EXHIBIT 99(e)
CENTURION FUNDS, INC.
FORM OF
DISTRIBUTION AGREEMENT
November , 1998
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
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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 dealers 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 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
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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
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contained herein shall be deemed to require the Fund to pay any of the 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 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; (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
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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
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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 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 or supplemented, will include 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
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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
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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 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 (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 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
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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
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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
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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 charter documents, as amended from time
to time.
6. Offering Price
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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
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7. Notice to You
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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
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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
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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, without penalty, on 30 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
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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
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may be entered in any state or federal court having jurisdiction. No punitive
damages are to be awarded.
10. Miscellaneous
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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 Centurion Trust Company, Citigroup Inc. or
their affiliates and 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 your 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. 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.
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,
CENTURION FUNDS, INC.
By:
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Authorized Officer
Accepted:
CFBDS, INC.
By:
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Authorized Officer
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