Exhibit No. 5(b)
DEALER AGREEMENT
PAINEWEBBER FINANCIAL SERVICES GROWTH FUND INC.
AGREEMENT made as of September 12, 2000, between Xxxxxxxx Xxxxxxxx
Asset Management Inc. ("Xxxxxxxx Xxxxxxxx"), a Delaware corporation, and
PaineWebber Incorporated ("PaineWebber"), a Delaware corporation.
WHEREAS PaineWebber Financial Services Growth Fund Inc. ("Fund") is a
Maryland corporation registered under the Investment Company Act of 1940, as
amended ("1940 Act"), as an open-end management investment company; and
WHEREAS the Fund currently offers distinct series of shares of common
stock ("Series"), which correspond to distinct portfolios and for which the
Fund's board of directors ("Board") has established a number of shares of common
stock as Class A shares, Class B shares, Class C Shares and/or Class Y shares
(referred to collectively as "Shares") and has adopted separate Plans of
Distribution pursuant to Rule 12b-1 under the 1940 Act for its Class A shares,
Class B shares and Class C shares (respectively, "Class A Plan," "Class B Plan"
and "Class C Plan"); and
WHEREAS Xxxxxxxx Xxxxxxxx has entered into a Distribution Contract with
the Fund ("Distribution Contract") pursuant to which Xxxxxxxx Xxxxxxxx serves as
principal distributor in connection with the offering and sale of the Shares of
the above-referenced Series and of such other Series as may hereafter be
designated by the Board and have one or more classes of Shares established; and
WHEREAS Xxxxxxxx Xxxxxxxx desires to retain PaineWebber as its agent in
connection with the offering and sale of the Shares of each Series and to
delegate to PaineWebber performance of certain of the services which Xxxxxxxx
Xxxxxxxx provides to the Fund under the Distribution Contract; and
WHEREAS PaineWebber is willing to act as Xxxxxxxx Xxxxxxxx' agent in
connection with the offering and sale of such Shares and to perform such
services on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, Xxxxxxxx Xxxxxxxx and PaineWebber agree as follows:
1. Appointment. Xxxxxxxx Xxxxxxxx hereby appoints PaineWebber as its
agent to sell and to arrange for the sale of the Shares on the terms and for the
period set forth in this Agreement. Xxxxxxxx Xxxxxxxx also appoints PaineWebber
as its agent for the performance of certain other services set forth herein,
which Xxxxxxxx Xxxxxxxx provides to the Fund under the Distribution Contract.
PaineWebber hereby accepts such appointments and agrees to act hereunder. It is
understood, however, that these appointments do not preclude Xxxxxxxx Xxxxxxxx
from entering into agreements with other registered and qualified retail dealers
for the sale of Shares or preclude sales of the Shares directly through the
Fund's transfer agent in the manner set forth in the Registration Statement. As
used in this Agreement, the term "Registration Statement" shall mean the
currently effective Registration Statement of the Fund, and any
supplements thereto, under the Securities Act of 1933, as amended ("1933 Act"),
and the 0000 Xxx.
2. Services, Duties and Representations of PaineWebber.
(a) PaineWebber agrees to sell the Shares on a best efforts basis from
time to time during the term of this Agreement as agent for Xxxxxxxx Xxxxxxxx
and upon the terms described in this Agreement and the Registration Statement.
(b) Upon the later of the date of this Agreement or the initial
offering of Shares by a Series to the public, PaineWebber will hold itself
available to receive orders, satisfactory to PaineWebber and Xxxxxxxx Xxxxxxxx,
for the purchase of Shares and will accept such orders on behalf of Xxxxxxxx
Xxxxxxxx and the Fund as of the time of receipt of such orders and will promptly
transmit such orders as are accepted to the Fund's transfer agent. Purchase
orders shall be deemed effective at the time and in the manner set forth in the
Registration Statement.
(c) PaineWebber in its discretion may sell Shares to (i) its
correspondent firms and customers of such firms and (ii) such other registered
and qualified retail dealers as it may select, subject to the approval of
Xxxxxxxx Xxxxxxxx. In making agreements with such dealers, PaineWebber shall act
only as principal and not as agent for Xxxxxxxx Xxxxxxxx or the Fund.
(d) The offering price of the Shares shall be the net asset value per
share as next determined by the Fund following receipt of an order at
PaineWebber's principal office, plus the applicable initial sales charge, if
any, as set forth in the Registration Statement. Xxxxxxxx Xxxxxxxx shall
promptly furnish or arrange for the furnishing to PaineWebber from the Fund of a
statement of each computation of net asset value.
(e) PaineWebber shall not be obligated to sell any certain number of
Shares.
(f) To facilitate redemption of Shares by shareholders directly or
through dealers, PaineWebber is authorized but not required on behalf of
Xxxxxxxx Xxxxxxxx and the Fund to repurchase Shares presented to it by
shareholders, its correspondent firms and other dealers at the price determined
in accordance with, and in the manner set forth in, the Registration Statement.
Such price shall reflect the subtraction of the applicable contingent deferred
sales charge, if any, computed in accordance with and in the manner set forth in
the Registration Statement.
(g) PaineWebber shall provide ongoing shareholder services, which
include responding to shareholder inquiries, providing shareholders with
information on their investments in the Shares and any other services now or
hereafter deemed to be appropriate activities for the payment of "service fees"
under Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD") (collectively, "service activities").
(h) PaineWebber represents and warrants that: (i) it is a member in
good standing of the NASD and agrees to abide by the Conduct Rules of the NASD;
(ii) it is registered as a broker-dealer with the Securities and Exchange
Commission; (iii) it will maintain any filings and licenses required by federal
and state laws to conduct the business contemplated under this Agreement; and
(iv) it will comply with all federal and state laws and regulations applicable
to the offer and sale of the Shares.
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(i) PaineWebber shall not incur any debts or obligations on behalf of
Xxxxxxxx Xxxxxxxx or the Fund. PaineWebber shall bear all costs that it incurs
in selling the Shares and in complying with the terms and conditions of this
Agreement as more specifically set forth in paragraph 8.
(j) PaineWebber shall not permit any employee or agent to offer or sell
Shares to the public unless such person is duly licensed under applicable
federal and state laws and regulations.
(k) PaineWebber shall not (i) furnish any information or make any
representations concerning the Shares other than those contained in the
Registration Statement or in sales literature or advertising that has been
prepared or approved by Xxxxxxxx Xxxxxxxx as provided in paragraph 6 or (ii)
offer or sell the Shares in jurisdictions in which they have not been approved
for offer and sale.
3. Services Not Exclusive. The services furnished by PaineWebber
hereunder are not to be deemed exclusive and PaineWebber shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. Nothing in this Agreement shall limit or restrict the
right of any director, officer or employee of PaineWebber who may also be a
director, Board member, officer or employee of Xxxxxxxx Xxxxxxxx or the Fund, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
or a dissimilar nature.
4. Compensation.
(a) As compensation for its service activities under this Agreement
with respect to the Class A, B and C shares, Xxxxxxxx Xxxxxxxx shall pay to
PaineWebber service fees with respect to Class A, B and C shares maintained in
shareholder accounts serviced by PaineWebber employees, correspondent firms and
other dealers in such amounts as Xxxxxxxx Xxxxxxxx and PaineWebber may from time
to time agree upon.
(b) As compensation for its activities under this Agreement with
respect to the distribution of Shares sold with an initial sales charge,
PaineWebber shall retain that portion of the offering price constituting the
Discount to Selected Dealers ("Discount"), if any, set forth in the Registration
Statement. PaineWebber is authorized to collect the gross proceeds derived from
the sale of such Shares; remit the net asset value thereof to the Fund's
Transfer Agent; remit to Xxxxxxxx Xxxxxxxx the difference between the offering
price of the Shares and the applicable Discount; and retain said Discount.
Whether the offering price of any Shares includes an initial sales charge out of
which PaineWebber may retain a Discount shall be determined in accordance with
the Registration Statement.
(c) Also as compensation for its activities under this Agreement,
Xxxxxxxx Xxxxxxxx shall pay to PaineWebber such commissions and other
compensation as Xxxxxxxx Xxxxxxxx and PaineWebber may from time to time agree
upon.
(d) PaineWebber may reallow all or any part of the service fees,
commissions or other compensation which it is paid under this Agreement to its
correspondent firms or other dealers, in such amounts as PaineWebber may from
time to time determine.
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(e) Xxxxxxxx Xxxxxxxx' obligation to pay compensation to PaineWebber as
agreed upon pursuant to this paragraph 4 is not contingent upon receipt by
Xxxxxxxx Xxxxxxxx of any compensation from the Fund or Series. Xxxxxxxx Xxxxxxxx
shall advise the Board of any agreements or revised agreements as to
compensation to be paid by Xxxxxxxx Xxxxxxxx to PaineWebber but shall not be
required to obtain prior approval for such agreements from the Board.
5. Duties of Xxxxxxxx Xxxxxxxx.
(a) It is understood that the Fund reserves the right at any time to
withdraw all offerings of any class or classes of Shares of any or all Series by
written notice to Xxxxxxxx Xxxxxxxx.
(b) Xxxxxxxx Xxxxxxxx shall keep PaineWebber fully informed of the
Fund's affairs and shall make available to PaineWebber copies of all
information, financial statements and other papers which PaineWebber may
reasonably request for use in connection with the distribution of Shares,
including, without limitation, certified copies of any financial statements
prepared for the Fund by its independent public accountant and such reasonable
number of copies of the most current prospectus, statement of additional
information, and annual and interim reports of any Series as PaineWebber may
request, and Xxxxxxxx Xxxxxxxx shall cooperate fully in the efforts of
PaineWebber to sell and arrange for the sale of Shares and in the performance of
PaineWebber under this Agreement.
(c) Xxxxxxxx Xxxxxxxx shall comply with all state and federal laws and
regulations applicable to a distributor of the Shares.
6. Advertising. Xxxxxxxx Xxxxxxxx agrees to make available such sales
and advertising materials relating to the Shares as Xxxxxxxx Xxxxxxxx in its
discretion determines appropriate. PaineWebber agrees to submit all sales and
advertising materials developed by it relating to the Shares to Xxxxxxxx
Xxxxxxxx for approval. PaineWebber agrees not to publish or distribute such
materials to the public without first receiving such approval in writing.
Xxxxxxxx Xxxxxxxx shall assist PaineWebber in obtaining any regulatory approvals
of such materials that may be required of or desired by PaineWebber.
7. Records. PaineWebber agrees to maintain all records required by
applicable state and federal laws and regulations relating to the offer and sale
of the Shares. Xxxxxxxx Xxxxxxxx and its representatives shall have access to
such records during normal business hours for review or copying.
8. Expenses of PaineWebber. PaineWebber shall bear all costs and
expenses of (i) preparing, printing, and distributing any materials not prepared
by the Fund or Xxxxxxxx Xxxxxxxx and other materials used by PaineWebber in
connection with its offering of the Shares for sale to the public; (ii) any
expenses of advertising incurred by PaineWebber in connection with such
offering; (iii) the expenses of registration or qualification of PaineWebber as
a dealer or broker under federal or state laws and the expenses of continuing
such registration or qualification; and (iv) all compensation paid to
PaineWebber's Financial Advisors or other employees and others for selling
Shares, and all expenses of PaineWebber, its Financial Advisors
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and employees and others who engage in or support the sale of Shares as may be
incurred in connection with their sales efforts. PaineWebber shall bear such
additional costs and expenses as it and Xxxxxxxx Xxxxxxxx may agree upon.
Xxxxxxxx Xxxxxxxx shall advise the Board of any such agreement as to additional
costs and expenses borne by but shall not be required to obtain prior approval
for such agreements from the Board.
9. Indemnification.
(a) Xxxxxxxx Xxxxxxxx agrees to indemnify, defend, and hold
PaineWebber, its officers and directors, and any person who controls PaineWebber
within the meaning of Section 15 of the 1933 Act, free and harmless from and
against any and all claims, demands, liabilities, and expenses (including the
cost of investigating or defending such claims, demands, or liabilities and any
counsel fees incurred in connection therewith) which PaineWebber, its officers,
directors, or any such controlling person may incur under the 1933 Act, under
common law or otherwise, arising out of or based upon any alleged untrue
statement of a material fact contained in the Registration Statement; arising
out of or based upon any alleged omission to state a material fact required to
be stated in the Registration Statement thereof or necessary to make the
statements in the Registration Statement thereof not misleading; or arising out
of any sales or advertising materials with respect to the Shares provided by
Xxxxxxxx Xxxxxxxx to PaineWebber. However, this indemnity agreement shall not
apply to any claims, demands, liabilities, or expenses that arise out of or are
based upon any such untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information furnished in
writing by PaineWebber to Xxxxxxxx Xxxxxxxx or the Fund for use in the
Registration Statement or in any sales or advertising material; and further
provided, that in no event shall anything contained herein be so construed as to
protect PaineWebber against any liability to Xxxxxxxx Xxxxxxxx or the Fund or to
the shareholders of any Series to which PaineWebber would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement.
(b) PaineWebber agrees to indemnify, defend, and hold Xxxxxxxx Xxxxxxxx
and its officers and directors, the Fund, its officers and Board members, and
any person who controls Xxxxxxxx Xxxxxxxx or the Fund within the meaning of
Section 15 of the 1933 Act, free and harmless from and against any and all
claims, demands, liabilities and expenses (including the cost of investigating
or defending against such claims, demands or liabilities and any counsel fees
incurred in connection therewith) which Xxxxxxxx Xxxxxxxx or its officers or
directors or the Fund, its officers or Board members, or any such controlling
person may incur under the 1933 Act, under common law or otherwise arising out
of or based upon any alleged untrue statement of a material fact contained in
information furnished in writing by PaineWebber to Xxxxxxxx Xxxxxxxx or the Fund
for use in the Registration Statement; arising out of or based upon any alleged
omission to state a material fact in connection with such information required
to be stated in the Registration Statement or necessary to make such information
not misleading; or arising out of any agreement between PaineWebber and a
correspondent firm or any other retail dealer; or arising out of any sales or
advertising material used by PaineWebber in connection with its duties under
this Agreement.
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10. Duration and Termination.
(a) This Agreement shall become effective upon the date written above,
provided that, with respect to any class of Shares of a Series, this Contract
shall not take effect unless such action has first been approved by vote of a
majority of the Board and by vote of a majority of those Board members who are
not interested persons of the Fund and, for a class of Shares for which a Plan
of Distribution has been adopted, who also have no direct or indirect financial
interest in the operation of the Plan of Distribution or in any agreements
related thereto (all such Board members collectively being referred to herein as
the "Independent Board Members"), cast in person at a meeting called for the
purpose of voting on such action.
(b) Unless sooner terminated as provided herein, this Agreement shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Agreement shall continue automatically for successive periods
of twelve months each, provided that such continuance is specifically approved
at least annually (i) by a vote of a majority of the Independent Board Members,
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by the Board or with respect to a class of Shares of any given Series
by vote of a majority of the outstanding voting securities of that class of
Shares of such Series.
(c) Notwithstanding the foregoing, with respect to a class of Shares of
any Series this Agreement may be terminated at any time, without the payment of
any penalty, by either party, upon the giving of 30 days' written notice. Such
notice shall be deemed to have been given on the date it is received in writing
by the other party or any officer thereof. This Agreement may also be terminated
at any time, without the payment of any penalty, by vote of the Board, by vote
of a majority of the Independent Board Members or, with respect to a class of
Shares of a Series, by vote of a majority of the outstanding voting securities
of that class of Shares on 30 days' written notice to Xxxxxxxx Xxxxxxxx and
PaineWebber.
(d) Termination of this Agreement with respect to a class of Shares of
any given Series shall in no way affect the continued validity of this Agreement
or the performance thereunder with respect to any other classes of Shares of
that Series or any classes of Shares of any other Series. This Agreement will
automatically terminate in the event of its assignment or in the event that the
Distribution Contract is terminated.
(e) Notwithstanding the foregoing, Xxxxxxxx Xxxxxxxx may terminate this
Agreement with respect to a class of Shares of a Series without penalty, such
termination to be effective upon the giving of written notice to PaineWebber in
the event that the Plan of Distribution relating to that class of Shares is
terminated or is amended to reduce the compensation payable to Xxxxxxxx Xxxxxxxx
thereunder or in the event that the Registration Statement is amended so as to
reduce the amount of compensation payable to Xxxxxxxx Xxxxxxxx with respect to
that class of Shares under the Distribution Contract, provided that Xxxxxxxx
Xxxxxxxx gives notice of termination pursuant to this provision within 90 days
of such amendment or termination of the Plan of Distribution or amendment of the
Registration Statement.
11. Amendment of this Agreement. No provision of this Agreement may be
amended, changed, waived, discharged or terminated orally, but only by an
instrument in writing
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signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
12. Use of PaineWebber Name. PaineWebber hereby authorizes Xxxxxxxx
Xxxxxxxx to use the name "PaineWebber Incorporated" or any name derived
therefrom in any sales or advertising materials prepared and/or used by Xxxxxxxx
Xxxxxxxx in connection with its duties as distributor of the Shares, but only
for so long as this Agreement or any extension, renewal or amendment hereof
remains in effect, including any similar agreement with any organization which
shall have succeeded to the business of PaineWebber.
13. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York and the 1940 Act. To the extent that the
applicable laws of the State of New York conflict with the applicable provisions
of the 1940 Act, the latter shall control.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested person" and "assignment" shall have the same meaning as such terms
have in the 1940 Act. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is relaxed by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated as of the day and year first written
above.
XXXXXXXX XXXXXXXX ASSET
ATTEST: MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. X'Xxxxxxx
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Xxxxx X. Xxxxxx-First VP Senior Vice President
ATTEST: PAINEWEBBER INCORPORATED
By: /s/ Xxxxxxxx Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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