FORM OF
DISTRIBUTION AGREEMENT
[Date]
CFBDS, Inc.
0 Xx. Xxxxx 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 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
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 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; and (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 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, included 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 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 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
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
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, 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
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 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.
11. Limitation of Liability (Massachusetts business trusts only)
The Fund and you agree that the obligations of the Fund under this
Agreement shall not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of
the Fund, individually, but are binding only upon the assets and property of
the Fund, as provided in the Master Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees and signed by
an authorized officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of
the Fund as provided in its Master Trust Agreement.
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,
[Name of Fund]
By: _____________________
[Title]
Accepted:
CFBDS, INC.
By: __________________________
Authorized Officer
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