Exhibit e(1)
FORM OF
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 _________ __,
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 _________ __, 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:_______________________ By:__________________________
Title: Title:
