LIBERTY FUNDS DISTRIBUTOR, INC.
SELLING AGREEMENT
FROM: Liberty Funds Distributor, Inc. (Member NASD)
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Dealer File Department
Dealer File: 000 000-0000, x6550
Dear Investment Colleague:
As dealer for our account, we offer to sell to you shares of each of
the open-end investment companies for which we are the principal distributor or
underwriter (the "Funds"; individually, a "Fund") listed in Schedule A (for a
current Schedule A, please contact us) as defined in the Investment Company Act
of 1940 (the "Act"), on the following terms:
Orders; Order Procedures
We shall accept orders only on the terms described herein, consistent
with the appropriate Fund prospectus and statement of additional information
(the "Prospectus") and with our order procedures in effect from time to time. We
will not accept any conditional orders, and you will not withhold placing orders
received from your customers so as to profit yourself. By placing an order, you
represent to us and our affiliates and to the Funds that (a) you have the
authority to do so, whether or not you are the dealer of record; (b) the trade
is suitable for your customer and consistent with the Prospectus; (c) the trade
was placed prior to the time at which the applicable Fund values its shares; (d)
you possess all back-up documentation necessary or required under applicable law
related to the purchase and registration of the shares; and (e) all information
you submit is accurate and complete. You agree to purchase shares of the Funds
only from us or from your customers. In our sole discretion, or as we may be
instructed by a Fund, we may accept or reject any order from you or your
customer for shares of any Fund. You shall provide us with a taxpayer
identification number for each account for which you are dealer of record. If
you and we separately agree, you may submit orders to us by facsimile or by
electronic technology in accordance with current industry standards.
Payment for Shares; Registration
You will pay us for Fund shares as required by Rule 15c6-1 under the
Securities Exchange Act of 1934 (the "Exchange Act") or as instructed in our
confirmation to you. For purchase, exchange or redemption orders you place with
us by wire order, telephone (whether manual or automated), via Internet
technology, or via the Fund/SERV program and Retirement Assets Transfer Service
of the National Securities Clearing Corporation ("NSCC"), you will provide us
appropriate instructions and all necessary account and tax identification
information. We may delay registration of shares until we receive timely payment
or sufficient information. Unless you instruct us otherwise by the settlement
date, we may place orders that we accept in an open account registered in your
name. If we do not receive timely payment, instructions or information, we may
cancel the sale or, at our option, sell the shares back to the Funds. If we do
not receive timely payment, information or instructions, or if you do not
promptly correct errors in our confirmation, you are responsible to, and agree
to indemnify us, the Fund, and the Fund's transfer agent (the "Agent") for any
directly related loss, cost, damage or expense, including loss of profit,
commissions, and reasonable attorneys' fees and expenses (including the
reasonable costs of in-house counsel). For purchase orders placed through the
National Securities Clearing Corporation's Fund/SERV system ("Fund-SERV") or the
Retirement Assets Transfer Service of NSCC, you will retain in your files all
applications and other documents and provide us with the original or copies of
such documents upon request.
Suitability and Multiple Classes of Shares
A Fund may offer more than one class of shares as permitted by its
Prospectus; please refer to the Prospectus for availability and details.
Purchases of a class of shares shall be subject to our compliance standards. You
are responsible for determining whether a Fund's shares, and which class of that
Fund's shares, is a suitable investment for your client. With each purchase, you
represent and warrant such suitability to us. Investors affiliated with us and
with you (and their families) have special purchase rights. You shall notify us
within 30 days of any changes in the status of investors affiliated with you.
Sales to the Public; Redemptions; Exchanges
(a) In selling Fund shares to the public you shall act as principal for
your own account, not as agent for a Fund or for us. You shall also act as
principal in all purchases of Fund shares directly from us by a shareholder for
whom you are the dealer of record, and you appoint the Agent to confirm (with a
copy to you) such purchases on your behalf except that the Agent's confirmation
on your behalf shall not include any disclosure required by Rule 10b-10(a)(9)
under the Exchange Act.
(b) You shall sell shares only (i) to your customers at the applicable
public offering price described in the Prospectus and (ii) to the Agent as agent
for the Fund at the applicable redemption price (net asset value). If you act as
principal in purchasing shares for redemption, you shall pay your customer the
amount you receive from the Agent. Our affiliates and we are not liable for any
payments you make to your customer prior to your receipt of amounts from the
Agent.
(c) For Fund shares redeemed within seven business days after purchase,
you shall promptly notify us and refund to us the dealer discount (which shall
be paid to the Fund, together with any portion of the sales charge that we may
retain), and any other commission and other compensation you receive on such
Fund shares. If you comply with this notice and refund requirement, and timely
provide us with appropriate documentation, we shall not charge your customer a
contingent deferred sales charge on shares redeemed within seven business days
after purchase.
(d) You agree to notify us of all "as of" trades. We agree to honor
such trades without loss to you if such trades are validly entered through
Fund/SERV, but not properly executed because of any systems limitation or
failure, provided you furnish purchase and redemption amounts to the Fund no
later than 10:00 a.m., Boston time, on the following business day. You may be
liable for all other types of trades processed on an "as of" basis.
(e) You are responsible to the Fund, us and the Agent for any loss,
cost, damage or expense (including reasonable attorneys' fees and expenses,
which may include the reasonable expenses of in-house counsel) arising from our
or their reliance upon your instructions.
Compensation
(a) You shall receive for the sale of Fund shares the compensation
described in the Prospectus. You will receive no compensation for reinvestments
in a Fund under a reinvestment privilege described in a Prospectus. We will keep
all contingent deferred sales charges (CDSC) unless we elect, in our sole
discretion, to waive them. Should we elect to waive a CDSC, we may require you
to reimburse us for compensation we have previously paid.
(b) To the extent you provide shareholder services to your customers
that are consistent with a Fund's then applicable shareholder services plan, you
may be eligible to receive service fees as described in the Prospectus of that
Fund. The current shareholder services plan requires you to promote the sale of
shares and the retention of assets and to furnish continuing service and
assistance to Fund shareholders, for which service fees may be paid to you. We
shall pay you any applicable service fees quarterly on Fund shares for which you
are the named dealer on the records of the Agent as of the time such service
fees are determined. We will not pay:
(i) Quarterly fees for any customer's account amounting to less than
$1.00;
(ii) Aggregate fees (excluding fees not paid under the preceding
sentence) amounting to less than $25.00 for all your customers'
accounts for all Funds for any quarter.
We generally pay distribution and service fees by the 20th of the month
following the close of each quarter. Our liability to you for the payment of a
distribution or service fee related to a Fund for any period is limited solely
to the proceeds of that Fund's distribution or service fee actually received by
us for such period. We may stop paying distribution and service fees for any
Fund at any time without notice to you. Each Fund reserves the right to
establish and change minimum asset amounts at the representative level and
dealer level as conditions for its obligation to pay service fees.
(c) You may qualify for sales incentives we offer from time to time
related to sales of shares of certain Funds. You may be an underwriter subject
to the Securities Act of 1933 if you receive the entire charge set forth in a
Prospectus on any sale of shares of a Fund. We may also offer other special
sales incentives to firms with which we have executed an Agreement. Consult us
for details.
Authorized Statements
No person is authorized to make any statement concerning a Fund or its
shares except those contained in the appropriate Prospectus and in sales
literature issued by us. We shall furnish Prospectuses and sales literature upon
request. You shall not allow unauthorized statements or information we designate
"for broker use only" to be used with the public. You shall deliver to us for
prior approval any Fund sales literature prepared by you for use with the
public. You shall also deliver a current Fund Prospectus to your customer in
accordance with applicable law.
Warranties; Indemnification We represent and warrant that:
(a) the Prospectus of each Fund and all sales literature we issue for
distribution to the public will comply with all applicable state and Federal
laws, rules and regulations.
(b) each Prospectus and all sales literature we issue will not by
statement or omission be misleading; and
(c) you may legally sell shares of each Fund in every United States
jurisdiction unless we otherwise notify you.
We will indemnify you and agree to hold you harmless against all loss,
cost, damage or expense (including reasonable attorneys fees and expenses)
incurred by you as a result of our breach of the foregoing representations and
warranties if you notify us promptly after receipt of a notice of claim or of
the commencement of any action against you for which you may seek indemnity. We
may participate at our own expense in the defense of such action, or we may
assume the defense of such action with counsel satisfactory to you chosen by us.
If we elect to assume the defense, you may retain additional counsel at your
option for which you shall pay the fees and expenses.
You indemnify and agree to hold the Funds, us, the Agent, and our other
affiliates harmless against all loss, cost, damage or expense (including
reasonable attorneys' fees and expenses, including the reasonable expenses of
in-house counsel) incurred as a result of your breach of any term of this
Agreement or of any representations and warranties you make in this Agreement.
This Paragraph shall survive termination of this Agreement.
NASD; Applicable Laws and Regulations You represent that either:
(a) You are a member in good standing of the National Association of
Securities Dealers, Inc. ("NASD"); or
(b) You are either (i) a "bank" as defined in Section 3(a)(6) of the
Exchange Act or (ii) a "bank holding company" as such term is defined
in the Bank Holding Company Act of 1956, as amended (the "Bank Holding
Company Act"), and in either case:
(x) that you are duly organized, validly existing and in good
standing under the laws of the jurisdiction in which you are
organized;
(y) that you have obtained all authorizations (if any) required
for your lawful execution of this Agreement and your
performance hereunder, and that upon execution and delivery by
you, and assuming due and valid execution and delivery by us,
this Agreement will constitute a valid and binding agreement,
enforceable against you in accordance with its terms.
If you are a "bank holding company" as such term is defined in the Bank
Holding Company Act, you shall prepare an exhibit to be attached hereto setting
forth the names and addresses of the "banks" on whose behalf you are authorized
to execute this Agreement.
(c) You agree to give written notice to us within 30 days of any change
in your NASD membership status or if you shall cease to be a "bank"
as such term is defined in Section 3(a)(6) of the Exchange Act or
a "bank holding company" as such term is defined in the Bank
Holding Company Act.
(d) In conducting all business under this Agreement, you and we shall
abide by the rules and regulations of the NASD and all applicable
state and Federal laws, rules and regulations, including without
limitation any requirement that your customers authorize you in
writing to receive service fees or that you disclose to your
customers that you are receiving service fees.
If you are a "bank" or "bank holding company" you further agree to
comply with the rules of all regulators having jurisdiction over you, including
the "Interagency Statement" dated February 15, 1994, as amended, governing the
sale of nondeposit products on the premises of financial institutions.
Tax Reporting and Withholding
You shall provide us with all necessary information for us to comply
promptly with all applicable requirements of federal, state and local tax
authorities, including backup and nonresident alien withholding requirements,
for all of your customer accounts. You represent that all taxpayer
identification numbers you provide are certified, and that you will not
establish an account without providing us a certified taxpayer identification
number unless otherwise permitted by law. You agree to perform all federal,
state and local tax reporting for purchases redemptions and exchanges of shares
through Fund/SERV.
Book Share Indemnity
You have requested that the Agent effect the redemption of shares of
the Funds not represented by share certificates ("Book-Entry Shares") for your
customers at your direction without the delivery of a properly executed and
guaranteed stock power. You hereby agree to indemnify and hold harmless us, the
Agent, and any Fund whose Book-Entry Shares are so redeemed for all loss, cost,
claims, damage and expense, including reasonable attorneys' fees, that may
arise, directly or indirectly, from the redemption of such Fund's Book-Entry
Shares pursuant to your direction and authorization. This indemnification
includes but is not limited to any claim, demand or cause of action that has
been or may in the future be asserted in respect of redemptions of Book-Entry
Shares pursuant to your direction and authorization, and shall not be exclusive
or in derogation of any other rights to which we, the Agent, or any Fund shall
be entitled under applicable law or pursuant to any agreement.
This agreement shall apply only to wire order redemptions, which the
Agent reasonably believes have been given to it by authorized persons with your
firm and which you originate through Fund/SERV or place directly with the Agent.
The Agent will settle all such redemptions after you furnish appropriate
instructions. By submitting each redemption request, you represent that such
redemption has been properly authorized by the redeeming shareholder.
Your indemnification shall not apply to any loss or expense, including
attorney's fees, occasioned by a failure of the Agent or any Fund to comply with
any properly transmitted instructions authorizing the redemption of Book-Entry
Shares or the settlement of any such redemption, or any negligent act or
omission of the Agent or a Fund, their employees or agents, in effecting any
such redemption or settlement thereof.
If you or we terminate this Agreement for any reason, the
indemnification provisions in this section shall remain effective as to
redemptions placed prior to such termination pursuant to this section.
Termination and Amendment
(a) This Agreement shall terminate automatically if you cease to be a
NASD member or a "bank" or "bank holding company" as defined above.
(b) You or we may terminate this Agreement at any time on ten days'
written notice.
(c) We may amend this Agreement at any time by notice to you. The first
order you place with us after you receive notice of an amendment
from us will constitute your acceptance of the amendment.
Miscellaneous
(a) You represent and warrant to us that all authorizations (if any)
required for your lawful execution of this Agreement and your
performance hereunder have been obtained; and upon execution and
delivery by you, and assuming due and valid execution and delivery
by us, this Agreement will constitute a valid and binding
agreement, enforceable against you in accordance with its terms.
(b) All communications between us shall be transmitted pursuant to our
then-current procedures. You must send communications to us to
the address set forth below or such other address as we may specify
in writing to you. We shall send communications to you to the
address set forth below or such other address as you may specify in
writing to us. Communications shall be effective when posted
prepaid by United States mail or upon receipt following delivery
by other means.
(c) This Agreement replaces all prior selling agreements between us and
shall be effective when (i) we receive a signed copy from you, or
(ii) we accept the first order for Shares that you place after
receiving this Agreement, whichever occurs first.
(d) This Agreement is not assignable, except that we may transfer it to
any successor distributor or principal underwriter of the Funds.
(e) This Agreement shall be construed under Massachusetts law, other
than provisions relating to conflict of laws.
LIBERTY FUNDS DISTRIBUTOR, INC.
By [facsimile signature]
Xxxxx X. Xxxxxxx
Chief Executive Officer
Please execute this Agreement below and return it to us at the address set forth
above; however, we shall consider that you have accepted this Agreement by
placing an order with us for shares of any Fund after you have received a copy
of this Agreement.
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(Dealer Name) (Telephone Number)
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(Street Address)
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(City) (State) (Zip)
By ___________________________________________________________________________
Authorized Signature)
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(Name and Title)
