Exhibit (e)(1)
DISTRIBUTION AGREEMENT
THE GALAXY FUND
THIS AGREEMENT is made as of __________, 2005, by and between THE GALAXY
FUND, a Massachusetts business trust (hereinafter, the "Trust") on behalf of
each series of the Trust listed on Schedule I (each, a "Fund" and collectively,
the "Funds"), and COLUMBIA MANAGEMENT DISTRIBUTORS, INC., a Massachusetts
corporation (the "Distributor"). Absent written notification to the contrary by
either the Trust or the Distributor, each new investment portfolio established
in the future shall automatically become a "Fund" for all purposes hereunder and
shares of each new class established in the future shall automatically become
"Shares" for all purposes hereunder as if set forth on Schedule I.
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Trust desires to retain the Distributor as the exclusive
distributor of the units of beneficial interest in all classes of shares
("Shares") of the Funds, and the Distributor is willing to render such services;
and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended (the "1934 Act") and is a member of
the National Association of Securities Dealers, Inc. (the "NASD").
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Services as Distributor.
1.1. The Distributor will act as agent for the distribution of
Shares in accordance with any instructions of the Trust's Board of Trustees and
with the Trust's registration statement then in effect under the Securities Act
of 1933, as amended (the "1933 Act"), and will transmit promptly any orders
properly received by it for the purchase or redemption of Shares to the Trust or
its transfer agent, or their designated agents. As used in this Agreement, the
term "registration statement" shall mean any registration statement,
specifically including, among other items, any then-current prospectus together
with any related then-current statement of additional information, filed with
the SEC with respect to Shares, and any amendments and supplements thereto which
at any time shall have been filed.
1.2. The Distributor agrees to use appropriate efforts to
solicit orders for the sale of Shares and will undertake such advertising and
promotion, as it believes appropriate in connection with such solicitation. The
Distributor agrees to offer and sell Shares at the applicable public offering
price or net asset value next determined after an order is received. The Trust
understands that the Distributor is and may in the future be the distributor of
shares of
other investment company portfolios including portfolios having investment
objectives similar to those of the Funds. The Trust further understands that
existing and future investors in the Funds may invest in shares of such other
portfolios. The Trust agrees that the Distributor's duties to such portfolios
shall not be deemed in conflict with its duties to the Trust under this
paragraph 1.2.
1.3. The Distributor shall, at its own expense, finance such
activities as it deems reasonable and which are primarily intended to result in
the sale of Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature.
1.4. The Trust shall be responsible for expenses relating to the
execution of any and all documents and the furnishing of any and all information
and otherwise taking, or causing to be taken, all actions that may be reasonably
necessary in connection with the registration of Shares under the 1933 Act and
the Trust under the 1940 Act and the qualification of Shares for sale under the
so-called "blue sky" laws in such states as the Trust directs and in such states
as the Distributor may recommend to the Trust which the Trust approves, and the
Trust shall pay all fees and other expenses incurred in connection with such
registration and qualification. The Trust shall be also responsible for the
preparation, printing and distribution of prospectuses and statements of
additional information to shareholders and the direct expenses of the issue of
Shares.
1.5. The Distributor shall be responsible for preparing,
reviewing and providing advice on all sales literature (e.g., advertisements,
brochures and shareholder communications) with respect to each of the Funds, and
shall file with the NASD or the appropriate regulators all such materials as are
required to be filed under applicable laws and regulations in compliance with
such laws and regulations.
1.6. In connection with all matters relating to this Agreement,
the Trust and the Distributor agree to comply with all applicable laws, rules
and regulations, including, without limitation, all rules and regulations made
or adopted pursuant to the 1933 Act, the 1934 Act, the 1940 Act, the regulations
of the NASD and all other applicable federal and state laws, rules and
regulations. The Distributor agrees to provide the Trust with such
certifications, reports and other information as the Trust may reasonably
request from time to time to assist it in complying with, and monitoring for
compliance with, such laws, rules and regulations. The Distributor agrees to
comply with the Trust's compliance policies and procedures as provided by the
Trust from time to time.
1.7. Whenever in their judgment such action is warranted by
unusual market, economic or political conditions, or by other circumstances of
any kind, the Trust's officers may decline to accept any orders for, or make any
sales of, Shares until such time as those officers deem it advisable to accept
such orders and to make such sales.
1.8. The Trust shall furnish from time to time, for use in
connection with the sale of Shares, such information with respect to the Funds
and Shares as the Distributor may
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reasonably request and the Trust warrants that such information shall be true
and correct. Without limited the foregoing, the Trust shall also furnish the
Distributor upon request with: (a) audited annual and unaudited semi-annual
statements of the Trust's books and accounts with respect to each Fund, and (b)
from time to time such additional information regarding the Funds' financial
condition as the Distributor may reasonably request.
1.9. The Trust may from time to time adopt one or more
distribution plans pursuant to Rule 12b-1 under the 1940 Act. As compensation
for services rendered hereunder, the Distributor shall be entitled to receive
from the Trust the payments set forth on Schedule II attached hereto, as the
same may be amended from time to time by agreement of the parties. In addition,
the Distributor shall be entitled to retain any front-end sales charge imposed
upon the sale of Shares (and reallow a portion thereof) as specified in the
Trust's registration statement and the Trust shall pay to the Distributor the
proceeds from any contingent deferred sales charge imposed on the redemption of
Shares as specified in the Trust's registration statement. The Distributor, from
time to time, may assign to any third party all or any portion of amounts
payable to the Distributor under this Agreement.
1.10. The Distributor shall prepare reports for the Board of
Trustees of the Trust regarding its activities under this Agreement as from time
to time shall be reasonably requested by the Board, including reports regarding
the use of Rule 12b-1 payments received by the Distributor, if any.
1.11. The Distributor is authorized to enter into written
agreements with banks, broker/dealers and other financial institutions
(collectively, "Intermediaries"), under such conditions and based on such
form(s) of sales support agreements as may be approved by the Board of Trustees
from time to time. The Distributor also may enter into such agreements if
consistent with the conditions established by the Board of Trustees for such
agreements and based on such additional forms of agreement as it deems
appropriate, provided that the Distributor determines that the Trust's
responsibility or liability to any person under, or on account of any acts or
statements of any such selling agent under, any such sales support agreement
does not exceed its responsibility or liability under the form(s) approved by
the Board of Trustees, and provided further that the Distributor determines that
the overall terms of any such sales support agreement are not materially less
advantageous to the Trust than the overall terms of the form(s) approved by the
Board of Trustees. In entering into and performing such agreements, the
Distributor shall act as principal and not as agent for the Trust or any Fund.
Upon the failure of any Intermediary to pay for any order for the purchase of
Shares in accordance with the terms of the Fund's prospectus, the Fund shall
have the right to cancel the sale of such Shares and thereupon the Distributor
shall be responsible for any loss sustained as a result thereof.
2. Representations; Indemnification.
2.1. The Trust represents to the Distributor that all
registration statements with respect to Shares and shareholder reports with
respect to Funds filed by the Trust with the SEC, have been prepared in
conformity with the requirements of the 1933 Act, the 1934 Act and the 1940 Act,
as applicable, and rules and regulations of the SEC thereunder. The Trust
further
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represents and warrants to the Distributor that any registration statement, when
such registration statement becomes effective, and any shareholder report, when
such report is filed, will contain all statements required to be stated therein
in conformity with the 1933 Act, the 1934 Act and the 1940 Act, as applicable,
and the rules and regulations of the SEC; that all statements of fact contained
in any such registration statement or shareholder report will be true and
correct when such registration statement becomes effective, or when such
shareholder report is filed; and that no registration statement, when such
registration statement becomes effective, and no shareholder report, when such
shareholder report is filed, will include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading to a purchaser of Shares; provided,
however, that the foregoing representations and warranties shall not apply to
any untrue statement of material fact or omission made in any registration
statement or shareholder report in reliance upon and in conformity with any
information furnished to the Trust by the Distributor or any affiliate thereof
and used in preparation thereof. The Trust authorizes the Distributor and
authorized banks, broker/dealers and other financial institutions to use any
prospectus or statement of additional information in the form furnished from
time to time in connection with the sale of Shares and represented by the Trust
as being the then-current form of prospectus or then-current form of statement
of additional information.
2.2. The Trust agrees to indemnify, defend and hold the
Distributor, its several officers and directors, and any person who controls the
Distributor within the meaning of Section 15 of the 1933 Act free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) which the
Distributor, its officers and directors, or any such controlling person, may
incur under the 1933 Act or under common law or otherwise, arising out of or
based upon (a) any breach by the Trust of any provision of this Agreement, or
(b) any untrue statement, or alleged untrue statement, of a material fact
contained in any registration statement or shareholder report or arising out of
or based upon any omission, or alleged omission, to state a material fact
required to be stated in any registration statement or shareholder report or
necessary to make any statement in such documents not misleading; provided,
however, that the Trust's agreement to indemnify the Distributor, its officers
and directors, and any such controlling person shall not be deemed to cover any
claims, demands, liabilities or expenses arising out of any untrue statement or
alleged untrue statement or omission or alleged omission made in any
registration statement or shareholder report or in any financial or other
statements in reliance upon and in conformity with any information furnished to
the Trust by the Distributor or any affiliate thereof and used in the
preparation thereof, and further provided that the Trust's agreement to
indemnify the Distributor, its officers and directors, and any such controlling
person shall not be deemed to cover any liability to the Trust or its
shareholders to which the Distributor, its officers and directors, or any such
controlling person would otherwise be subject by reason of willful misfeasance,
bad faith or negligence in the performance of the Distributor's, its officers'
or directors', or any such controlling person's duties, or by reason of the
Distributor's, its officers' or directors', or any such controlling person's
reckless disregard of its obligations and duties under this Agreement.
The Trust's agreement to indemnify the Distributor, its officers
and directors, and any such controlling person, as aforesaid, is expressly
conditioned upon the Trust's being
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notified of any action brought against the Distributor, its officers or
directors, or any such controlling person, such notification to be given in
writing and to be transmitted by personal delivery, first class mail, overnight
courier, facsimile or other electronic means to the address or facsimile number
contained in paragraph 9 of this Agreement, or to such other addresses or
facsimile numbers as the parties hereto may specify from time to time in writing
and such notification to be sent to the Trust within a reasonable period of time
after the summons or other first legal process shall have been served. The
failure to so notify the Trust of any such action shall not relieve the Trust
from any liability hereunder, which the Trust may have to the person against
whom, such action is brought by reason of any such untrue or alleged untrue
statement, or omission or alleged omission, except to the extent the Trust has
been actually prejudiced by such delay. The Trust will be entitled to assume at
its own expense the defense of any suit brought to enforce any such claim,
demand or liability, but, in such case, such defense shall be conducted by
counsel of good standing chosen by the Trust and approved by the Distributor,
which approval shall not unreasonably be withheld. In the event the Trust elects
to assume the defense of any such suit and retain counsel of good standing
approved by the Distributor, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them; but in
case the Trust does not elect to assume the defense of any such suit, or in case
the Distributor reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Distributor, its officers and directors, or the
controlling person or persons named as defendant or defendants in such suit, for
the fees and expenses of any counsel retained by the Distributor or them.
The Trust's indemnification agreement contained in this
paragraph 2.2 and the Trust's representations and warranties in this Agreement
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Distributor, its officers or
directors, or any controlling person, and shall survive the delivery of any
Shares. This agreement of indemnity will inure exclusively to the Distributor's
benefit, to the benefit of its several officers and directors, and their
respective estates, and to the benefit of the controlling persons and their
successors. The Trust agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against the Trust or any of its
officers or Trustees in connection with the issue and sale of any Shares.
2.3. The Distributor 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 1933 Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigation or defending such claims, demands or liabilities and any
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, but only to the extent that such liability or expense
incurred by the Trust, its officers or Trustees, or such controlling person
resulting from such claims or demands, shall arise out of or be based upon (a)
any untrue, or alleged untrue, statement of a material fact contained in
information furnished by the Distributor or any affiliate thereof to the Trust
or its counsel and used in the Trust's registration statement or shareholder
reports, or any omission, or alleged omission, to state a material fact in
connection with such information furnished by the Distributor or any affiliate
thereof to the Trust or its counsel required to be stated in such information or
necessary
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to make such information not misleading, (b) any untrue statement of a material
fact contained in any sales literature prepared by the Distributor, or any
omission to state a material fact required to be stated therein or necessary to
make such sales literature not misleading (except to the extent arising out of
information furnished by the Trust to the Distributor for use therein), (c) any
willful misfeasance, bad faith or gross negligence in the performance of the
Distributor's obligations and duties under the Agreement or by reason of its
reckless disregard thereof, or (d) any breach by the Distributor of any
provision of this Agreement. The Distributor's agreement to indemnify the Trust,
its officers and Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon the Distributor's being notified of any action
brought against the Trust, its officers or Trustees, or any such controlling
person, such notification to be given in writing and to be transmitted by
personal delivery, first class mail, overnight courier, facsimile or other
electronic means to the address or facsimile number contained in paragraph 9 of
this Agreement, or to such other addresses or facsimile numbers as the parties
hereto may specify from time to time in writing and such notification to be sent
to the Distributor by the person against whom such action is brought, within a
reasonable period of time after the summons or other first legal process shall
have been served. The failure to so notify the Distributor of any such action
shall not relieve the Distributor or any affiliate thereof from any liability
hereunder, which the Distributor or any affiliate thereof may have to the Trust,
its officers or Trustees, or to such controlling person by reason of any such
untrue or alleged untrue statement, or omission or alleged omission, or other
conduct covered by this indemnity agreement, except to the extent the
Distributor has been actually prejudiced by such delay. The Distributor shall
have the right to control the defense of such action, with counsel of good
standing of its own choosing, approved by the Board of Trustees of the Trust,
which approval shall not unreasonably be withheld, if such action is based
solely upon such misstatement or omission, or alleged misstatement or omission,
on the Distributor's part or any affiliate thereof.
2.4. The Trust agrees to advise the Distributor as soon as
reasonably practicable of the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement then in effect or of the
initiation of any proceeding for that purpose. Thereafter, no Shares shall be
offered by either the Distributor or the Trust under any of the provisions of
this Agreement and no orders for the purchase or sale of Shares hereunder shall
be accepted by the Trust if and so long as the effectiveness of the registration
statement then in effect or any necessary amendments thereto shall be suspended
under any of the provisions of the 1933 Act, or if and so long as a current
prospectus, as required by Section 10(b) of the 1933 Act is not on file with the
SEC; provided, however, that nothing contained in this paragraph 2.4 shall in
any way restrict or have any application to or bearing upon the Trust's
obligation to repurchase Shares from any shareholder in accordance with the
provisions of the Trust's prospectus or Declaration of Trust.
3. Confidentiality.
The Trust and Distributor may receive from each other
information, or access to information, about the customers or about consumers
generally (collectively, "Customer Information") including, but not limited to,
nonpublic personal information such as a customer's name, address, telephone
number, account relationships, account balances and account histories. Each of
the Trust and Distributor agrees on behalf of their respective employees that
all
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information, including Customer Information, obtained pursuant to this Agreement
shall be considered confidential information. Except as permitted by law or
required by order of a court or governmental authority, or required by any
self-regulatory organization, having jurisdiction over the parties, none of the
parties shall disclose such confidential information to any other person or
entity or use such confidential information other than to carry out the purposes
of this Agreement, including its use under applicable provisions of the SEC's
Regulation S-P in the ordinary course of carrying out the purposes of this
Agreement.
4. Anti-Money Laundering Program.
The Distributor represents and warrants that it (a) has adopted
an anti-money laundering compliance program ("AML Program") that satisfies the
requirements of all applicable laws and regulations; and (b) will notify the
Trust promptly if an inspection by the appropriate regulatory authorities of its
AML Program identifies any material deficiency, and will promptly remedy any
material deficiency of which it learns.
5. Limitations of Liability.
Except as provided in paragraph 2.3, the Distributor shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust or any Fund in connection with matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or
negligence on its part in the performance of its duties or from reckless
disregard of its obligations and duties under this Agreement.
6. Term.
6.1. This Agreement shall become effective on the date of its
execution and, unless sooner terminated as provided herein, shall continue in
effect for a period of two (2) years from the date written above. This Agreement
shall thereafter continue from year to year, provided such continuance is
specifically approved at least annually by (i) the Trust's Board of Trustees, or
(ii) a vote of a majority (as defined in the 0000 Xxx) of the outstanding voting
securities of the Fund, provided that in either event the continuance is also
approved by the majority of the Trust's Trustees who are not parties to this
Agreement or interested persons (as defined in the 0000 Xxx) of any such party,
by vote cast in person at a meeting called for the purpose of voting on such
approval.
6.2. This Agreement is terminable with respect to a Fund,
without penalty, on not less than sixty (60) days' written notice, by the
Trust's Board of Trustees, by vote of a majority (as defined in the 0000 Xxx) of
the outstanding voting securities of such Fund, or by the Distributor. This
Agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act). Upon termination, the obligations of the parties under
this Agreement shall cease except for unfulfilled obligations and liabilities
arising prior to termination and the provisions of Sections 2, 3, 5, 6.2, 7, 8
and 9.
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7. Limited Recourse.
The names "The Galaxy Fund" and "Trustees of The Galaxy Fund"
refer respectively to the Trust created by the Declaration of Trust and the
Trustees as Trustees but not individually or personally. A copy of the
Declaration of Trust of the Trust is filed with the Secretary of State of The
Commonwealth of Massachusetts. All parties hereto acknowledge and agree that any
and all liabilities of the Trust arising, directly or indirectly, under this
Agreement will be satisfied solely out of the assets of the Trust and that no
Trustee, officer or shareholder shall be personally liable for any such
liabilities. All persons dealing with any Fund of the Trust must look solely to
the property belonging to such Fund for the enforcement of any claims against
the Trust.
8. Miscellaneous.
8.1. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
8.2. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts as in effect as of the date hereof and the
applicable provisions of the 1940 Act. To the extent that the applicable law of
the Commonwealth i Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of e 1940 Act, the latter shall control.
9. Notices.
Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to such address as may be designated for
the receipt of such notice. Until further notice, it is agreed that the address
of the Trust shall be Xxx Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
xxxx.xxxxxx@xxxxxxxxxxxxxxxxxx.xxx, facsimile 000-000-0000, Attention: Executive
Vice President, and that of the Distributor shall be [INSERT ADDRESS, E-MAIL and
FAX NO.], Attention: Senior Vice President.
10. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
THE GALAXY FUND,
on behalf of its respective Funds
By:
------------------------------------
Xxxxxxxxxxx X Xxxxxx
President
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
By:
----------------------------------
[INSERT NAME]
Senior Vice President
Chief Operating Officer
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SCHEDULE I
Money Market Fund
Government Money Market Fund
U.S. Treasury Money Market Fund
Tax-Exempt Money Market Fund
Connecticut Municipal Money Market Fund
Massachusetts Municipal Money Market Fund
New York Municipal Money Market Fund
Institutional Money Market Fund
Institutional Government Money Market Fund
Institutional Treasury Money Market Fund
[Prime Reserves]
[Government Reserves]
[Tax-Exempt Reserves]
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SCHEDULE II
COMPENSATION
Fund Fee as a percentage of daily net assets
[Prime Reserves [0.75% distribution and 0.25% shareholder services
(Reserve Shares)
Government Reserves 0.75% distribution and 0.25% shareholder services
(Reserve Shares)
Tax-Exempt Reserves 0.75% distribution and 0.25% shareholder services]
(Reserve Shares)]
Approved: June 2, 2005
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