XXXXX XXXXXX SECTOR SERIES INC.
DISTRIBUTION AGREEMENT
February 14, 2000
CFBDS, Inc.
00 Xxxx Xxxxxx
Xxxxxx, XX 00000
Dear Sirs:
This is to confirm that, in consideration of the
agreements hereinafter contained, the above-named
investment company (the "Fund") has agreed that you
shall be, for the period of this Agreement, the non-
exclusive principal underwriter and distributor of
shares of the Fund and each Series of the Fund set
forth on Exhibit A hereto, as such Exhibit may be
revised from time to time (each, including any shares
of the Fund not designated by series, a "Series").
For purposes of this Agreement, the term "Shares"
shall mean shares of the each Series, or one or more
Series, as the context may require.
1. Services as Principal Underwriter and
Distributor
1.1 You will act as agent for the
distribution of Shares covered by, and in accordance
with, the registration statement, prospectus and
statement of additional information then in effect
under the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940,
as amended (the "1940 Act"), and will transmit or
cause to be transmitted promptly any orders received
by you or those with whom you have sales or servicing
agreements for purchase or redemption of Shares to the
Transfer and Dividend Disbursing Agent for the Fund of
which the Fund has notified you in writing.
1.2 You agree to use your best efforts
to solicit orders for the sale of Shares. It is
contemplated that you will enter into sales or
servicing agreements with registered securities
brokers and banks and into servicing agreements with
financial institutions and other industry
professionals, such as investment advisers,
accountants and estate planning firms. In entering
into such agreements, you will act only on your own
behalf as principal underwriter and distributor. You
will not be responsible for making any distribution
plan or service fee payments pursuant to any plans the
Fund may adopt or agreements it may enter into.
1.3 You shall act as the non-exclusive
principal underwriter and distributor of Shares in
compliance with all applicable laws, rules, and
regulations, including, without limitation, all rules
and regulations made or adopted from time to time by
the Securities and Exchange Commission (the "SEC")
pursuant to the 1933 Act or the 1940 Act or by any
securities association registered under the Securities
Exchange Act of 1934, as amended.
1.4 Whenever in their judgment such
action is warranted for any reason, including, without
limitation, market, economic or political conditions,
the Fund's officers may decline to accept any orders
for, or make any sales of, any Shares until such time
as those officers deem it advisable to accept such
orders and to make such sales and the Fund shall
advise you promptly of such determination.
2. Duties of the Fund
2.1 The Fund agrees to pay all costs and
expenses in connection with the registration of Shares
under the 1933 Act, and all expenses in connection
with maintaining facilities for the issue and transfer
of Shares and for supplying information, prices and
other data to be furnished by the Fund hereunder, and
all expenses in connection with the preparation and
printing of the Fund's prospectuses and statements of
additional information for regulatory purposes and for
distribution to shareholders; provided however, that
nothing contained herein shall be deemed to require
the Fund to pay any costs of advertising or marketing
the sale of Shares.
2.2 The Fund agrees to execute any and
all documents and to furnish any and all information
and otherwise to take any other actions that may be
reasonably necessary in the discretion of the Fund's
officers in connection with the qualification of
Shares for sale in such states and other U.S.
jurisdictions as the Fund may approve and designate to
you from time to time, and the Fund agrees to pay all
expenses that may be incurred in connection with such
qualification. You shall pay all expenses connected
with your own qualification as a securities broker or
dealer under state or Federal laws and, except as
otherwise specifically provided in this Agreement, all
other expenses incurred by you in connection with the
sale of Shares as contemplated in this Agreement.
2.3 The Fund shall furnish you from time
to time, for use in connection with the sale of
Shares, such information reports with respect to the
Fund or any relevant Series and the Shares as you may
reasonably request, all of which shall be signed by
one or more of the Fund's duly authorized officers;
and the Fund warrants that the statements contained in
any such reports, when so signed by the Fund's
officers, shall be true and correct. The Fund also
shall furnish you upon request with (a) the reports of
the annual audits of the financial statements of the
Fund for each Series made by independent certified
public accountants retained by the Fund for such
purpose; (b) semi-annual unaudited financial
statements pertaining to each Series; (c) quarterly
earnings statements prepared by the Fund for any
Series; (d) a monthly itemized list of the securities
in each Series' portfolio; (e) monthly balance sheets
as soon as practicable after the end of each month;
(f) the current net asset value and offering price
per share for each Series on each day such net asset
value is computed and (g) from time to time such
additional information regarding the financial
condition of each Series of the Fund as you may
reasonably request.
3. Representations and Warranties
The Fund represents to you that all registration
statements, prospectuses and statements of additional
information filed by the Fund with the SEC under the
1933 Act and the 1940 Act with respect to the Shares
have been prepared in conformity with the requirements
of said Acts and the rules and regulations of the SEC
thereunder. As used in this Agreement, the terms
"registration statement", "prospectus" and "statement
of additional information" shall mean any registration
statement, prospectus and statement of additional
information filed by the Fund with the SEC and any
amendments and supplements thereto filed by the Fund
with the SEC. The Fund represents and warrants to you
that any such registration statement, prospectus and
statement of additional information, when such
registration statement becomes effective and as such
prospectus and statement of additional information are
amended and supplemented, includes at the time of such
effectiveness, amendment or supplement all statements
required to be contained therein in conformance with
the 1933 Act, the 1940 Act and the rules and
regulations of the SEC; that all statements of
material fact contained in any registration statement,
prospectus or statement of additional information will
be true and correct when such registration statement
becomes effective; and that neither any registration
statement nor any prospectus or statement of
additional information when such registration
statement becomes effective will include an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading to a purchaser of the Fund's Shares. The
Fund may, but shall not be obligated to, propose from
time to time such amendment or amendments to any
registration statement and such supplement or
supplements to any prospectus or statement of
additional information as, in the light of future
developments, may, in the opinion of the Fund, be
necessary or advisable. If the Fund shall not propose
such amendment or amendments and/or supplement or
supplements within fifteen days after receipt by the
Fund of a written request from you to do so, you may,
at your option, terminate this Agreement or decline to
make offers of the Fund's Shares until such amendments
are made. The Fund shall not file any amendment to
any registration statement or supplement to any
prospectus or statement of additional information
without giving you reasonable notice thereof in
advance; provided, however, that nothing contained in
this Agreement shall in any way limit the Fund's right
to file at any time such amendments to any
registration statement and/or supplements to any
prospectus or statement of additional information, of
whatever character, as the Fund may deem advisable,
such right being in all respects absolute and
unconditional.
4. Indemnification
4.1 The Fund authorizes you to use any
prospectus or statement of additional information
furnished by the Fund from time to time, in connection
with the sale of Shares. The Fund agrees to
indemnify, defend and hold you, your several officers
and directors, and any person who controls you 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 such counsel fees incurred in
connection therewith) which you, your officers and
directors, or any such controlling person, may incur
under the 1933 Act or under common law or otherwise,
arising out of or based upon any untrue statement, or
alleged untrue statement, of a material fact contained
in any registration statement, any prospectus or any
statement of additional information or arising out of
or based upon any omission, or alleged omission, to
state a material fact required to be stated in any
registration statement, any prospectus or any
statement of additional information or necessary to
make the statements in any of them not misleading;
provided, however, that the Fund's agreement to
indemnify you, your officers or directors, and any
such controlling person shall not be deemed to cover
any claims, demands, liabilities or expenses arising
out of any statements or representations made by you
or your representatives or agents other than such
statements and representations as are contained in any
prospectus or statement of additional information and
in such financial and other statements as are
furnished to you pursuant to paragraph 2.3 of this
Agreement; and further provided that the Fund's
agreement to indemnify you and the Fund's
representations and warranties herein before set forth
in paragraph 3 of this Agreement shall not be deemed
to cover any liability to the Fund or its shareholders
to which you would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in
the performance of your duties, or by reason of your
reckless disregard of your obligations and duties
under this Agreement. The Fund's agreement to
indemnify you, your officers and directors, and any
such controlling person, as aforesaid, is expressly
conditioned upon the Fund's being notified of any
action brought against you, your officers or
directors, or any such controlling person, such
notification to be given by letter or by telegram
addressed to the Fund at its principal office in New
York, New York and sent to the Fund by the person
against whom such action is brought, within ten days
after the summons or other first legal process shall
have been served. The failure so to notify the Fund
of any such action shall not relieve the Fund from any
liability that the Fund may have to the person against
whom such action is brought by reason of any such
untrue, or alleged untrue, statement or omission, or
alleged omission, otherwise than on account of the
Fund's indemnity agreement contained in this paragraph
4.1. The Fund will be entitled to assume the defense
of any suit brought to enforce any such claim, demand
or liability, but, in such case, such defense shall be
conducted by counsel of good standing chosen by the
Fund. In the event the Fund elects to assume the
defense of any such suit and retains counsel of good
standing, the defendant or defendants in such suit
shall bear the fees and expenses of any additional
counsel retained by any of them; but if the Fund does
not elect to assume the defense of any such suit, the
Fund will reimburse you, your officers and directors,
or the controlling person or persons named as
defendant or defendants in such suit, for the
reasonable fees and expenses of any counsel retained
by you or them. The Fund's indemnification agreement
contained in this paragraph 4.1 and the Fund's
representations and warranties in this Agreement shall
remain operative and in full force and effect
regardless of any investigation made by or on behalf
of you, your officers and directors, or any
controlling person, and shall survive the delivery of
any of the Fund's Shares. This agreement of indemnity
will inure exclusively to your benefit, to the benefit
of your several officers and directors, and their
respective estates, and to the benefit of the
controlling persons and their successors. The Fund
agrees to notify you promptly of the commencement of
any litigation or proceedings against the Fund or any
of its officers or Board members in connection with
the issuance and sale of any of the Fund's Shares.
4.2 You agree to indemnify, defend and
hold the Fund, its several officers and Board members,
and any person who controls 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 costs of
investigating or defending such claims, demands or
liabilities and any counsel fees incurred in
connection therewith) that the Fund, its officers or
Board members or any such controlling person may incur
under the 1933 Act, or under common law or otherwise,
but only to the extent that such liability or expense
incurred by the Fund, its officers or Board members,
or such controlling person resulting from such claims
or demands shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material
fact contained in information furnished in writing by
you to the Fund and used in the answers to any of the
items of the registration statement or in the
corresponding statements made in the prospectus or
statement of additional information, or shall arise
out of or be based upon any omission, or alleged
omission, to state a material fact in connection with
such information furnished in writing by you to the
Fund and required to be stated in such answers or
necessary to make such information not misleading.
Your agreement to indemnify the Fund, its officers or
Board members, and any such controlling person, as
aforesaid, is expressly conditioned upon your being
notified of any action brought against the Fund, its
officers or Board members, or any such controlling
person, such notification to be given by letter or
telegram addressed to you at your principal office in
Boston, Massachusetts and sent to you by the person
against whom such action is brought, within ten days
after the summons or other first legal process shall
have been served. You shall have the right to control
the defense of such action, with counsel of your own
choosing, satisfactory to the Fund, if such action is
based solely upon such alleged misstatement or
omission on your part or with the Fund's consent, and
in any event the Fund, its officers or Board members
or such controlling person shall each have the right
to participate in the defense or preparation of the
defense of any such action with counsel of its own
choosing reasonably acceptable to you but shall not
have the right to settle any such action without your
consent, which will not be unreasonably withheld. The
failure to so notify you of any such action shall not
relieve you from any liability that you may have to
the Fund, its officers or Board members, or to such
controlling person by reason of any such untrue, or
alleged untrue, statement or omission, or alleged
omission, otherwise than on account of your indemnity
agreement contained in this paragraph 4.2. You agree
to notify the Fund promptly of the commencement of any
litigation or proceedings against you or any of your
officers or directors in connection with the issuance
and sale of any of the Fund's Shares.
5. Effectiveness of Registration
No Shares shall be offered by either you or the
Fund under any of the provisions of this Agreement and
no orders for the purchase or sale of such Shares
under this Agreement shall be accepted by the Fund if
and so long as the effectiveness of the registration
statement then in effect or any necessary amendments
thereto shall be suspended under any of the provisions
of the 1933 Act, or if and so long as a current
prospectus as required by Section 5(b) (2) of the 1933
Act is not on file with the SEC; provided, however,
that nothing contained in this paragraph 5 shall in
any way restrict or have any application to or bearing
upon the Fund's obligation to repurchase its Shares
from any shareholder in accordance with the provisions
of the Fund's prospectus, statement of additional
information or charter documents, as amended from time
to time.
6. Offering Price
Shares of any class of any Series of the Fund
offered for sale by you shall be offered for sale at a
price per share (the "offering price") equal to (a)
their net asset value (determined in the manner set
forth in the Fund's charter documents and the then-
current prospectus and statement of additional
information) plus (b) a sales charge, if applicable,
which shall be the percentage of the offering price of
such Shares as set forth in the Fund's then-current
prospectus relating to such Series. In addition to or
in lieu of any sales charge applicable at the time of
sale, Shares of any class of any Series of the Fund
offered for sale by you may be subject to a contingent
deferred sales charge as set forth in the Fund's then-
current prospectus and statement of additional
information. You shall be entitled to receive any
sales charge levied at the time of sale in respect of
the Shares without remitting any portion to the Fund.
Any payments to a broker or dealer through whom you
sell Shares shall be governed by a separate agreement
between you and such broker or dealer and the Fund's
then-current prospectus and statement of additional
information. Any payments to any provider of services
to you shall be governed by a separate agreement
between you and such service provider.
7. Notice to You
The Fund agrees to advise you immediately in
writing:
(a) of any request
by the SEC for amendments
to the registration
statement, prospectus or
statement of additional
information then in effect
or for additional
information;
(b) in the event of
the issuance by the SEC of
any stop order suspending
the effectiveness of the
registration statement,
prospectus or statement of
additional information then
in effect or the initiation
of any proceeding for that
purpose;
(c) of the happening
of any event that makes
untrue any statement of a
material fact made in the
registration statement,
prospectus or statement of
additional information then
in effect or that requires
the making of a change in
such registration
statement, prospectus or
statement of additional
information in order to
make the statements therein
not misleading; and
(d) of all actions
of the SEC with respect to
any amendment to the
registration statement, or
any supplement to the
prospectus or statement of
additional information
which may from time to time
be filed with the SEC.
8. Term of the Agreement
This Agreement shall become effective on the
date hereof, shall have an initial term of one year
from the date hereof, and shall continue for
successive annual periods thereafter so long as such
continuance is specifically approved at least annually
by (a) the Fund's Board or (b) by a vote of a majority
(as defined in the 0000 Xxx) of the Fund's outstanding
voting securities, provided that in either event the
continuance is also approved by a majority of the
Board members of the Fund who are not interested
persons (as defined in the 0000 Xxx) of any party to
this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement is terminable with or without cause,
without penalty, on 60 days' notice by the Fund's
Board or by vote of holders of a majority of the
relevant Series outstanding voting securities, or on
90 days' notice by you. This Agreement will also
terminate automatically, as to the relevant Series, in
the event of its assignment (as defined in the 1940
Act and the rules and regulations thereunder).
9. Arbitration
Any claim, controversy, dispute or
deadlock arising under this Agreement (collectively, a
"Dispute") shall be settled by arbitration
administered under the rules of the American
Arbitration Association ("AAA") in New York, New York.
Any arbitration and award of the arbitrators, or a
majority of them, shall be final and the judgment upon
the award rendered may be entered in any state or
federal court having jurisdiction. No punitive
damages are to be awarded.
10. Miscellaneous
So long as you act as a principal underwriter
and distributor of Shares, you shall not perform any
services for any entity other than investment
companies advised or administered by Citigroup Inc. or
its subsidiaries. The Fund recognizes that the
persons employed by you to assist in the performance
of your duties under this Agreement may not devote
their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict
the persons employed by you or any of your affiliates
right to engage in and devote time and attention to
other businesses or to render services of whatever
kind or nature, provided, however, that in conducting
such business or rendering such services your
employees and affiliates would take reasonable steps
to assure that the other parties involved are put on
notice as to the legal entity with which they are
dealing. This Agreement and the terms and conditions
set forth herein shall be governed by, and construed
in accordance with, the laws of the State of New York
without giving effect to its conflict of interest
principles.
If the foregoing is in accordance with your
understanding, kindly indicate your acceptance of this
Agreement by signing and returning to us the enclosed
copy, whereupon this Agreement will become binding on
you.
Very truly yours,
XXXXX XXXXXX
SECTOR SERIES INC.
By:
_____________________
Authorized
Officer
Accepted:
CFBDS, INC.
By: __________________________
Authorized Officer
\SECT\DISTRIBUTION CFBDS
EXHIBIT A
Xxxxx Xxxxxx Sector Series Inc.
Xxxxx Xxxxxx Natural Resources Fund
Xxxxx Xxxxxx Financial Services Fund
Xxxxx Xxxxxx Health Sciences Fund
Xxxxx Xxxxxx Technology Fund
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