INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT dated as of ______________, 1998 by and
between Colonial Trust II (the "Colonial Trust"), a Massachusetts business trust
established under a Declaration of Trust dated February 14, 1980, as amended, on
behalf of Colonial Money Market Fund (the "Colonial Fund"), a series of the
Colonial Trust, and SR&F Base Trust ("Base Trust"), a Massachusetts trust
established under a Declaration of Trust dated June 30, 1994, as amended, on
behalf of SR&F Cash Reserves Portfolio (the "Portfolio"), a series of the Base
Trust.
WITNESSETH:
WHEREAS, the parties hereto wish to enter into a master/feeder fund
arrangement whereby the Colonial Fund will, at its sole discretion, invest all
or substantially all of its assets in shares of beneficial interest in the
Portfolio;
WHEREAS, the Registration Statement of the Colonial Trust
("Registration Statement") as filed with the Securities and Exchange Commission
pursuant to the Investment Company Act of 1940, as amended (the "1940 Act"), and
the Securities Act of 1933, as amended (the "1933 Act," and together with the
1940 Act, the "Acts"), will disclose information concerning the Portfolio and
the Base Trust; and
WHEREAS, both the Base Trust and the Colonial Trust and their
respective trustees and certain of their respective officers will execute the
Registration Statement;
NOW THEREFORE, the parties hereto agree as follows:
SECTION 1. The Colonial Trust, on behalf of the Colonial Fund, agrees
to indemnify and hold harmless each Base Trust Indemnitee (which term as used in
this Agreement shall mean each of the Base Trust, each of its trustees, each of
its officers who signed the Registration Statement, the Portfolio and each
person who controls the Base Trust within the meaning of Section 15 of the 1933
Act, as applicable) against any losses, claims, expenses, damages or
liabilities, joint or several, to which such Base Trust Indemnitee may become
subject, under the Acts or otherwise, insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any final prospectus or statement of
additional information relating to the shares offered thereby ("Final
Prospectus") or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, but only to
the extent that such statement or omission does not relate to information
relating to the Base Trust or the Portfolio furnished in writing to the Colonial
Trust by the Base Trust; and agrees to reimburse each Base Trust Indemnitee for
any legal or other expenses reasonably incurred by it in connection with
investigating or defending and such loss, claim, damage, liability or action.
SECTION 2. The Base Trust, on behalf of the Portfolio, agrees to
indemnify and hold harmless each Colonial Indemnitee (which term as used in this
Agreement shall mean each of the Colonial Trust, each of its trustees, each of
its officers who signed the Registration Statement, the Colonial Fund and each
person who controls the Colonial Trust within the meaning of Section 15 of the
1933 Act, as applicable) against any losses, claims, expenses, damages or
liabilities, joint or several, to which such Colonial Indemnitee may become
subject, under the Acts or otherwise insofar as such losses, claims, expenses,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Final Prospectus or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necesarry to make the statements therein, in light of the circumstances in which
they were made, not misleading, but only to the extent that such statement or
omission relates to information relating to the Base Trust or the Portfolio
furnished in writing to the Colonial Trust by the Base Trust; and agrees to
reimburse each Colonial Indemnitee for any legal or other expenses reasonably
incurred by it in connection with investigating or defending any such loss,
claim, damage, liability or action.
SECTION 3. Promptly after receipt by an indemnified party under this
Agreement of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Agreement, notify the indemnifying party in writing of the
commencement thereof but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have against any indemnified
party otherwise than under this Agreement. In case such action is brought
against any indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent that it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified parties and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and otherwise to
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of the indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel (which approval shall
not be unreasonably withheld), the indemnifying party will not be liable to such
indemnified party under this Agreement for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the immediately preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel approved by the indemnifying party,
representing all the indemnified parties under this Agreement who are parties to
such action), (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the action, or
(iii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. In no event shall
any indemnifying party be liable in respect of any amounts paid in settlement of
any action unless the indemnifying party shall have approved the terms of such
settlement; provided, however, that such consent shall not be unreasonably
withheld.
SECTION 4. In order to provide for just and equitable contribution in
any action in which a claim for indemnification is made pursuant to this
Agreement but it is judicially determined (by entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Agreement provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that the Colonial Trust
is responsible pro rata in proportion to the proportion of aggregate losses,
claims, expenses, damages or liabilities relating to disclosure not relating to
information relating to the Portfolio or the Base Trust furnished in writing to
the Colonial Trust by the Base Trust and the Base Trust is responsible pro rata
in proportion to the proportion of aggregate losses, claims, expenses, damages
or liabilities relating to information relating to the Base Trust or the
Portfolio furnished in writing to the Colonial Trust by the Base Trust,
provided, however, that no person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to a
contribution from any person who is not guilty of such fraudulent
misrepresentation.
SECTION 5. The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof and are fully informed regarding
said provisions. They further acknowledge that the provisions of this Agreement
fairly allocate the risks in light of the ability of the parties to assure that
adequate disclosure is made in the Registration Statement as required by the
Acts. The parties are advised that federal or state public policy, as
interpreted by the courts in certain jurisdictions, may be contrary to certain
of the provisions of this Agreement, and the parties hereto hereby expressly
waive and relinquish any right or ability to assert such public policy as a
defense to a claim under this Agreement and further agree not to attempt to
assert any such defense.
SECTION 6. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
SECTION 7. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
SECTION 8. No provision of this Agreement shall protect or purport to
protect any trustee or officer of a company (as defined in the 0000 Xxx) against
any liability to the company or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
SECTION 9. A copy of the Declaration of Trust of the Colonial Trust is
on file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that no trustee, officer, agent, employee or shareholder of the
Colonial Trust shall have any personal liability under this Agreement and that
this Agreement is binding only upon the assets and properties of the Colonial
Fund and not other series of the Colonial Trust. This Agreement is executed by
the officer of the Base Trust on behalf of the Base Trust and not individually
and is binding only upon the assets and property of the Portfolio and not the
other series of the Base Trust, nor on any trustee, officer, agent, employee or
shareholder of the Base Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President or Vice
President and its corporate seal to be affixed hereto and attested by its
Secretary or Assistant Secretary.
COLONIAL MONEY MARKET FUND
BY: COLONIAL TRUST II
ATTEST:__________________________ BY:_______________________________
SR&F CASH RESERVES PORTFOLIO
BY: SR&F BASE TRUST
ATTEST:__________________________ BY:________________________________
