplated by this Agreement, including legal opinions
from counsel to the Distributors and the Fund, shall be satisfactory
to LFL and its counsel, both acting reasonably. LFL shall receive
copies of all documentation or other evidence it may reasonably
request in order to establish the consummation of the transactions
contemplated by this Agreement and the taking of all corporate
proceedings and action in connection with this Agreement in compliance
with these conditions in form (as to certification and otherwise) and
substance satisfactory to LFL and its counsel.
(c) MATERIAL ADVERSE CHANGE - Since September 30, 1998, no material
adverse change in the condition or operations of the business, assets
or financial condition of the Fund shall have occurred including any
change in the fundamental investment objective of a Sub-Fund, and no
Adverse Effect shall have occurred.
(d) PERFORMANCE OF OBLIGATIONS - The Distributors and the Fund shall have
performed or complied with, in all respects, all obligations,
covenants and agreements in this Agreement to be performed or complied
with by the Closing Time.
(e) CONSENTS, AUTHORISATIONS AND REGISTRATIONS - All consents, approvals,
orders and authorisations of any Person required in connection with
the completion of any of the transactions contemplated by this
Agreement, the execution of this Agreement, the Closing or the
performance of any of the terms and conditions of this Agreement shall
have been obtained at or before the Closing Time.
(f) ROLE OF TGAL AND TGSS - At the date of this Agreement and at the
Closing Time, TGAL shall be the Principal Distributor in accordance
with the terms of the Distribution Agreement and TGSS shall be the
Distribution Controller in accordance with the terms of the
Distribution Controller Agreement.
(g) EVENT OF TERMINATION - The condition set out in Article 6.2(c) shall
be satisfied.
6.2 LFL'S CONDITIONS TO PAYMENT OF SELLING COMMISSIONS FROM TIME TO TIME. The
obligation of LFL to pay Selling Commissions under this Agreement from time
to time shall be subject to the satisfaction of, or compliance with, each
of the following conditions precedent (each of which is acknowledged to be
inserted for the exclusive benefit of LFL and may be waived by it in whole
or in part by notice in writing to TGAL, TGSS and the Fund) at each such
time:
(a) TRUTH AND ACCURACY OF REPRESENTATIONS AND WARRANTIES OF THE
DISTRIBUTORS AND THE FUND - The representations and warranties of the
Distributors and the Fund made in or pursuant to this Agreement shall
be true and correct in all material respects as of the time of payment
of such Selling Commissions and with the same effect as if made at the
time of payment of such Selling Commissions.
(b) ROLE OF TGAL AND TGSS - TGAL shall be the Principal Distributor in
accordance with the terms of the Distribution Agreement and TGSS shall
be the Distribution Controller in accordance with the terms of the
Distribution Controller Agreement.
(c) EVENT OF TERMINATION - Both immediately before and immediately after
giving effect to the payment of a Selling Commission on such date by
LFL, no LFL Event of Termination (or event which, with the passage of
time or the giving of notice, or both, would constitute an LFL Event
of Termination) in respect of TGAL, TGSS or the Fund shall have
occurred and be continuing.
(d) DISTRIBUTOR REPORTS - TGSS shall have delivered all Distributor
Reports required to be delivered on or prior to such date pursuant to
this Agreement, which shall be in form and substance reasonably
satisfactory to LFL or its Permitted Designee.
(e) PERFORMANCE OF OBLIGATIONS - The Distributors and the Fund shall have
performed or complied with, in all material respects, all obligations,
covenants and agreements in this Agreement to be performed or complied
with by each of them.
The delivery of a Distributor Report from time to time shall constitute a
representation and warranty by TGSS that, on the date of such delivery,
the conditions set forth in Article 6.2 have been fulfilled, except as
specifically agreed to in writing by LFL.
6.3 DISTRIBUTOR AND FUND CONDITIONS. The obligations of the Distributors and
the Fund to complete the transactions contemplated by this Agreement shall
be subject to the satisfaction of, or compliance with, at or before the
Closing Time, each of the following conditions precedent (each of which is
acknowledged to be inserted for the exclusive benefit of the Distributors
and the Fund and may be waived by all of them in whole or in part by notice
in writing to LFL):
(a) TRUTH AND ACCURACY OF REPRESENTATIONS OF LFL AT CLOSING TIME - All the
representations and warranties of LFL made in or pursuant to this
Agreement shall be true and correct in all material respects as at the
Closing Time with the same effect as if made at and as at the Closing
Time.
(b) PERFORMANCE OF OBLIGATIONS - LFL shall have performed or complied
with, in all material respects, all obligations, covenants and
agreements in this Agreement to be performed or complied with by the
Closing Date.
(c) MATERIAL ADVERSE EFFECT - As of December 31, 1998 no material adverse
change in the condition or operation of the business, assets or
financial condition of LFL shall have occurred which would adversely
affect its ability to pay or to perform its obligations under this
Agreement.
(d) CONSENTS, AUTHORISATIONS AND REGISTRATIONS - All consents, approvals,
orders and authorisations of any Person or government authority
required in connection with the contemplation of any of the
transactions contemplated by this Agreement, the execution of this
Agreement, the closing or performance of any of the terms and
conditions of this Agreement shall have been obtained on or before the
Closing Time.
(e) FINANCIAL CAPABILITY - LFL shall have the financial capability and
resources to perform its obligations under this Agreement, including
the payment of all Selling Commissions due to Approved Dealers
pursuant to Article 4 hereof provided always that in the event that
this condition (e) is not satisfied because LFL is in the process of
being wound-up or has otherwise ceased to carry on its businesses (or
where the LFL Event of Termination set out in paragraph (g) of that
definition occurs) then in any such case, the Fund and each
Distributor acknowledges and agrees that it shall not be entitled to
take any action (whether by way of court proceedings or otherwise)
against LFL arising out of the failure to satisfy this condition (e).
6.4 DOCUMENTS TO BE DELIVERED TO LFL. TGSS shall procure that the documents
listed in Schedule E (which shall be in form and substance satisfactory to
TGSS and LFL) are delivered to LFL within 30 days of the date hereof.
ARTICLE 7
COVENANTS
7.1 COVENANTS OF THE DISTRIBUTORS AND THE FUND. Each of the Distributors and
the Fund covenants and agrees (but only as to itself) with LFL to the
extent applicable that prior to the termination of this Agreement:
(a) COMPLIANCE WITH ADVISORY AGREEMENTS - Each of the Distributors shall
conduct annual reviews with each investment advisor under the Advisory
Agreements in order to ensure that such investment advisor has kept in
full force and effect and intends to keep in full force and effect,
all licences, registrations and authorisations necessary to conduct
its respective business under the applicable terms in the relevant
Advisory Agreement.
(b) TERMINATION OF A NEW B SHARE SUB-FUND - Each of the Distributors and
the Fund shall not, unless compelled to do so (i) by any competent
regulatory authority; or (ii) pursuant to any applicable law, at any
time while LFL is entitled to receive payment of any amount hereunder,
take any action, omit to take any action or initiate any proceeding
which may, indirectly or directly, trigger the termination,
reorganisation or winding-up of a New B Share Sub-Fund if such
termination, reorganisation or winding-up has an Adverse Effect
without the prior consent of LFL, such consent not to be unreasonably
withheld.
(c) MAINTENANCE OF BOOKS AND RECORDS - Each of the Distributors and the
Fund shall keep proper books and records in accordance with normal
business practice in which full and appropriate entries shall be made
of all transactions in relation to its business activity which relate
in any manner to the transactions contemplated by this Agreement.
(d) DISCLOSURE OF MATERIAL CHANGES - Each of the Distributors and the Fund
(upon becoming aware thereof) shall promptly give written notice to
LFL of (i) any LFL Event of Termination or event which, with the
passage of time or the giving of notice or both, would constitute an
LFL Event of Termination; (ii) any material litigation or proceedings
with respect to TGSS, TGAL, any investment adviser of any of the
Sub-Funds or the Fund or any of their respective assets or properties
which, if adversely determined, could give rise to an Adverse Effect;
(iii) the failure of any representation or warranty of any of the
Distributors or the Fund contained in this Agreement to be true and
correct in all material respects as of the date given; or (iv) the
failure of any of the Distributors or the Fund to perform any
obligation which is required to be performed by it under this
Agreement in any material respect on a timely basis; and (v) any
material change in the management or structure of the Fund.
(e) FURTHER INSTRUMENTS AND DOCUMENTS - Each of the TGSS, TGAL and the
Fund shall promptly at its expense execute and deliver to LFL such
further instruments and documents and take such further action as LFL
may from time to time reasonably request in order to further carry out
the intent and purpose of this Agreement and to establish and protect
the rights, interests and remedies created or intended to be created
hereby and thereby, provided however, that TGSS, TGAL and the Fund
shall not be obligated to execute and deliver such further instruments
and documents if they would thereby incur any material obligations or
liabilities not contemplated by this Agreement.
(f) RIGHTS OF INSPECTION - Each of TGSS, TGAL and the Fund shall permit
LFL or any Permitted Designee reasonably acceptable to it to visit and
inspect the properties, files, books and records of the Fund (other
than those subject to confidentiality rules under Luxembourg laws),
TGAL and TGSS relating to the Fees, this Agreement, the transactions
contemplated hereby and the financial condition, results of operations
and cash flows of the Fund and to discuss the foregoing with the
officers, partners, employees, legal advisers and accountants of the
Fund, TGAL and TGSS, all at such reasonable times during reasonable
business hours and as often as LFL may reasonably request.
(g) MAINTENANCE OF PROSPECTUS - Insofar as reasonably within their
respective control and except with the consent of LFL, such consent
not to be unreasonably withheld or delayed, each of the Fund and the
Distributors shall maintain the Prospectus Documents in full force and
effect so that the Deferred Sales Charge Shares may be offered for
sale to the public in the relevant jurisdictions where such Shares are
being sold during the period in which LFL has the obligation to pay
Selling Commissions in respect of the distribution of Deferred Sales
Charge Shares hereunder.
(h) DELIVERY OF LENDER NOTICES - The Distributors and the Fund shall
deliver to LFL a copy of all notices or waivers of default, delivered
by any lenders to the Fund and of all agreements and amendments
entered into with such lenders.
(i) CHANGE TO INVESTMENT OBJECTIVE OF A NEW B SHARE SUB-FUND - In the
event that the investment objective of a New B Share Sub-Fund is
amended (or will be amended) and such amendment will have a material
adverse effect upon (a) the timing or amount of any payment of any
Fee, (b) the timely receipt by LFL of any Fees, (c) the ability of the
Fund, TGAL or TGSS to pay or perform its obligations hereunder in a
timely manner or (d) the remedies and other rights of LFL under this
Agreement, then each of TGSS, TGAL and the Fund agree (subject to
approval by the Luxembourg supervisory authority) to consult in good
faith with LFL for a period of 60 days from the time that LFL is
notified of such amendment or potential amendment with a view to
reaching agreement on a method of amending the Monthly Fee payable to
LFL under this Agreement (or otherwise amending or varying the terms
of the agreements between them and LFL) in order to preserve the
economic return to LFL as if such amendment had not occurred (or were
not to occur, in the case of a potential amendment).
(j) PAYMENT OF FUNDS - If either TGAL or TGSS or any designee or agent
thereof shall receive any of the Fees from the Fund, it shall hold (or
procure that such designee or agent holds) such Fees in trust for LFL
(acknowledging that such Fees do not constitute its property) and
immediately following receipt of any such Fees, it shall, or shall
cause such designee or agent to, remit the same to LFL in the form
received and ensure that such amounts are not commingled with other
funds.
(k) PROVISION OF INFORMATION - All information provided by or on behalf of
TGSS, TGAL or the Fund including information provided by FRI or one of
its Affiliates after the date hereof to LFL or any Permitted Designee
for purposes of or in connection with this Agreement, or the
transactions contemplated hereby, will be true, correct and complete
in all respects material to the Fees and the transactions contemplated
by this Agreement, provided that this covenant shall apply only to
such misrepresentations or omissions as would give rise to an Adverse
Effect.
(l) STATUS OF FEES - Except to the extent expressly permitted by this
Agreement, none of TGSS, TGAL or the Fund shall permit to exist any
Lien on or attempt to transfer or grant a security interest in any
interest in any Fees.
(m) FEE PAYMENT BY THE FUND - If at any time after the date of this
Agreement an Insolvency Event occurs or TGAL (or its Affiliate) ceases
to be the Principal Distributor or TGSS (or its Affiliate) ceases to
be the Distribution Controller, the Fund agrees that as and from such
date the Fund shall continue to be responsible for and shall continue
to pay to LFL the amounts required to be paid by the Fund to LFL under
this Agreement and the Fund shall cause the successor Distribution
Controller or Principal Distributor, as appropriate, to become a party
to this Agreement and (if requested by LFL) to agree to become
responsible for the payment of amounts payable to LFL hereunder.
(n) MAINTENANCE OF FEES - Other than to permit Free Redemptions or Free
Exchanges as contemplated by the Prospectus Documents of the relevant
Sub-Fund on the date hereof, each of the Fund, TGSS and TGAL hereby
agrees with LFL that it will not, without the prior written consent of
LFL, unless compelled to do so (i) by any competent regulatory
authority or (ii) pursuant to any applicable law, at any time while
LFL is entitled to receive payment of any amount hereunder, consent to
or agree to a reduction in the Deferred Sales Charge for Distributed
Shares or any alteration in the manner or as to the time of
calculation of the Deferred Sales Charge or effect any action,
amendment or change of any nature whatsoever if the effect of such
reduction, alteration, action, amendment or change would be to reduce
the amounts payable to LFL or adversely affect the timing of the
receipt of such amounts payable pursuant to Article 4. For the
avoidance of doubt, the provisions of this Article 7.1(n) restrict the
ability of Fund, TGSS and TGAL to make retroactive changes (including
changes in respect of New B Shares which have already been issued) but
will not prevent any of them from making prospective changes in
respect of the offering of New B Shares which are not Transfer Shares,
Reinvested Shares and with respect to which LFL has no obligation to
pay Selling Commissions.
(o) PAYMENT OF TAXES - Each of the Distributors and the Fund shall cause
to be paid and discharged all taxes, assessments and other charges or
levies of any authority imposed upon it or upon any of its income or
assets, prior to the day on which penalties are attached thereto, if
the failure to pay and discharge such tax assessment or other charges
or levies could give rise to an Adverse Effect.
(p) CLIENT AND NEW B SHARE SUB-FUND REPORTING - TGSS shall provide
shareholder and portfolio reporting to LFL. Shareholder reporting will
consist of the administration package of reports on monthly
shareholder activity derived from the Fund's transfer agent's system.
Portfolio reporting will consist of a monthly balance sheet (statement
of condition) inclusive of price and shares (with CUSIP and/or SIDOL
numbers) reported to LFL in respect of each New B Share Sub-Fund
separately. The portfolio reports shall be in substantially the same
form as those currently generated by TGSS's accountants daily,
provided always that TGSS shall not be required to provide any
information to LFL under this Article where such provision would, in
the reasonable opinion of TGSS, be in breach of any applicable laws of
Luxembourg relating to data protection.
7.2 COVENANT OF LFL. LFL covenants and agrees with each of TGSS, TGAL and the
Fund to the extent applicable that prior to the termination of this
Agreement it will provide such information as each of them may reasonably
request from time to time.
7.3 COMPLIANCE WITH LUXEMBOURG LAW. Nothing contained in Article 7.1 shall
prevent the Fund from acting (a) in accordance with the terms of future
instructions from the Luxembourg supervisory authorities or (b) where
compelled to do so pursuant to the Articles of Incorporation or any
applicable law or (c) in accordance with the terms of any resolution of the
shareholders of the Fund (where such resolution has been proposed by a
shareholder or shareholders in either case not affiliated with any of the
parties hereto).
ARTICLE 8
TERMINATION EVENTS
8.1 LFL TERMINATION EVENTS. The obligation of LFL to pay the Selling
Commissions pursuant to Article 3 may be terminated by LFL if an LFL Event
of Termination shall occur and be continuing. Such termination shall be
effected by the giving of written notice to the Fund and each of the
Distributors, declaring an LFL Event of Termination to have occurred (in
which case the Termination Date shall be deemed to have occurred as of the
date such notice is given pursuant to the provisions of Article 11.6)
provided that upon the occurrence of any event (without the requirement for
the passage of time or the giving of notice, or both) described in Articles
(e) and (h) of the definition of LFL Event of Termination, the Termination
Date shall be deemed to have automatically occurred;
and provided further that, in the case of the occurrence of an event
described in Articles (a), (b), (c), (d) and (i) if (1) such event affects
only New B Share Sub-Funds which are not Substantial Funds, and (2) EITHER
the Fund and/or the Distributors or either of them is able to segregate
the Deferred Sales Charges related to Shares affected by such event
(including any Shares of other Sub-Funds into which such Shares may have
been exchanged in Free Exchanges) in respect of which LFL has not paid
Selling Commissions from the Deferred Sales Charges related to Shares of
the affected New B Share Sub-Funds and any unaffected New B Share
Sub-Funds in respect of which LFL has paid Selling Commissions (and any
Shares of any other Sub-Funds into which such New B Shares may be
exchanged in Free Exchanges) and the Fund's ability to segregate the
Deferred Sales Charges as described in above is certified to LFL by an
independent accounting firm of international standing, reasonably
acceptable to LFL, OR the Fund, the Distributors and LFL reach agreement
upon an allocation procedure which will preserve the economic return to
LFL (as if such event had not occurred), THEN such Event of Termination
will only relate to LFL's obligations hereunder related to the affected
New B Shares Fund(s), and such Event of Termination will not affect LFL's
obligations hereunder with respect to the unaffected New B Share
Sub-Funds;
and provided further that upon the occurrence of any event described in
Articles (d) and (i) of the definition of LFL Event of Termination, the
Termination Date shall be deemed to have occurred as of the date which is
six (6) months from the date such notice is effective pursuant to the
provisions of Article 11.6; and The parties agree that upon the occurrence
of any event described in Articles (d), and (i) of the definition of an
LFL Event of Termination, the parties shall use their respective
commercially reasonable efforts during such six (6) month period to
restructure the distribution arrangements contemplated by the Program
Documents in order to attempt to accommodate and facilitate the
continuance of such arrangements notwithstanding such change.
8.2 FUND TERMINATION RIGHTS.
(a) Provided that a LFL Event of Termination has not occurred and is
continuing, LFL's role as exclusive Commission Payer with respect to
the Deferred Sales Charge Shares under this Agreement may be
terminated by the Fund if LFL fails to pay Selling Commissions
pursuant to Article 3 and such failure is continuing. Such termination
shall be effective by the giving of written notice to LFL by the Fund
giving LFL 15 Business Days to cure such breach during which period
the Fund shall not have any right to terminate LFL's role as exclusive
Commission Payer. If such breach continues uncured, at the expiration
of such notice period, the Fund may give a second written notice to
LFL declaring that the Termination Date has occurred (in which case a
Termination Date shall be deemed to have occurred on the date such
second notice is given).
(b) If a Fund Event of Termination shall occur and be continuing, TGSS
shall promptly notify LFL in writing (and the other parties hereto)
thereof and the parties hereto shall, during the period of 60 Business
Days after such notification (the "Discussion Period"), consult in
order to mitigate the effect of such circumstances. If, at the end of
that period, the parties have not reached agreement on a method of
mitigation, the Fund may terminate LFL's role as exclusive Commission
Payer and the Termination Date shall be deemed to occur on the date
such notice is given. On the date of receipt of such notification by
LFL, LFL shall be entitled to suspend its obligations to pay Selling
Commissions hereunder as and from such date. In the event that the
parties hereto subsequently agree on a method of mitigation during the
applicable Discussion Period, then LFL shall promptly pay all Selling
Commissions in respect of the sales of Deferred Sales Charge Shares
which occurred during such period.
8.3 COSTS AND EXPENSES OF LFL. All costs and expenses incurred by LFL in
connection with the enforcement of this Agreement against the Distributors
or the Fund shall be paid by the Distributors or the Fund forthwith on
demand therefor by LFL. The obligations of the Distributors and the Fund
under this Article 8.3 shall be several.
8.4 COSTS AND EXPENSES OF TGSS AND THE FUND. All costs and expenses incurred by
TGSS in connection with the enforcement of this Agreement against LFL as
set out in Article 8.2(a) shall be paid by LFL forthwith on demand therefor
by TGSS.
8.5 TRANSACTION EXPENSES. LFL shall reimburse each of TGSS, TGAL and the Fund
for all reasonable costs and expenses (including legal fees) together with
any VAT thereon incurred by each of them in connection with the
negotiation, preparation and execution of this Agreement, any other
document referred to in this Agreement and the completion of the
transactions herein contemplated.
ARTICLE 9
INDEMNIFICATION
9.1 Each of the Distributors on their own behalf and on behalf of the Fund,
separately and not jointly, agrees to indemnify and hold harmless LFL and
each of its Affiliates and their respective officers, directors, employees,
agents, advisors of, and any Person controlling any of the foregoing (each
an "Indemnified Party") from and against (collectively, but without
duplication) any and all Liabilities that may be incurred by or asserted or
awarded against an Indemnified Party, in each case arising out of, relating
to or by reason of, any claim brought by any Person not a party to this
Agreement in connection with the transactions contemplated hereby
(including, without limitation, any act or omission of or breach of this
Agreement by the Fund); PROVIDED, HOWEVER, the Distributors shall not be
required to indemnify any Indemnified Party in respect of any Liability if
and to the extent such Liability resulted primarily from (i) such
Indemnified Party's gross negligence or willful misconduct, or (ii) in the
case of an Indemnified Party which is LFL, any failure of LFL to perform
its covenants if any, set forth herein or in the other Program Documents to
which it is a party, or any failure of any of LFL's representations and
warranties, if any, set forth herein or in the other Program Documents to
which it is a party, to be true and correct as of the time such
representation or warranty spoke. Furthermore, the Distributors shall not
be required to indemnify any Indemnified Party in respect of (a) any
liability under applicable securities laws arising out of a Takeout
Transaction, except to the extent such liability is attributable to or
would not have occurred but for (i) the violation at the time of, or prior
to, such Takeout Transaction of any covenant, representation or warranty
made by the Distributors or the Funds contained in this Agreement or any
other Program Document, or (ii) any information furnished by or on behalf
of the Distributors or the Fund being false or misleading in any material
respect, or (b) any Liabilities arising as a result of a claim by an
Indemnified Party against the Distributors or as a result of a claim by the
Distributors against an Indemnified Party where it is determined that the
position of the Distributors in respect of such claim is correct in all
material respects.
9.2 LFL agrees to indemnify and hold harmless TGAL,TGSS and the Fund, each of
their Affiliates and their respective officers, directors, employees,
agents, advisors of, and any Person controlling any of, the foregoing
(collectively, the "Xxxxxxxxx Indemnitees") from and against (collectively,
but without duplication) any and all Liabilities that may be incurred by or
asserted or awarded against a Xxxxxxxxx Indemnitee, in each case arising
out of, relating to or by reason of, any claim brought by any person not a
party to this Agreement in connection with the transactions contemplated
hereby; PROVIDED, however, LFL shall not be required to indemnify a
Xxxxxxxxx Indemnitee in respect of any Liability to the extent such
Liability resulted from (i) such Xxxxxxxxx Indemnitee's gross negligence or
willful misconduct, or (ii) in the case of a Xxxxxxxxx Indemnitee that is a
party to any Program Document, any failure of such Xxxxxxxxx Indemnitee to
perform its covenants set forth in the Program Documents to which it is a
party or any failure of any of its representations and warranties set forth
in the Program Documents to which it is a party to be true and correct in
all material respects at the time such representation or warranty spoke.
9.3 ACTUAL LOSSES. For the purposes of this Article 9, each party's
indemnification obligations hereunder shall be in respect of only such
Liabilities that are reasonably forseeable as likely to arise by reason of
the occurrence of the relevant event in respect of which indemnification is
sought and, for the avoidance of doubt, such indemnification obligations do
not extend to cover indirect or consequential losses of any party. The
parties agree that it is expected that LFL will (a) enter into hedging
transactions in order to hedge the risks associated with the Deferred Sales
Charges, the Selling Commissions and the other transactions contemplated by
this Agreement, and (b) rely on the representations, warranties and
covenants provided herein in making representations and warranties in
Takeout Transactions, and that losses related to the foregoing are, with
the exception of losses in hedging transactions which are not attributable
to a breach of the representations, warranties and covenants given herein,
a reasonably foreseeable result of any breach by the Fund or the
Distributors of this Agreement or other Program Document to which is a
party.
ARTICLE 10
ADDITIONAL SUB-FUNDS
10.1 ADDITIONAL SUB-FUNDS.
(a) In the event that the Fund adds an Additional Sub-Fund LFL shall be
given the opportunity to serve as the exclusive Commission Payer to
such Additional Sub-Fund. If LFL agrees to act as the exclusive
Commission Payer to such Additional Sub-Fund, then the parties hereto
agree that such Additional Sub-Fund shall be deemed to be a "New B
Share Sub-Fund" within the meaning hereof and the New B Shares of such
Additional Sub-Fund which are sold on a deferred sales charge basis
shall be deemed to be "Deferred Sales Charge Shares" and "New B
Shares" within the meaning hereof and the terms and conditions of this
Agreement shall be applicable to such Additional Sub-Fund. Each of the
parties hereto shall execute and deliver such amendments to this
Agreement as shall be necessary to give effect to this Article 10.1.
If an Additional Sub-Fund is added but does not become a New B Share
Sub-Fund, then the allocation procedures at Schedule D shall be
amended so as to allocate External Shares and External Reinvested
Shares and the charges relating thereto to Monthly Pools.
(b) The Fund shall provide notice to LFL on or about the time when the
Fund files a prospectus supplement or prospectus addendum (as
appropriate) for a New B Share Sub-Fund.
ARTICLE 11
GENERAL
11.1 AMENDMENT OF AGREEMENT. This Agreement may be amended from time to time
only by written consent of the Fund, TGSS, TGAL and LFL.
11.2 TERMINATION OF LFL AS EXCLUSIVE COMMISSION PAYER. If LFL is unable to carry
out its obligations hereunder (which may occur if LFL is unable to pay
Selling Commissions for all of the Original Charge Shares sold during the
period of its appointment as Commission Payer under this Agreement), TGSS
may terminate LFL's exclusive right to pay Selling Commissions and may: (i)
pay Selling Commissions directly; (ii) enter into agreements with other
parties to pay Selling Commissions; or (iii) limit, by allotment or
otherwise, sales of Deferred Sales Charge Shares.
11.3 ASSIGNMENT
(a) This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto and their respective permitted successors and assigns;
provided however that except in the case of TGSS or TGAL, where such
assignment is to an Affiliate of TGSS or TGAL (as the case may be) and
where such Affiliate assignee is of equal financial standing to the
assignor, each of the Fund, TGAL and TGSS may not assign its rights or
obligations hereunder or in connection herewith or any interest herein
or under any other Program Document or with respect to any Fees or the
proceeds thereof without LFL's prior written consent, such consent not
to be unreasonably withheld; and provided further that, except as
provided in Articles 11.3(b) and 11.3(c), LFL shall be entitled to
assign its rights or obligations hereunder or under any other Program
Document or in respect of any Fees or the proceeds thereof, provided
it gives TGSS, TGAL and the Fund 30 days notice (the "Notice Period")
If LFL does not, within the Notice Period, receive a notice stating
that consent is withheld, it shall be deemed to have the authority to
effect such an assignment. It shall be reasonable for the Fund, TGAL
and TGSS to refuse to give its consent under this Article 11.3(a)
where, in its reasonable opinion, its obligations or liabilities will
be increased or otherwise adversely affected.
(b) The rights and obligations of LFL under this Agreement shall be
assignable in connection with any merger, consolidation or sale or
disposition of all or substantially all of the assets of or the
general and limited partnership or corporate interests in LFL with or
to another entity, provided that the surviving entity shall (i) be a
corporation or other entity organised under the laws of any country in
Europe, the United States of America or any State thereof or of Canada
or any province thereof; (ii) expressly assume the due and punctual
performance and observance of all covenants and conditions of this
Agreement and all other Program Documents to be performed or observed
by LFL, by agreement reasonably satisfactory in form and substance to
TGSS and the Fund; and (iii) prior to the Termination Date, have a net
worth prior to the Termination Date at least equal to that of LFL, and
access to funding sources for purposes of making payments of Selling
Commissions hereunder equivalent in an amount to those to which LFL
had access, immediately prior to such merger, consolidation or sale or
disposition of assets or interests.
Notwithstanding any other provision of this agreement (apart from
Article 11.3(c) below), LFL may, at any time (provided that it has
given 30 Business Days' notice to the Fund, TGAL and TGSS), assign
(whether absolutely or by way of security) all or any of its rights
and benefits under this Agreement or any other Program Document to
any Person (and the Fund, TGAL and TGSS will, as appropriate,
acknowledge receipt of any such notice and comply with the directions
as to payment set out in such notice) and, without prejudice to the
generality of the foregoing, LFL may (i) pledge or otherwise grant
security over all of its rights or benefits under this Agreement or
any other Program Document to a major financial institution as
security for money borrowed; (ii) make representations or warranties
and grant indemnities to another Person, as a part of and in
connection with a Takeout Transaction, which are similar to the
representations, warranties and indemnities agreed to by the Fund,
TGSS and TGAL in this Agreement or any other Program Document; or
(iii) assign the right to receive the proceeds of any indemnification
provided hereunder.
(c) LFL shall not have the right to assign any of its rights under this
Agreement to any of the top five mutual fund management companies in
each of Europe, Canada and the U.S. (and TGSS shall, acting
reasonably, determine the identities of such companies from time to
time). This exclusion shall not apply to Affiliates or associates of
such fund companies that are not involved in the management and
distribution of retail investment funds.
11.4 LIABILITY. LFL shall not be liable for any error of judgment or for any
loss suffered by the Fund or the Distributors in connection with the
matters to which this Agreement relates, except a loss resulting from
misfeasance, bad faith or negligence on its part in the performance of, or
reckless disregard by it of, its obligations hereunder.
11.5 CONFIDENTIALITY. Unless otherwise required by applicable law, TGSS, TGAL,
the Fund and LFL agree to maintain the confidentiality of this Agreement
(and all drafts thereof), the transactions contemplated hereby and all
confidential, material, non-public information concerning the other parties
to this Agreement, which information has been provided by such party by
another party and was not also available to such party through other means
(collectively, "Confidential Information"); provided that nothing in this
Article 11.5 shall prohibit disclosure of Confidential Information by any
such Person as follows:
(a) pursuant to an order under applicable law or pursuant to a subpoena or
other legal process;
(b) to the officers, directors, partners, employees, legal counsel or
auditors of, or lenders to, such Person, who shall also be instructed
to maintain it as confidential;
(c) in the case of the Fund, to any then current directors of the Fund,
Fund counsel, independent accountants or officers, who shall also be
instructed to maintain it as confidential;
(d) to any permitted assignee or permitted pledgee of all or any portion
of such Person's right, title or interest in this Agreement or the
Fees, provided that such permitted assignee or pledgee agrees in
writing delivered to and for the benefit of all parties to this
Agreement to be bound by the terms of this Article 11.5; or
(e) to any proposed permitted assignee or permitted pledgee of all or any
portion of such Person's right, title and interest in this Agreement
or the Fees, provided that such Person advises such proposed permitted
assignee or pledgee in writing that such Confidential Information is
confidential, non-public information and requests that such proposed
permitted assignee or pledgee keep it confidential and use it only for
purposes of evaluating the proposed assignment or pledge and such
proposed permitted assignee or pledgee agrees in a writing delivered
to and for the benefit of all parties to this Agreement to be bound by
the provisions of this Article 11.5.
Notwithstanding anything to the contrary contained herein, LFL shall keep,
and shall use its commercially reasonable efforts to cause its officers,
directors, partners, employees, advisers, legal counsel, auditors, lenders
and affiliates to keep, confidential all Confidential Information
concerning the Fund delivered or made available by the TGSS, TGAL or the
Fund to LFL or such other Persons, including without limitation the
Program Documents (to the extent not publicly available), shareholder
records, shareholder transaction records and information concerning the
composition of their respective portfolios, and information concerning the
financial condition of the TGSS, TGAL or their parents (and LFL shall not,
and shall cause each of the foregoing other Persons not to, use such
information to sell shares to or purchase shares from the Fund or other
investment company or recommend such trading to any other Person on the
basis of such information).
11.6 NOTICE. Any notice which is required or permitted to be given under this
Agreement may be given in writing by delivery in person or by ordinary
prepaid mail by addressing the same to the party to whom it is to be given
at the address set out below or at such other address as such party may
designate by notice in the foregoing manner:
(a) in the case of LFL:
x/x Xxxxx Xxxxxxxxx (Xxxxxxx) plc, Xxxxxxx Xxxx, 0 XXXX, Xxxxxx
0, Xxxxxxx
Fax No: 00 000 0 0000000
(b) in the case of the Fund:
00, xxxxxxxxx Xxxxx, X-0000, Xxxxxxxxxx
Attn: General Manager
Fax No: 00 000 0000 0000
(c) in the case of TGAL:
XX Xxx X-0000, Xxxxxx, Bahamas
Attn: Corporate Secretary
Fax No: 000 000 0000 000
(d) in the case of TGSS:
00, xxxxxxxxx Xxxxx, X-0000, Xxxxxxxxxx
Attn: General Manager
Fax No: 00 000 0000 0000
Any notice so given shall be deemed to have been given on the day it is
personally delivered or on the day which is five days after it is mailed,
as the case may be. All such notices shall be copied to:
Franklin Resources Inc
000 Xxxxxxxx Xxxxxx Xxxxxxxxx
Xxx Xxxxx
XX 00000
XXX
Attn: General Counsel
Fax No: 000 000 0000000
and to
Constellation Financial Management Company, LLC
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
XXX
Attn: Xxxxx Xxxxxxxxx
and to
Templeton Global Investors Limited
Xxxxxxx Xxxxx
00 Xxxxxx Xxxxxxx
Xxxxxxxxx XX0 0XX
Attn: Company Secretary
11.7 OVERDUE AMOUNTS. Any amount determined to be payable by one party to
another shall be payable with interEst calculated at an annual rate on
interest reported by Chase Manhattan Bank as its "prime rate", for the
period commencing from the date such payment was originally due to the date
payment actually is made.
11.8 TAXES.
(a) The Distributors or the Fund, as applicable, shall pay any present or
future sales, value added or excise taxes, excluding LFL's income
taxes, imposed upon the supply of services by LFL under this Agreement
(hereinafter referred to as "Sales Taxes"). In addition, the
Distributors or the Fund, as applicable, shall pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise under Luxembourg
legislation from any payment made by or on behalf of the Fund
hereunder or from the execution or delivery of, or otherwise with
respect to this Agreement or any other Program Document to which the
Distributors, the Fund or any of their respective Affiliates is a
party (hereinafter referred to as "Other Taxes"). LFL shall be
entitled to indemnification for the full amount of Sales Taxes or
Other Taxes (including without limitation, any Sales Taxes or Other
Taxes imposed on amounts payable under this section 11.8(a)) paid by
the Fund or either Distributor (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Sales Taxes or Other Taxes were
correctly or legally asserted.
(b) LFL shall pay (and indemnifies TGSS, TGAL and the Fund (each an
"Indemnitee") in respect of) any present or future sales, value-added
or excise taxes, excluding each Indemnitee's income taxes, imposed
upon the payments to be made by LFL under Article 3.1. In addition LFL
shall pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise
from any payments to be made by it hereunder.
(c) LFL shall pay (and indemnifies TGSS, TGAL and the Fund in respect of)
any withholding taxes that may become payable in connection with the
payments to be made by LFL of Selling Commissions to Approved Dealers
pursuant to Article 3.1 hereof and LFL shall gross up any such payment
so as to ensure that, after making all required deductions, the
Approved Dealers receive the full amount of the Selling Commissions
due to such Approved Dealers. Furthermore, the Fund shall pay the full
amounts deducted to the relevant taxation authority or other authority
(d) The Fund shall pay any withholding taxes that may become payable in
connection with any and all payments to be made by the Fund under this
Agreement and the Fund shall gross up any such payment so as to ensure
that, after making all required deductions, LFL receives an amount
equal to the amounts it would have received had no deductions been
made and the Fund shall pay the full amounts deducted to the relevant
taxation authority or other authority. Notwithstanding any other
provisions of this Agreement, in the event that the Fund is required
to withhold any such taxes, it shall do so without any recourse by, or
claim against, the Fund by LFL. In the event that the Fund is assessed
a deficiency by any taxing authority in respect of its failure to
withhold any such taxes, then the Fund shall be permitted to withhold
any such deficiency from any current or future payments or transfers
to be made by it to LFL under this Agreement until such deficiency
(but not including any interest and penalties thereon) is paid by LFL
and LFL shall have no recourse or claim against Fund with respect to
any such payments or withholdings.
11.9 SEPARATE LIABILITY OF FUND. Save where otherwise provided in this
Agreement, the liability and obligations of the Fund to TGAL, TGSS and LFL
hereunder shall be separate and distinct from the liability and obligations
of TGAL and TGSS, and the Fund shall be not be liable or responsible for
the action or inaction of TGAL and TGSS. Notwithstanding the foregoing
regardless of whether TGSS ceases to be the Distribution Controller or not,
the Fund agrees that it shall provide to LFL, TGSS and TGAL such
information as may be required from time to time to determine the amount of
the Fees payable pursuant to Article 4.
11.10 HEADINGS. In this Agreement, the headings are for convenience of reference
only, do not form a part of this Agreement and are not to be considered in
the interpretation of this Agreement. References to Articles, sections,
paragraphs, subparagraphs and clauses are to Articles, sections,
paragraphs, subparagraphs and clauses of this Agreement.
11.11 GENDER AND NUMBER. In this Agreement, words importing the masculine gender
include the feminine and neuter genders, words importing persons include
all Persons, and words in the singular include the plural, and vice versa,
wherever the context requires.
11.12 SEVERABILITY. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality shall not affect the validity of the
remainder of this Agreement.
11.13 FURTHER ACTS. The parties hereto agree to execute and deliver any such
further and other documents and perform and cause to be performed such
further and other acts and things as may be necessary or desirable in
order to give full effect to this Agreement and every part thereof.
Without limiting the generality of the foregoing, the Fund agrees that it
will provide to TGSS, TGAL and LFL such information as to date of issue
and issue price of its Deferred Sales Charge Shares and such other
information as shall be required to facilitate the calculating of any
amounts which are payable hereunder.
11.14 CURRENCY. All amounts referred to in this Agreement or required to be paid
hereunder shall be paid in the base currency of the applicable Sub-Fund.
11.15 COUNTERPARTS, FACSIMILE EXECUTION. This Agreement may be executed in
several counterparts, each of which when so executed shall be deemed to be
an original and such counterparts together shall constitute one and the
same instrument, which shall be sufficiently evidenced by any such
original counterpart. This Agreement may be executed and delivered by
facsimile and will be considered duly executed and delivered by the
parties so executing delivery on the day of its transmission by facsimile
in executed form to the other parties. A party so executing by way of
facsimile shall promptly deliver to each other party an originally signed
counterpart.
11.16 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes, with
effect from the date of this Agreement, all prior agreements,
understandings and negotiations between the parties including, without
limitation, the Commission Paying Agreement and those provisions only of
the Fees Side-Letter, the Distribution Agreement and the Distribution
Agreement Addendum which expressly conflict with the provisions of this
Agreement. For the avoidance of doubt, the remaining provisions of each of
the Fees Side-Letter, the Distribution Agreement and the Distribution
Agreement Addendum which do not expressly conflict with the provisions of
this Agreement shall remain in full force and uuvaried effect.
11.17 ENUREMENT. This Agreement is binding upon and enures to the benefit of the
parties hereto and their respective successors and permitted assigns.
11.18 INSTRUCTIONS. Any instructions to be given by LFL in the performance of
its duties hereunder in respect of any of the matters referred to in or
contemplated by this Agreement ("Proper Instructions") shall be written,
cabled, telecopied or telexed instructions and signed or purported to be
signed by such person or persons as LFL shall from time to time have
authorised in writing to give the particular class of instructions in
question. Different persons may be authorised to give instructions for
different purposes and such persons may also include officers of
corporations other than LFL so authorised by LFL. For the purposes of this
Agreement, LFL shall furnish the other parties hereto with a schedule of
the names of the persons authorised from time to time (either alone or
with others as specified) to give instructions together with specimens of
their signatures. LFL shall also furnish the other parties hereto with a
certified copy of a resolution of the Directors of LFL as conclusive
evidence of the authority of any such person to act and the other parties
hereto shall be entitled to rely on such resolution and authority as being
in full force and effect until receipt of written notice to the contrary.
11.19 LAW AND JURISDICTION.
(a) This Agreement shall be governed by and construed in accordance with
the laws of Ireland.
(b) Each of the parties hereto irrevocably agree that the courts of
Ireland shall have non-exclusive jurisdiction to hear and determine
any suit, action or proceeding and to settle any disputes which may
arise out of or in connection with this Agreement and for such
purposes hereby irrevocably submit to the jurisdiction of such courts.
(c) Each party irrevocably waives any objection which it may have now or
in the future to the courts of Ireland being nominated for the purpose
of Article 11.19(b) and agrees not to claim that any such court is not
a convenient or appropriate forum.
(d) Each of the Fund, TGAL and TGSS hereby irrevocably authorises and
appoints Matsack Trust Limited as its process agent to accept service
of all legal process arising out of or connected with this Agreement
and service on Matsack Trust Limited (or any substitute process agent
appointed in accordance with this Article) shall be deemed to be
service on the Fund, TGAL or TGSS (as the case may be). If for any
reason Matsack Trust Limited (or any substitute process agent
appointed in accordance with this Article 11.19 (d)) ceases to be able
to act as process agent or no longer has an address in Ireland, each
of the Fund, TGAL or TGSS irrevocably undertakes to appoint a
substitute process agent resident in Ireland and advise LFL thereof.
Failing such appointment each of the Fund, TGAL or TGSS hereby
authorises the Agent to appoint an Agent on its behalf. Nothing in
this Article 11.19 (d) shall affect the right to serve legal process
in any other manner permitted by law.
ACKNOWLEDGEMENT BY THE FUND AND TGSS
Without prejudice to the execution of the Agreement by the parties hereto, each
of the Fund and TGSS expressly and specifically confirm their agreement with the
provisions of clause 11.19(b) of this Agreement for the purpose of article 1 of
the Protocol annexed to the Convention on jurisdiction and the enforcement of
judgements in civil and commercial matters signed at Brussels on 27 September,
1968 as amended by the Convention of Lugano and San-Sebastian.
-------------------------------- ------------------------------
TEMPLETON GLOBAL STRATEGY TEMPLETON GLOBAL STRATEGIC
SERVICES SA FUNDS SERVICES SA FUNDS
AS WITNESS WHEREOF the duly authorised representatives of the parties hereto
have caused this Agreement to be duly executed the day and year first herein
written.
SCHEDULE A
ADVISORY AGREEMENTS
1. Investment Management Agreement dated February 2, 1995 between the
Fund and Xxxxxxxxx Investment Management Limited.
2. Investment Management Agreement dated July 7, 1997 between the Fund
and Franklin Mutual Advisers Inc.
3. Investment Management Agreement dated February 15, 1996 between the Fund
and Franklin Advisers Inc (as amended by an amendment between those
parties dated March 1, 1996).
4. Investment Management Agreement dated February 2, 1995 between the
Fund and Xxxxxxxxx Investment Management (Singapore) Pte. Ltd.
5. Investment Management Agreement between the Fund and Xxxxxxxxx
Xxxxxxxxx & Xxxxxxxxxx Ltd (now TGSS).
PROSPECTUS DOCUMENTS
1. The prospectus in relation to the Fund dated September 1997.
2. The addenda thereto dated January 1, 1999 and January 8 1999
respectively.
SCHEDULE B
Intentionally left blank
SCHEDULE C
Xxxxxxxxx Global Growth Fund
Franklin Mutual Beacon Fund
Franklin U.S. Equity Fund
Xxxxxxxxx Emerging Markets Fund
Franklin Xxxxxxxxx High Yield Fund
Franklin Xxxxxxxxx U.S. Government Fund
Xxxxxxxxx Emerging Markets Fixed Income Fund
Templeton U.S. Dollar Liquid Reserve Fund
SCHEDULE D
ALLOCATION PROCEDURES
Deferred Sales Charge Shares shall be allocated among Monthly Pools in
accordance with the procedures set forth in these Allocation Procedures.
The parties agree that if (i) the Sub-Funds or the Sub-Funds' transfer agent
becomes able to supply records which accurately track Free Shares and Transfer
Shares to the Commission Shares from which they were derived and the Fund, TGSS
or TGAL develops an alternative allocation methodology which uses such tracking
information (the "Alternate Methodology") and (ii) LFL reasonably determines
that such methodology is at least as reliable and accurate as the methodology
described below, then the parties agree that such Alternate Methodology will be
substituted for the foregoing and this Schedule D will be amended to reflect a
mutually agreeable description of such Alternate Methodology.
Defined terms used in this Schedule D and not otherwise defined in this Schedule
D shall have the meanings assigned to such terms. As used herein the following
terms shall have the meanings indicated:
"COMMISSION SHARE" shall mean, in respect of any New B Share Sub-Fund, each New
B Share of such Sub-Fund which is issued under circumstances which would
normally give rise to an obligation of the holder of such Share to pay a
Deferred Sales Charge upon redemption of such Share, including, without
limitation, any Share of such Sub-Fund issued in connection with a Free
Exchange, and any such Share shall not cease to be a Commission Share prior to
the redemption (including a redemption in connection with a Free Exchange) or
conversion of such Share even though the obligation to pay the Deferred Sales
Charge shall have expired or conditions for waivers thereof shall exist.
"DEFERRED SALES CHARGE" or "DSC" shall mean any deferred sales charge payable by
the holder of a Share of any Sub-Fund upon redemption of such Share, either
directly or by withholding from the proceeds of such redemption.
"FREE EXCHANGE" shall mean the issuance of a Transfer Share upon the immediate
investment of proceeds realized on the redemption of a Commission Share of
another New B Share Sub-Fund.
"FREE SHARE" shall mean, in respect of any New B Share Sub-Fund, each Reinvested
Share of such Sub-Fund.
"MONTHLY POOL" shall mean, with respect to any Sub-Fund and any calendar month:
(i) each Original Charge Share issued by such Sub-Fund during
such calendar month;
(ii) Transfer Shares of such Sub-Fund issued upon the immediate
reinvestment of proceeds realized on the redemption of (a) an
Original Charge Share of another Sub-Fund issued by such
Sub-Fund during the calendar month described in clause (i)
above; (b) a Reinvested Share of another Sub-Fund issued in
respect of Deferred Sales Charge Shares described in clause (ii)
(a) above or this clause (ii)(b); or (c) a Transfer Share of
another Sub-Fund which relates to a Deferred Sales Charge Share
described in clause (ii)(a) or (ii)(b) above or this clause
(ii)(c); and
(iii) Free Shares of such Sub-Fund issued upon the automatic
reinvestment of income and capital gains distributions with
respect to Deferred Sales Charge Shares of such Sub-Fund
described in clauses (i) or (ii) above, or this clause (iii).
"NET ASSET VALUE" shall mean, with respect to any Share of a Sub-Fund and any
date of determination, the net asset value of such Share on such date computed
in the manner such value is required to be computed by such Sub-Fund in its
reports to its shareholders.
"NON-OMNIBUS COMMISSION SHARE" shall mean a Commission Share that is a
Non-Omnibus Share.
"NON-OMNIBUS FREE SHARE" shall mean a Free Share that is a Non-Omnibus Share.
"NON-OMNIBUS SHARE" shall mean a Share that is not an Omnibus Share.
"OMNIBUS COMMISSION SHARE" shall mean a Commission Share that is an Omnibus
Share.
"OMNIBUS FREE SHARE" shall mean a Free Share that is an Omnibus Share.
"OMNIBUS SHARE" shall mean, with respect to any Sub-Fund, a Share of such
Sub-Fund held in the name of a broker dealer street account on the records
maintained by the Sub-Fund's Transfer Agent.
"SHARE" shall mean any Deferred Charge Share of any New B Share Sub-Fund.
ATTRIBUTION OF SHARES: Shares of each Sub-Fund outstanding from time to time
shall be attributed to Monthly Pools in accordance with the following
procedures:
1 NON-OMNIBUS SHARES
(a) COMMISSION SHARES
Each Sub-Fund's Transfer Agent maintains records with which it is
able to determine the original issuance date of each outstanding
Non-Omnibus Commission Share, or in the case of a Transfer Share, of
the Original Charge Share from which such Transfer Share is derived
through one or more Free Exchanges. Using such data, LFL will
attribute the following Commission Shares outstanding from time to
time to the Monthly Pool having its Sale Cutoff Date in a specified
month: (i) Original Charge Shares sold (whether or not settled)
during such month, and (ii) Transfer Shares which were derived
through one or more Free Exchanges from Original Charge Shares sold
(whether or not settled) during such month, in each case determined
in accordance with the records maintained by the Transfer Agent.
(b) FREE SHARES
Non-Omnibus Free Shares of a Sub-Fund to be attributed among Monthly
Pools pursuant to this Section 1(b) will be attributed by LFL using
records maintained by LFL in accordance with this Section 1.
information supplied by such Sub-Fund's Transfer Agent and the
following methodology:
(1) NON-OMNIBUS FREE SHARE ISSUANCES. Non-Omnibus Free Shares
--------------------------------
issued on any day during any calendar month by such Sub-Fund
shall be attributed:
(i) To Monthly Pools originated prior to the month in question
using the following formula:
FS * CSFS
--------------------------
TCSFS + [NMCS * DD/DM]
(ii) To the Monthly Pool originated during the month in question
using the following formula:
FS * NMCS DD
-------------------------- * ----
TCSFS + [NMCS * DD/DM] DM
(iii) For this purpose:
FS = The number of Non-Omnibus Free Shares
issued on such day during such month based
on information provided by the Fund's
Transfer Agent.
CSFS = The number of Non-Omnibus Commission
Shares and Non-Omnibus Free Shares
attributed to such Monthly Pool in question
and outstanding as of the close of business
on the last business day of the month
preceding the month in question.
TCSFS = The total number of Non-Omnibus Commission
Shares and Non-Omnibus Free Shares
outstanding as of the close of business on
the last day of the month preceding the
month in question.
NMCS = The number of Non-Omnibus Commission
Shares attributed to the Monthly Pool
originated during the month in question and
outstanding as of the close of business on
the last business day of such month.
DD = The number of days in the month in
question prior to and including the
ex-dividend date for the payment of the
dividend or other distribution giving rise
to the issuance of Free Shares in question.
DM = The number of days in the month in
question.
(2) NON-OMNIBUS FREE SHARE CONVERSIONS. The number of Non-Omnibus
Free Shares of a Sub-Fund deemed converted during any calendar
month will equal the sum of (i) the number of Non-Omnibus Free
Shares of such Sub-Fund attributed as of the close of business
on the last business day preceding the month in question to the
Monthly Pool the Anniversary of the Sale Cutoff Date of which
occurs during such month, plus (ii) the number of Non-Omnibus
Free Shares of such Sub-Fund attributed to such Monthly Pool
with respect to the month in question pursuant to clause 1(b)(1)
above.
(3) NON-OMNIBUS FREE SHARE REDEMPTIONS AND EXCHANGES. Net changes
during any calendar month in the number of Non-Omnibus Free
Shares of a Sub-Fund that have not been allocated pursuant to
clause 1(b)(1) or 1(b)(2) above (which changes will primarily
result from redemptions or exchanges of such Shares) shall be
attributed to Monthly Pools as of the end of such month using
the following methodology:
(i) The aggregate amount of such changes during such month will
be computed as follows:
FSRE = FSO - FSI + FSC
where:
FSRE = The change during such calendar month in
the number of outstanding Non-Omnibus Free
Shares of the Sub-Fund in question that has
not been allocated pursuant to clause
1(b)(1) or 1(b)(2) above.
FSO = The number of Non-Omnibus Free Shares
outstanding on the last business day of the
calendar month in question minus the number
of Non-Omnibus Free Shares outstanding on
the last business day of the preceding
calendar month.
FSI = The number of Non-Omnibus Free Shares
issued during the month in question and
attributed to Monthly Pools pursuant to
clause 1(b)(1) above.
FSC = The number of Non-Omnibus Free Shares
deemed converted during the month in
question and attributed to Monthly Pools
pursuant to clause 1(b)(2) above.
(ii) The aggregate amount of FSRE during such month will be
attributed to Monthly Pools as follows:
FSRE X FS
----
TFS
where:
FSRE = The amount of FSRE determined as
provided in clause (i) above.
FS = The number of Non-Omnibus Free Shares
attributed to such Monthly Pool as of the
last business day of the calendar month
preceding the month in question.
TFS = The total number of Non-Omnibus Free
Shares as of the last business day of the
calendar month preceding the month in
question.
2 Omnibus Shares.
(a) Alternative Methodologies.
If the conditions to broker dealer attribution of Omnibus Shares of a
Sub-Fund have been satisfied, then the Omnibus Shares of such Sub-Fund
will be attributed pursuant to Section 2(b).
If the conditions to broker dealer attribution of Omnibus Shares of a
Sub-Fund have not been satisfied, then the Omnibus Shares of such Sub-Fund
will be attributed pursuant to Section 2(c).
The conditions to broker dealer attribution of Omnibus Shares of a
Sub-Fund will have been satisfied if certain broker dealer(s) (the
"Specified Broker Dealer(s)") can provide reliable data with which LFL can
attribute Omnibus Shares held by the Specified Broker Dealer(s) to
specific Monthly Pools using the methodology described in Section 1 as
though all references in Section 1 to the Transfer Agent, Non-Omnibus
Shares, Non-Omnibus Commission Shares and Non-Omnibus Free Shares were
references to the Specified Broker Dealer(s), Omnibus Shares, Omnibus
Commission Shares and Omnibus Free Shares, respectively.
(b) IF BROKER DEALER DATA IS AVAILABLE.
If the conditions to broker dealer attribution of Omnibus Shares of a
Sub-Fund have been satisfied, then the aggregate number of Omnibus
Shares attributed to each Monthly Pool as of the last business day of
a calendar month shall equal:
OSSBD X TOS
-------
TOSSBD
where:
OSSBD = The number of Omnibus Shares of such
Sub-Fund held by the Specified Broker Dealer(s)
as of the last business day of the calendar month
in question and attributed to such Monthly Pool
using the methodology described in Section 1 with
respect to such Sub-Fund and the data supplied by
such Specified Broker Dealer(s) but without using
data supplied by the Sub-Fund's Transfer Agent.
TOS = The total number of Omnibus Shares as of the last
business day of the calendar month in question
according to the Sub-Fund's Transfer Agent's records.
TOSSBD = The total number of Omnibus Shares as of the last
business day of the calendar month in question held by
the Specified Broker Dealer(s) according to the
Specified Broker Dealer(s)'s records.
(c) IF BROKER DEALER DATA IS NOT AVAILABLE.
If the conditions to broker dealer attribution of Omnibus Shares of a
Sub-Fund have not been satisfied, then the aggregate number of
Omnibus Shares attributed to each Monthly Pool as of the last
business day of a calendar month shall equal:
TOS X NOS
------
TNOS
where:
TOS = The total number of Omnibus Shares as of the last
business day of the calendar month in question
according to the Sub-Fund's Transfer Agent's records.
NOS = The number of Non-Omnibus Shares as of the last
business day of the calendar month in question
attributed to the Monthly Pool in question.
TNOS = The total number of Non-Omnibus Shares as of the
last business day of the calendar month in question.
SCHEDULE E
1. An opinion of Luxembourg counsel.
2. Certified copies of the Articles of Incorporation of the Fund and a
resolution of the board of directors of the Fund wherein, inter alia, they
authorise the execution of this Agreement by the Fund and the performance
of its obligations hereunder.
3. Certified copies of the Prospectus Documents, the Advisory Agreements,
the Distribution Agreement, the Distribution Agreement Addendum, the
Distribution Controller Agreement and the Fees Side-Letter.
SIGNED for and on behalf of
LIGHTNING FINANCE COMPANY LIMITED
by
Signature: ____________________________
Print Name: ____________________________
Title: ____________________________
DULY AUTHORISED OFFICER
in the presence of:
Signature: _____________________________
Witness Name:_____________________________
Address: _____________________________
SIGNED for and on behalf of
XXXXXXXXX GLOBAL STRATEGY FUNDS
by
Signature: ____________________________
Print Name: ____________________________
Title: ____________________________
DULY AUTHORISED OFFICER
in the presence of:
Signature: _____________________________
Witness Name:_____________________________
Address: _____________________________
SIGNED for and on behalf of
XXXXXXXXX GLOBAL ADVISORS LIMITED
by
Signature: ____________________________
Print Name: ____________________________
Title: ____________________________
DULY AUTHORISED OFFICER
in the presence of:
Signature: _____________________________
Witness Name:_____________________________
Address: _____________________________
SIGNED for and on behalf of
XXXXXXXXX GLOBAL STRATEGIC SERVICES S.A.
by
Signature: ____________________________
Print Name: ____________________________
Title: ____________________________
DULY AUTHORISED OFFICER
in the presence of:
Signature: _____________________________
Witness Name:_____________________________
Address: _____________________________
