Exhibit (e) (1)
DISTRIBUTION AGREEMENT
Each Massachusetts business trust listed in Appendix 1 hereto (as the
same may from time to time be amended to add one or more additional investment
companies advised by an affiliate of Columbia Management Group, Inc. or to
delete one or more of such trusts), each of such trusts acting severally on its
own behalf and not jointly with any of such other trusts (each of such trusts
being hereinafter referred to as the "Trust"), and Liberty Funds Distributor,
Inc. ("LFDI"), a Massachusetts corporation, agree effective July 22, 2002:
1. APPOINTMENT OF LFDI.
Each Trust may offer an unlimited number of separate investment series
("Funds"), each of which may have multiple classes of shares ("Shares"). Each
Trust appoints LFDI as the principal underwriter and distributor of Shares of
the Funds designated in Appendix 1 as it may be amended from time to time (which
appointment shall be exclusive except as otherwise provided in this Agreement).
2. SALE OF SHARES.
a. LFDI's Right to Purchase Shares From the Fund. LFDI, acting as
principal for its own account and not as agent for each Trust,
shall have the right to purchase Shares and shall sell Shares in
accordance with each Fund's prospectus on a "best efforts" basis.
LFDI shall purchase Shares, at a price equal to the net asset
value, only as needed to fill orders. Except as set forth in
Paragraph 5 below, LFDI will receive all sales charges. LFDI will
notify the Trust at the end of each business day of the Shares of
each Fund to be purchased. LFDI will act only on its own behalf as
principal if it chooses to enter into selling agreements with
selected dealers or others with respect to the offering of Shares
to the public. LFDI shall not utilize any materials in connection
with the sale or offering of Shares except the Trust's then
current prospectus(es) and statement(s) of additional information
and such other materials as the Trust shall provide or approve.
b. Appointment of Agent for Certain Sales of Shares at Net Asset
Value. The Trust may at any time designate its shareholder
servicing, transfer and dividend disbursing agent as its agent to
accept orders for Shares of the Funds (including any Shares of the
Funds on which a front-end sales charge is imposed) at net asset
value in each case from individuals or entities that are entitled
to purchase such shares as provided in the Trust's prospectus, and
to issue Shares directly to such purchasers.
c. Refusal to Sell Shares; Direct Issue of Shares. The Trust may at
any time (i) refuse to sell Shares hereunder, or (ii) issue Shares
directly to shareholders as a stock split or dividend.
3. REDEMPTION OF SHARES.
The Trust will redeem in accordance with each Fund's prospectus all
Shares tendered by LFDI pursuant to shareholder redemption requests. LFDI will
notify the Trust at the end of each business day of the Shares of each Fund
tendered.
4. COMPLIANCE.
LFDI will comply with applicable provisions of the prospectus of a Fund
and with applicable laws and rules relating to the sale of Shares and
indemnifies each Trust for any damage or expense from unlawful acts by LFDI and
persons acting under its direction or authority. In furtherance of and not in
limitation of the foregoing, LFDI agrees to indemnify, defend and hold the
Trust, its several officers and trustees, and any person who controls the Trust
within the meaning of Section 15 of the Securities Act of 1933 as amended (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 reasonable counsel fees incurred in
connection therewith) which the Trust, its officers or trustees, or any such
controlling person, may incur under the 1933 Act, or under common law or
otherwise, which claims, demands, liabilities and expenses 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 LFDI to the Trust or its
counsel expressly for use in the answers to any of the items of the Trust's
registration statement on Form N-1A or in the corresponding statements made in
the Trust's prospectuses 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 LFDI to the Trust or its counsel and required to be
stated in such answers or necessary to make such information not misleading.
LFDI's indemnification agreement contained in this Paragraph 4 shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Trust or its officers or trustees, and shall survive the
delivery of any Shares and the termination of this Agreement. LFDI agrees to
promptly notify the Trust of the commencement of any litigation or proceeding
against LFDI or any of its officers, directors or controlling persons in
connection with the issuance or sale of any of the Shares.
5. EXPENSES.
Each Trust will pay all expenses associated with:
a. the registration and qualification of Shares for sale;
b. shareholder meetings and proxy solicitation;
c. Share certificates;
d. communications to shareholders; and
e. taxes payable upon the issuance of Shares to LFDI.
In connection with the distribution of shares of the Funds, LFDI will
be entitled to receive (a) payments pursuant to any Distribution Plan and
related agreement from time to time in effect between any Trust and LFDI with
respect to a Fund or any particular class of Shares of a Fund, (b) any
contingent deferred sales charges applicable to the redemption of Shares of a
Fund or of any particular class of Shares of a Fund, determined in the manner
set forth in the then current prospectus and statement of additional information
of that Fund, and (c) any applicable front-end sales charges applicable to the
sale of Shares of a Fund or of any particular class of Shares of a Fund, less
any applicable dealer discount determined in the manner set forth in the then
current prospectus and statement of additional information of that Fund. LFDI
agrees to be responsible for implementing and operating any Distribution Plan in
accordance with the terms of such plan.
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If any Shares sold by the Trust on which a front-end sales charge is
imposed are redeemed or repurchased by the Trust or by LFDI as agent or are
tendered for redemption within seven business days after the date of
confirmation of the original purchase of such Shares, LFDI shall forfeit the
amount above the net asset value received by LFDI in respect of such Shares,
provided that the portion, if any, of such amount re-allowed by LFDI to
broker-dealers or other persons shall be repayable to the Trust only to the
extent recovered by LFDI from the broker-dealer or other person involved. LFDI
shall include in each selling agreement with such broker-dealers and other
persons a corresponding provision for the forfeiture by them of their concession
with respect to such Shares sold by them or their principals and redeemed or
repurchased by the Trust or by LFDI as agent (or tendered for redemption) within
seven business days after the date of confirmation of such purchases.
LFDI may assign or sell to a third party (a "Financing Entity") all or
part of (i) the contingent deferred sales charges on any Shares that LFDI is
entitled to receive under this Agreement, and (ii) the payments which LFDI is
entitled to receive from the Trust under any Distribution Plan with respect to
such Shares. LFDI's right to a contingent deferred sales charge on such Shares
and to payments under any Distribution Plan with respect to such Shares, if
assigned or sold to a Financing Entity, shall continue after termination of this
Agreement.
LFDI will pay all expenses associated with advertising and sales
literature including those of printing and distributing prospectuses and
shareholder reports, proxy materials and other shareholder communications used
as sales literature.
6. CONTINUATION, AMENDMENT OR TERMINATION.
a. This Agreement (a) supersedes and replaces any contract or
agreement relating to the subject matter hereof in effect prior to
the date hereof, (b) shall continue in effect only so long as
specifically approved at least annually by the Trustees or
shareholders of the Trust, and (c) may be amended at any time by
written agreement of the parties, each in accordance with the
provisions of the Investment Company Act of 1940, as amended (the
"1940 Act").
b. This Agreement (a) shall terminate immediately upon the
effective date of any later dated agreement relating to the
subject matter hereof, and (b) may be terminated upon 60 days
written notice without penalty by a vote of the Trustees of the
Trust or by LFDI or otherwise in accordance with the 1940 Act and
will terminate immediately in the event of assignment (as defined
under the 1940 Act). Except as set forth in Paragraph 4 above,
upon termination, the obligations of the parties under this
Agreement shall cease except for unfulfilled obligations and
liabilities arising prior to termination. All notices shall be in
writing and delivered to the office of the other party.
7. LIMITATION OF LIABILITY.
Except as set forth in Paragraph 4 above, LFDI shall not be liable to
the Trust for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with the performance of LFDI's obligations and duties
under this Agreement, except a loss resulting from LFDI's willful misfeasance,
bad faith or negligence in the performance of such obligations and duties, or by
reason of its reckless disregard thereof.
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8. CONFIDENTIALITY.
LFDI agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Trust and its prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties under this Agreement, except
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where LFDI may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
9. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
10. DECLARATION OF TRUST.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as Trustees
and not individually and that the obligations of or arising out of the
instrument are not binding upon any of the Trustees or officers or shareholders
individually, but binding only upon the assets and property of the Trust.
Agreed:
THE TRUSTS LISTED ON APPENDIX 1
By:/s/ Xxxx X. X'Xxxxx
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Xxxx X. X'Xxxxx, President
LIBERTY FUNDS DISTRIBUTOR, INC.
By:/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, Chief Executive Officer
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APPENDIX 1 TO DISTRIBUTION AGREEMENT
TRUST FUNDS
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The Galaxy Fund Galaxy Money Market Fund
Galaxy Government Money Market Fund
Galaxy U.S. Treasury Money Market Fund
Galaxy Tax-Exempt Money Market Fund
Galaxy Connecticut Municipal Money Market Fund
Galaxy Massachusetts Municipal Money Market Fund
Galaxy New York Municipal Money Market Fund
Galaxy Institutional Money Market Fund
Galaxy Institutional Government Money Market Fund
Galaxy Institutional Treasury Money Market Fund
Galaxy Prime Reserves
Galaxy Government Reserves
Galaxy Tax-Exempt Reserves
Galaxy Short-Term Bond Fund
Galaxy Intermediate Government Income Fund
Galaxy High Quality Bond Fund
Galaxy Corporate Bond Fund
Galaxy Tax-Exempt Bond Fund
Galaxy Intermediate Tax-Exempt Bond Fund
Galaxy Connecticut Municipal Bond Fund
Galaxy Connecticut Intermediate Municipal Bond Fund
Galaxy Florida Municipal Bond Fund
Galaxy Massachusetts Municipal Bond Fund
Galaxy Massachusetts Intermediate Municipal Bond Fund
Galaxy New Jersey Municipal Bond Fund
Galaxy New York Municipal Bond Fund
Galaxy Pennsylvania Municipal Bond Fund
Galaxy Rhode Island Municipal Bond Fund
Galaxy Asset Allocation Fund
Galaxy Equity Value Fund
Galaxy Equity Growth Fund
Galaxy Growth Fund II
Galaxy Equity Income Fund
Galaxy Growth and Income Fund
Galaxy International Equity Fund
Galaxy Small Company Equity Fund
Galaxy Small Cap Value Fund
Galaxy Strategic Equity Fund
Galaxy Large Cap Growth Fund
Galaxy Large Cap Value Fund
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TRUST FUNDS
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The Galaxy VIP Fund Galaxy VIP Money Market
Galaxy VIP Equity Fund
Galaxy VIP Growth and Income Fund
Galaxy VIP Small Company Growth Fund
Galaxy VIP Columbia Real Estate Equity Fund II
Galaxy VIP Asset Allocation Fund
Galaxy VIP High Quality Bond Fund
Galaxy VIP Columbia High Yield Fund II
Galaxy Fund II Galaxy II Large Company Index Fund
Galaxy II Small Company Index Fund
Galaxy II Utility Index Fund
Galaxy II U.S. Treasury Index Fund
Galaxy II Municipal Bond Fund
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