DISTRIBUTION AGREEMENT
November 28, 1997
Salomon Brothers Inc
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, Salomon Brothers Opportunity Fund Inc
(the "Fund"), an open-end, non-diversified management investment company
organized as a corporation under the laws of the State of Maryland, has agreed
that Salomon Brothers Inc ("Salomon Brothers") shall be, for the period of this
Agreement, the distributor of shares issued by the Fund (the "Shares").
1. Services as Distributor
1.1 Salomon Brothers will act as agent for the distribution of
the Shares covered by 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").
1.2 Salomon Brothers agrees to use its best efforts to solicit
orders for the sale of the Shares at the public offering price, as determined in
accordance with the registration statement, and will undertake such advertising
and promotion as it believes is reasonable in connection with such solicitation.
1.3 All activities by Salomon Brothers as distributor of the
Shares shall comply with all applicable laws, rules and regulations, including,
without limitation, all rules and regulations made or adopted by the Securities
and Exchange Commission (the "SEC") or by any securities association registered
under the Securities Exchange Act of 1934.
1.4 Salomon Brothers will provide one or more persons during
normal business hours to respond to telephone questions concerning the Fund.
1.5 Salomon Brothers will transmit any orders received by it
for purchase or redemption of shares of the Fund to The Shareholder Services
Group, Inc. ("TSSG"), the Fund's transfer and dividend agent, or any successor
to TSSG of which the Fund has notified Salomon Brothers in writing.
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1.6 Salomon Brothers acknowledges that, whenever in the
judgment of the Fund's officers such action is warranted for any reason,
including, without limitation, market, economic or political conditions, those
officers may decline to accept any orders for, or make any sales of, the Shares
until such time as those officers deem it advisable to accept such orders and to
make such sales.
1.7 Salomon Brothers will act only on its own behalf as
principal should it choose to enter into selling agreements with selected
dealers or others.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions that
may be reasonably necessary in connection with the qualification of the Shares
for sale in those states that Salomon Brothers may designate.
2.2 The Fund shall furnish from time to time, for use in
connection with the sale of the Shares, such information reports with respect to
the Fund and its shares as Salomon Brothers 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 one or more of the Fund's officers, shall be true and correct. The Fund shall
also furnish Salomon Brothers upon request with: (a) annual audits of the Fund's
books and accounts made by independent public accountants regularly retained by
the Fund, (b) semiannual unaudited financial statements pertaining to the Fund,
(c) quarterly earnings statements prepared by the Fund, (d) a monthly itemized
list of the securities in the portfolios of all series of the Shares, (e)
monthly balance sheets as soon as practicable after the end of each month and
(f) from time to time such additional information regarding the Fund's financial
condition as Salomon Brothers may reasonably request.
3. Representations and Warranties
The Fund represents to Salomon Brothers 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
of the Fund have been carefully prepared in conformity with the requirements of
the 1933 Act, the 1940 Act 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 which at any time shall have been
filed with the SEC. The Fund represents and warrants to Salomon Brothers that
any registration statement, prospectus and statement of additional information,
when such registration statement becomes effective, will include all statements
required to be contained therein in conformity with the 1933 Act, the 1940 Act
and the rules and regulations of the SEC; that all statements of fact contained
in any registration statement, prospectus or statement of additional information
will be true and correct when such registration statement becomes
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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. Salomon Brothers
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 Salomon Brothers' counsel, 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 Salomon Brothers to do so, Salomon Brothers may, at its
option, terminate this Agreement. The Fund shall not file any amendment to any
registration statement or supplement to any prospectus or statement of
additional information without giving Salomon Brothers 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 Salomon Brothers and any dealers with
whom Salomon Brothers has entered into dealer agreements to use any prospectus
or statement of additional information furnished by the Fund from time to time,
in connection with the sale of the Fund's shares. The Fund agrees to indemnify,
defend and hold Salomon Brothers, its several officers and directors, and any
person who controls Salomon Brothers 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 Salomon Brothers, its officers and directors, or any such
controlling person, may incur under the 1933 Act, the 1940 Act or 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 Salomon
Brothers, its officers or directors, and any such controlling person shall not
be deemed to cover any claims, demands, liabilities or expenses arising out of
or based upon any statements or representations made by Salomon Brothers or its
representatives or agents other than such statements and representations as are
contained in any registration statement, prospectus or statement of additional
information and in such financial and other statements as are furnished to
Salomon Brothers pursuant to paragraph 2.2 hereof; and further provided that the
Fund's agreement to indemnify Salomon Brothers and the Fund's representations
and warranties hereinbefore set forth in paragraph 3 shall not be deemed to
cover any liability to the Fund or its shareholders to which Salomon Brothers
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in
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the performance of its duties, or by reason of Salomon Brothers' reckless
disregard of its obligations and duties under this Agreement. The Fund's
agreement to indemnify Salomon Brothers, its officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned upon the Fund's
being notified of any action brought against Salomon Brothers, its 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'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 Salomon Brothers, its
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 Salomon Brothers' benefit, to the benefit of its several officers
and directors, and their respective estates, and to the benefit of the
controlling persons and their successors. The Fund agrees to notify Salomon
Brothers promptly of the commencement of any litigation or proceedings against
the Fund or any of its officers or trustees in connection with the issuance and
sale of any of the Fund's shares.
4.2 Salomon Brothers agrees to indemnify, defend and hold the
Fund, its several officers and directors, 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
directors or any such controlling person may incur under the 1933 Act, the 1940
Act or common law or otherwise, but only to the extent that such liability or
expense incurred by the Fund, its officers or directors or such controlling
person resulting from such claims or demands shall arise out of or be based upon
(a) any unauthorized sales literature, advertisements, information, statements
or representations or (b) any untrue or alleged untrue statement of a material
fact contained in information, furnished in writing by Salomon Brothers 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 Salomon Brothers to the Fund and required to be stated
in such answers or necessary to make such information not misleading. Salomon
Brothers' agreement to indemnify the Fund, its officers and directors, and any
such controlling person, as aforesaid, is expressly conditioned upon Salomon
Brothers' being notified of any action brought against the Fund, its officers or
directors, or any such controlling person, such notification to be given by
letter or telegram addressed to Salomon Brothers at its principal office in New
York, New York and sent to Salomon Brothers 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
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Salomon Brothers of any such action shall not relieve Salomon Brothers from any
liability that Salomon Brothers may have to the Fund, its officers or directors,
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 Salomon
Brothers' indemnity agreement contained in this paragraph 4.2. Salomon Brothers
agrees to notify the Fund promptly of the commencement of any litigation or
proceedings against Salomon Brothers or any of its officers or directors in
connection with the issuance and sale of any of the Fund's shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish to do so, to
assume the defense thereof with counsel satisfactory to such indemnified party.
If the indemnifying party opts to assume the defense of such action, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and expenses of
separate counsel to such indemnified party if (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between them in the
conduct of the defense of such action.
5. Effectiveness of Registration
None of the Shares shall be offered by either Salomon Brothers
or the Fund under any of the provisions of this Agreement and no orders for the
purchase or sale of the shares hereunder 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 an
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 articles of incorporation.
6. Notice to Salomon Brothers
The Fund agrees to advise Salomon Brothers 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;
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(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
any registration statement, prospectus or statement of additional
information which may from time to time be filed with the SEC.
7. Term of Agreement
This Agreement shall continue until December 31, 1997 and
thereafter shall continue automatically for successive annual periods ending on
December 31, of each year, provided such continuance is specifically approved at
least annually by (i) the Fund's Board of Directors or (ii) 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
the majority of the Directors 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, without penalty, on 60 days' notice by the Fund's Board of
Directors, by vote of the holders of a majority of the Fund's shares, or on 90
days' notice by Salomon Brothers. This agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
8. Miscellaneous
The Fund recognizes that directors, officers and employees of
Salomon Brothers may from time to time serve as directors, trustees, officers
and employees of corporations and business trusts (including other investment
companies) and that such other corporations and trusts may include the name
"Salomon" or "Salomon Brothers" as part of their names, and that Salomon
Brothers or its affiliates may enter into distribution or other agreements with
such other corporations and trusts. If Salomon Brothers, or an affiliate, ceases
to act as the distributor of the Fund's shares, the Fund agrees that, at Salomon
Brothers' request, the Fund's license to use the words "Salomon Brothers" will
terminate and that the Fund will take all necessary action to change the name of
the Fund to a name not including the words "Salomon" or "Salomon Brothers."
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Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance thereof at the place below
indicated, whereupon it shall become a binding agreement between us.
Very truly yours,
Salomon Brothers Opportunity
Fund Inc
By:/S/ Irving Brilliant
President
Accepted:
SALOMON BROTHERS INC
By:/S/ Xxxxxxx X. Xxxxxx
Managing Director
