Exhibit e(1)
AMENDED AND RESTATED
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of August 20, 1985, amended and
restated as of December 2, 1988, and further amended and restated as of May 5,
2000, by and between CITIFUNDS TAX FREE RESERVES (formerly know as Landmark Tax
Free Reserves), a Massachusetts business trust (the "Trust"), and CFBDS, INC.
(formerly known as The Landmark Funds Broker-Dealer Services, Inc.), a
Massachusetts corporation ("CFBDS" or the "Distributor"). This Agreement relates
solely to Shares of Beneficial Interest of the Trust that are designated "Class
N" ("Shares").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end investment
company registered under the Investment Company Act of 1940 (collectively with
the rules and regulations promulgated thereunder, the "1940 Act");
WHEREAS, the Board of Trustees of the Trust has adopted an Amended and
Restated Distribution Plan, dated as of August 20, 1985, and amended and
restated as of May 5, 2000 (the "Distribution Plan"), which is incorporated
herein by reference and pursuant to which the Trust desires to enter into this
Distribution Agreement; and
WHEREAS, the Trust wishes to engage CFBDS to provide certain services
with respect to the distribution of shares, and CFBDS is willing to provide such
services to the Trust on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. The Trust grants to the Distributor the right, as agent of the
Trust, to sell Shares upon the terms hereinbelow set forth during the term of
this Agreement. While this Agreement is in force, the Distributor agrees to use
its best efforts to find purchasers for Shares.
The Distributor shall have the right, as agent of the Trust, to order
from the Trust the Shares needed, but not more than the Shares needed (except
for clerical errors and errors of transmission), to fill unconditional orders
for Shares placed with the Distributor by any dealer, all such orders to be made
in the manner set forth in the Trust's then-current prospectus (the
"Prospectus") and then-current statement of additional information (the
"Statement of Additional Information") relating to such Shares. The price which
shall be paid to the Trust for the Shares so purchased shall be the net asset
value per Share as determined in accordance with the provisions of the Trust's
Declaration of Trust and By-Laws, as each may from time to time be amended
(collectively, the "Governing Instruments"). The Distributor shall notify the
Custodian of the Trust (currently State Street Bank and Trust Company), at the
end of each business day, or as soon thereafter as the orders placed with the
Distributor have been compiled, of the number of Shares and the prices thereof
which have been ordered through the Distributor since 12:00 noon on the previous
business day.
The right granted to the Distributor to place orders for Shares with
the Trust shall be exclusive, except that this exclusive right shall not apply
to Shares issued in the event that an investment company (whether a regulated or
private investment company or a personal holding company) is merged with and
into or consolidated with the Trust or in the event that the Trust acquires, by
purchase or otherwise, all (or substantially all) the assets or the outstanding
shares of any such company; nor shall it apply to Shares issued by the Trust as
a dividend or stock split. The exclusive right to place orders for Shares
granted to the Distributor may be waived by the Distributor by notice to the
Trust in writing, either unconditionally or subject to such conditions and
limitations as may be set forth in such notice to the Trust. The Trust hereby
acknowledges that the Distributor may render distribution and other services to
other parties, including other investment companies. In connection with its
duties hereunder, the Distributor shall also arrange for computation of
performance statistics with respect to the Trust and arrange for publication of
current price information in newspapers and other publications.
2. The Shares may be sold by the Distributor on behalf of the Trust to
or through any dealer having a sales agreement with the Distributor upon the
following terms and conditions: The public offering price of Shares, i.e., the
price per Share at which the Distributor or dealer purchasing Shares through the
Distributor may sell shares to the public, shall be the net asset value of such
Shares.
The net asset value of Shares shall be determined by the Trust, or by
an agent of the Trust, as of 12:00 noon on each day on which the New York Stock
Exchange is open for trading (and on such other days as the Trustees deem
necessary in order to comply with Rule 22c-1 under the 1940 Act), in accordance
with the method established pursuant to the Governing Instruments. The Trust
shall have the right to suspend the sale of Shares if, because of some
extraordinary condition, the New York Stock Exchange shall be closed, or if
conditions existing during the hours when the Exchange is open render such
action advisable or for any other reason deemed adequate by the Trust.
3. The Trust agrees that it will, from time to time, but subject to the
necessary approval, if any, of its shareholders, take all necessary action to
register such number of Shares under the Securities Act of 1933, as amended (the
"1933 Act"), as the Distributor may reasonably be expected to sell.
The Distributor shall be an independent contractor and neither the
Distributor nor any of its Directors, officers or employees as such, is or shall
be an employee of the Trust. It is understood that Trustees, officers and
shareholders of the Trust are or may become interested in the Distributor, as
Directors, officers, employees, or otherwise and that Directors, officers and
employees of the Distributor are or may become similarly interested in the Trust
and that the Distributor may be or become interested in the Trust as a
shareholder or otherwise. The Distributor is responsible for its own conduct and
the employment, control and conduct (but only with respect to the duties and
obligations of the Distributor hereunder) of its agents and employees and for
any injury to any of such agents or employees or to others through its agents or
employees. The Distributor assumes full responsibility for its agents and
employees under applicable statutes and agrees to pay all employer taxes
thereunder.
4. The Distributor covenants and agrees that, in selling Shares, it
will use its best efforts in all respects duly to conform with the requirements
of all state and federal laws and the Conduct Rules of the National Association
of Securities Dealers, Inc. relating to the sale of Shares, and will indemnify
and hold harmless the Trust and each of its Trustees and officers and each
person, if any, who controls the Trust within the meaning of Section 15 of the
Act (the "Indemnified Parties") against all losses, liabilities, damages or
expenses (including the reasonable cost of investigating or defending any
alleged loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising from any claim, demand, action or suit
(collectively, "Claims"), arising by reason of any persons acquiring any of the
Shares through the Distributor, which may be based upon the 1933 Act or any
other statute or common law, on account of any wrongful act of the Distributor
or any of its employees (including any failure to conform with any requirement
of any state or federal law or the Conduct Rules of the National Association of
Securities Dealers, Inc. relating to the sale of Shares) or on the ground that
the registration statement under the 1933 Act, including all amendments thereto
(the "Registration Statement"), or Prospectus or previous prospectus or
Statement of Additional Information or previous statement of additional
information, includes or included an untrue statement of a material fact or
omits or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, if and only if
any such act, statement or omission was made in reliance upon information
furnished by the Distributor to the Trust; provided, however, that in no case
(i) is the indemnity of the Distributor in favor of any Indemnified Party to be
deemed to protect any such Indemnified Party against liability to which such
Indemnified Party would otherwise be subject by reason of willful misfeasance,
bad faith or gross negligence in the performance of its or his duties or by
reason of its or his reckless disregard of its or his obligations and duties
under this Agreement, or (ii) is the Distributor to be liable under its
indemnity agreement contained in this Section 4 with respect to any Claim made
against any Indemnified Party unless such Indemnified Party shall have notified
the Distributor in writing within a reasonable time after the summons or other
first legal process giving information of the nature of the Claim shall have
been served upon such Indemnified Party (or after such Indemnified Party shall
have received notice of such service on any designated agent), but failure to
notify the Distributor of any such Claim shall not relieve it from any liability
which it may have to any Indemnified Party otherwise than on account of its
indemnity agreement contained in this Section 4. The Distributor shall be
entitled to participate, at its own expense, in the defense, or, if it so
elects, to assume the defense, of any suit brought to enforce any such Claim,
and, if the Distributor elects to assume the defense, such defense shall be
conducted by counsel chosen by it and satisfactory to each Indemnified Party. In
the event that the Distributor elects to assume the defense of any such suit and
retain such counsel, each Indemnified Party shall bear the fees and expenses of
any additional counsel retained by it but, in case the Distributor does not
elect to assume the defense of any such suit, it shall reimburse the Indemnified
Parties for the reasonable fees and expenses of any counsel retained by them.
Except with the prior written consent of the Distributor, no Indemnified Party
shall confess any Claim or make any compromise in any case in which the
Distributor will be asked to indemnify such Indemnified Party. The Distributor
agrees promptly to notify the Trust of the commencement of any litigation or
proceeding against it in connection with the issuance and sale of any of the
Shares.
Neither the Distributor nor any dealer nor any other person is
authorized to give any information or to make any representation on behalf of
the Trust, other than those contained in the Registration Statement or
Prospectus or Statement of Additional Information.
5. The Trust will pay, or cause to be paid -
(i) all costs and expenses of the Trust, including
fees and disbursements of its counsel, in connection with the
preparation and filing of the Registration Statement,
Prospectus and Statement of Additional Information, and
preparing and mailing to shareholders Prospectuses, Statements
of Additional Information, statements and confirmations and
periodic reports (including the expense of setting in type the
Registration Statement, Prospectus and Statement of Additional
Information or any periodic report);
(ii) the cost of preparing temporary or permanent
certificates for Shares;
(iii) the cost and expenses of delivering to the
Distributor at its office in Boston, Massachusetts all Shares
purchased through it as agent hereunder;
(iv) a distribution fee to the Distributor at an
annual rate not to exceed 0.10% of the Trust's average daily
net assets for its then-current fiscal year, plus an
additional fee at an annual rate not to exceed 0.10% of the
Trust's average daily net assets for its then-current fiscal
year in anticipation of, or as reimbursement for, expenses
incurred by the Distributor in connection with print or
electronic media advertising in connection with the sale of
Shares, subject to the Distribution Plan;
(v) all fees and disbursements of the Transfer Agent
and Custodian with respect to the Trust, subject to the
Trust's Administrative Services Plan;
(vi) a fee to each Shareholder Servicing Agent
(pursuant to a shareholder servicing agreement with each such
Agent), subject to the Trust's Administrative Services Plan;
(vii) a fee to the Administrator of the Trust
(pursuant to the Administrative Services Agreement), subject
to the Trust's Administrative Services Plan; and
(viii) a fee to the investment adviser of the Trust
(pursuant to the Investment Advisory Agreement with such
adviser).
The Distributor agrees that, with respect to the sale of Shares, after
the Prospectus and Statement of Additional Information and periodic reports with
respect to such Fund have been set in type, it will bear the expense (other than
the cost of mailing to shareholders of the Trust) of printing and distributing
any copies thereof which are to be used in connection with the offering or sale
of Shares to any dealer or prospective investor. The Distributor further agrees
that it will bear the expenses of preparing, printing and distributing any other
literature used by the Distributor or furnished by it for use by any dealer in
connection with the offering of the Shares for sale to the public and any
expense of sending confirmations and statements to any dealer having a sales
agreement with the Distributor. The Distributor will also bear the cost of any
compensation paid to dealers in connection with the sale of Shares. The
Distributor also agrees to bear the expenses of qualification of Shares for sale
in the various states and, if necessary or advisable in connection therewith, of
qualifying the Trust as a broker or dealer in any such state.
6. If, at any time during the term of this Agreement, the Trust shall
deem it necessary or advisable in the best interests of the Trust that any
amendment of this Agreement be made in order to comply with any recommendation
or requirement of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under Massachusetts or federal tax laws, it
shall notify the Distributor of the form of amendment which it deems necessary
or advisable and the reasons therefor. If the Distributor declines to assent to
such amendment (after a reasonable time), the Trust may terminate this Agreement
forthwith by written notice to the Distributor without payment of any penalty.
If, at any time during the term of this Agreement, the Distributor requests the
Trust to make any change in its Governing Instruments or in its methods of doing
business which are necessary in order to comply with any requirement of federal
law or regulations of the Securities and Exchange Commission or of a national
securities association of which the Distributor is or may become a member,
relating to the sale of Shares, and the Trust fails (after a reasonable time) to
make any such change as requested, the Distributor may terminate this Agreement
forthwith by written notice to the Trust without payment of any penalty.
7. The Distributor agrees that it will not take any long or short
position in the Shares and that, so far as it can control the situation, it will
prevent any of its Directors or officers from taking any long or short position
in the Shares, except as permitted by the Governing Instruments.
8. This Agreement shall become effective upon its execution and shall
continue in force indefinitely, provided that such continuance is specifically
approved at least annually (i) by the vote of a majority of the Trustees of the
Trust who are not "interested persons" of the Trust or of the Distributor at a
meeting specifically called for the purpose of voting on such approval, and (ii)
by the Board of Trustees of the Trust, or by the "vote of a majority of the
outstanding voting securities" of the Trust. The aforesaid requirement that
continuance of this Agreement be "specifically approved at least annually" shall
be construed in a manner consistent with the 1940 Act.
This Agreement may be terminated at any time by either party without
payment of any penalty on not more than 60 days' nor less than 30 days' written
notice to the other party.
This Agreement shall automatically terminate in the event of its
assignment.
9. CFBDS may subcontract for the performance of its obligations
hereunder with any one or more persons; provided, however, that CFBDS shall not
enter into any such subcontract unless the Trustees of the Trust shall have
found the subcontracting party to be qualified to perform the obligations sought
to be subcontracted; and provided, further, that, unless the Trust otherwise
expressly agrees in writing, CFBDS shall be as fully responsible to the Trust
for the acts and omissions of any subcontractor as it would be for its own acts
or omissions.
10. The terms "vote of a majority of the outstanding voting
securities", "interested person", "assignment" and "specifically approved at
least annually" shall have the respective meanings specified in, and shall be
construed in a manner consistent with, the 1940 Act, subject, however, to such
exemptions as may be granted by the Securities and Exchange Commission
thereunder, and provided, however, that the term "assignment" shall include
(without limitation) any sale, transfer or conversion of a controlling interest
of any class of voting stock of CFBDS or of any entity which holds a controlling
interest of any class of voting stock of CFBDS or another such entity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names on their behalf by the undersigned,
thereunto duly authorized, and their respective seals to be hereto affixed, all
as of the day and year first above written. The undersigned Trustee of the Trust
has executed this Agreement not individually, but as Trustee under the Trust's
Declaration of Trust, dated June 21, 1985, as amended, and the obligations of
this Agreement are not binding upon any of the Trustees or shareholders of the
Trust individually, but bind only the Trust estate.
CITIFUNDS TAX CFBDS, INC.
FREE RESERVES
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Title: President Title: President
