XXXXX XXXXXX NEW JERSEY MUNICIPALS FUND INC.
FORM OF
DISTRIBUTION AGREEMENT
October 8, 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
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
NEW JERSEY
MUNICIPALS FUND
INC.
By:
_____________________
Authorized Officer
Accepted:
CFBDS, INC.
By: __________________________
Authorized Officer
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