DISTRIBUTION AGREEMENT
DATED: February 24, 0000
XXXXXXX: XXXXXXXX XXXX XXXXXX EQUITY FUND, INC.
an Oregon corporation
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 the Fund
AND: COLUMBIA FINANCIAL CENTER
INCORPORATED, an Oregon corporation
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 the Distributor
The Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended, (Investment Company
Act). The Distributor is engaged principally in the business of distributing
shares of the investment companies sponsored and managed by Columbia Funds
Management Company (the Adviser), is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended, (the Exchange Act), and is a
member of the National Association of Securities Dealers, Inc. (NASD). The
Fund desires the Distributor to act as a distributor in the public offering
of its shares.
The parties agree as follows:
1. DELIVERY OF FUND DOCUMENTS. The Fund shall make available promptly
to the Distributor copies of any registration statements filed by it with the
Securities and Exchange Commisssion (SEC) under the Securities Act of 1933,
as amended, (Securities Act) or the Investment Company Act, together with any
financial statements and exhibits included therein, and all amendments or
supplements thereto.
2. SALE OF SHARES. Subject to the provisions of Sections 3, 4, and 6
and to any minimum purchase requirements from time to time described in the
Fund's prospectus, the Distributor is authorized to sell, as agent on behalf
of the Fund, shares of the Fund's capital stock (Shares) authorized for
issuance and registered under the Securities Act. The Distributor may also
sell Shares under offers of exchange between and among the investment
companies for which the Adviser acts as investment adviser (Columbia Funds).
Sales will be made by the Distributor on behalf of the Fund by accepting
unconditional orders to purchase Shares placed with the Distributor by
investors, and purchases will be made by the Distributor only after
acceptance by the Distributor of orders. The sales price to the public of
Shares shall be the public offering price as defined in Section 5.
3. SALE OF SHARES BY THE FUND. The Fund reserves the right to sell
Shares to investors pursuant to applications received and accepted by the
Fund or its transfer agent or any other lawful method. The Fund also
reserves the right to issue
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Shares in connection with the merger or consolidation of any other investment
company, trust, or personal holding company with the Fund or the Fund's
acquisition by purchase or otherwise of all or substantially all of the
assets of an investment company, trust, or personal holding company. Any
right granted to the Distributor to accept orders for Shares, to make sales
on behalf of the Fund, or to purchase Shares for resale will not apply to
Shares issued in connection with the merger or consolidation of any other
investment company with the Fund or its acquisition by purchase or otherwise
of all or substantially all of the assets of any investment company, trust,
or personal holding company, or substantially all of the outstanding shares
or interests of any such entity, and this right shall not apply to shares
that may be offered by the Fund to shareholders by virtue of their being
shareholders of the Fund.
4. SHARES COVERED BY THIS AGREEMENT. This Agreement relates to the
issuance and sale of Shares that are duly authorized, registered, and
available for sale by the Fund, including redeemed or repurchased Shares if
and to the extent they may be legally sold and if, but only if, the Fund
authorizes the Distributor to sell them.
5. PUBLIC OFFERING PRICE. All Shares sold by the Distributor pursuant
to this Agreement shall be sold at the public offering price. The public
offering price for all accepted subscriptions will be the net asset value per
share, as determined in the manner provided in the Fund's articles of
incorporation or bylaws, as now in effect or as later amended (and as
reflected in the Fund's then current prospectus), next after the order is
accepted by the Distributor. The Distributor will process orders submitted
by brokers for the sale of Shares at the public offering price exclusive of
any commission charged by such broker to the customer.
6. SUSPENSION OF SALES. If and whenever the determination of net
asset value is suspended and until the suspension is terminated, no further
orders for Shares shall be accepted by the Distributor except unconditional
orders placed with the Distributor before it had knowledge of the suspension.
In addition, the Fund reserves the right to suspend sales and the
Distributor's authority to accept orders for Shares on behalf of the Fund if,
in the judgment of the board of directors of the Fund, it is in the best
interests of the Fund to do so. The suspension will continue for the period
determined by the Board of Directors of the Fund. In that event, no orders
to purchase Shares shall be processed or accepted by the Distributor on
behalf of the Fund while the suspension remains in effect, except for Shares
necessary to cover unconditional orders accepted by the Distributor before it
had knowledge of the suspension, unless otherwise directed by the board of
directors of the Fund.
7. SOLICITATION OF ORDERS. In consideration of the rights granted to
the Distributor under this Agreement, the Distributor will use its best
efforts (but only in jurisdictions in which the Distributor may lawfully do
so) to obtain from investors unconditional orders for Shares authorized for
issuance by the Fund and registered under the Securities Act, provided that
the Distributor may in its discretion reject any order to purchase Shares.
This does not obligate the Distributor to register or maintain its
registration as a broker or dealer under the securities laws of any
jurisdiction if, in the discretion of the Distributor, registration is not
practical or feasible. The Fund shall make available to the Distributor at
the expense of the
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Distributor the number of copies of the Fund's then effective prospectus as
the Distributor reasonably requests. The Fund shall furnish to the
Distributor copies of all information, financial statements, statements of
additional information, and other papers the Distributor reasonably requests
for use in connection with the distribution of Shares.
8. AUTHORIZED REPRESENTATIONS.
(a) The Fund is not authorized by the Distributor to give on
behalf of the Distributor any information or to make any representations
other than the information and representations contained in a registration
statement or prospectus filed with the SEC under the Securities Act or the
Investment Company Act covering Shares, as the registration statement and
prospectus is amended or supplemented from time to time.
(b) The Distributor is not authorized by the Fund to give on
behalf of the Fund any information or to make any representations in
connection with the sale of Shares other than the information and
representations contained in a registration statement or prospectus filed
with the SEC under the Securities Act or the Investment Company Act covering
Shares, as the registration statement and prospectus is amended or
supplemented from time to time,or contained in shareholder reports or other
material that may be prepared by or on behalf of the Fund for the
Distributor's use. This paragraph shall not be construed to prevent the
Distributor from preparing and distributing tombstone and sales literature or
other materials it deems appropriate. No person other than the Distributor
is authorized to act as principal underwriter (as defined in the Investment
Company Act) for the Fund.
9. REGISTRATION AND SALE OF ADDITIONAL SHARES. The Fund agrees to
register with the SEC an indefinite number of Shares pursuant to Rule 24f-2
under the Investment Company Act. The Fund will, in cooperation with the
Distributor, take action necessary from time to time to qualify the Shares
(registered or otherwise qualified for sale under the Securities Act) in any
jurisdiction agreeable to the Distributor and Fund and to maintain such
qualification.
10. EXPENSES.
(a) The Distributor shall pay (or will enter into arrangements
providing that persons other than the Distributor shall pay) all fees and
expenses:
(i) incurred in connection with its registration as a broker
or dealer or the registration or qualification of its officers, directors, or
representatives under the laws of various jurisdictions; and
(ii) that, if otherwise borne by the Fund, would cause the
Fund to "be deemed to be acting as a distributor of securities of which it
is the issuer, other than through an underwriter," pursuant to Rule 12b-1
under the Investment Company Act.
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(b) The Fund shall pay all other fees and expenses incurred by the
Fund and not allocated to the Distributor pursuant to 10(a) above.
11. CONFORMITY WITH LAW. The Distributor agrees that in selling Shares
it shall conform in all respects with the laws of the United States and any
jurisdiction in which the Shares are offered for sale by the Distributor
pursuant to this Agreement and the rules and regulations of the NASD.
12. INDEPENDENT CONTRACTOR. The Distributor shall be an independent
contractor, and neither the Distributor nor any of its officers, directors,
employees, or representatives is or shall be an employee of the Fund in the
performance of the Distributor's duties hereunder. The Distributor shall be
responsible for its own conduct and the employment, control, and conduct of
its agents and employees and for injury to its agents or employees or to
others through its agents or employees. The Distributor assumes full
responsibility for its agents and employees, as such, under applicable
statutes and agrees to pay all employee taxes thereunder.
13. INDEMNIFICATION.
(a) The Distributor agrees to indemnify and hold harmless the Fund
and each of its directors, officers, employees, and representatives and each
person, if any, who controls the Fund within the meaning of Section 15 of the
Securities Act against any and all losses, liabilities, damages, claims, or
expenses (including the reasonable costs of investigating or defending any
alleged loss, liability, damage, claim, or expense and reasonable legal
counsel fees incurred in connection therewith) to which the Fund or such
directors, officers, employees, representatives, or controlling person may
become subject under the Securities Act, under any other statute, at common
law, or otherwise, arising out of the acquisition of any Shares by any person
which (i) may be based upon any wrongful act by the Distributor or any of
Distributor's directors, officers, employees, or representatives or (ii) may
be based upon any untrue statement or alleged untrue statement of a material
fact contained in a registration statement, prospectus, shareholder report,
or other information covering Shares filed or made public by the Fund or any
amendment thereof or supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading if such statement or omission
was made in reliance upon information furnished to the Fund by the
Distributor. In no case (x) is the Distributor's indemnity in favor of the
Fund or any person indemnified to be deemed to protect the Fund or such
indemnified person against any liability to which the Fund or such person
would otherwise be subject by reason of willful misfeasance, bad faith, or
gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement or (y) is the
Distributor to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Fund or any person
indemnified unless the Fund or such person, as the case may be, shall have
notified the Distributor in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Fund or upon such
person (or after the Fund or such person shall have received notice of such
service on any designated agent). Failure to notify the Distributor of any
such claim, however, shall not relieve the
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Distributor from any liability the Distributor may have to the Fund or any
person against whom such action is brought otherwise than on account of the
Distributor's indemnity agreement contained in this paragraph.
(b) The Distributor shall be entitled to participate, at its own
expense, in the defense, or, if the Distributor elects, to assume the
defense, of any suit brought to enforce any such claim, but, if the
Distributor elects to assume the defense, such defense shall be conducted by
legal counsel chosen by the Distributor and satisfactory to the Fund, to its
directors, officers, employees, or representatives, or to any controlling
person or persons, defendant or defendants, in the suit. If the Distributor
elects to assume the defense of any such suit and retain such legal counsel,
the Fund, its directors, officers, employees, representatives, or controlling
person or persons, defendant or defendants in the suit, shall bear the fees
and expenses of any additional legal counsel retained by them. If the
Distributor does not elect to assume the defense of any such suit,
Distributor will reimburse the Fund, such directors, officers, employees,
representatives, or controlling person or persons, defendant or defendants
in such suit for the reasonable fees and expenses of any legal counsel
retained by them. The Distributor agrees to notify promptly the Fund of the
commencement of any litigation or proceedings against it or any of its
directors, officers, employees, or representatives in connection with the
issue or sale of any Shares.
(c) The Fund agrees to indemnify and hold harmless the Distributor
and each of its directors, officers, employees, and representatives and each
person, if any, who controls the Distributor within the meaning of Section 15
of the Securities Act against any and all losses, liabilities, damages,
claims, or expenses (including the reasonable costs of investigating or
defending any alleged loss, liability, damage, claim, or expense and
reasonable legal counsel fees incurred in connection therewith) to which the
Distributor or such directors, officers, employees, representatives, or
controlling person may become subject under the Securities Act, under any
other statute, at common law, or otherwise, arising out of the acquisition of
any Shares by any person which (i) may be based upon any wrongful act by the
Fund or any of Fund's directors, officers, employees, or representatives or
(ii) may be based upon any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, prospectus, shareholder
report, or other information covering Shares filed or made public by the Fund
or any amendment thereof or supplement thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading if such statement or
omission was made in reliance upon information furnished to Distributor by
the Fund. In no case (x) is the Fund's indemnity in favor of the Distributor
or any person indemnified to be deemed to protect the Distributor or such
indemnified person against any liability to which the Distributor or such
person would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties under this Agreement or (y) is
the Fund to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Distributor or person
indemnified unless the Distributor or such person, as the case may be, shall
have notified the Fund in writing of the claim within a reasonable time after
the summons or other first written notification giving
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information of the nature of the claim shall have been served upon the
Distributor or upon such person (or after the Distributor or such person
shall have received notice of such service on any designated agent). Failure
to notify the Fund of any such claim, however, shall not relieve the Fund
from any liability which the Fund may have to the Distributor or any person
against whom such action is brought otherwise than on account of the Fund's
indemnity agreement contained in this paragraph.
(d) The Fund shall be entitled to participate, at its own
expense, in the defense, or, if the Fund elects, to assume the defense, of
any suit brought to enforce any such claim, but, if the Fund elects to assume
the defense, such defense shall be conducted by legal counsel chosen by the
Fund and satisfactory to the Distributor, to its directors, officers,
employees, or representatives, or to any controlling person or persons,
defendant or defendants, in the suit. If the Fund elects to assume the
defense of any such suit and retain such legal counsel, the Distributor, its
directors, officers, employees, representatives, or controlling person or
persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional legal counsel retained by them. If the Fund does
not elect to assume the defense of any such suit, the Fund will reimburse the
Distributor, such directors, officers, employees, representatives, or
controlling person or persons, defendant or defendants in such suit for the
reasonable fees and expenses of any legal counsel retained by them. The Fund
agrees to notify promptly the Distributor of the commencement of any
litigation or proceedings against it or any of its directors, officers,
employees, or representatives in connection with the issue or sale of any
Shares.
14. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective upon its execution (effective date) and, unless terminated
as provided, shall remain in effect for two years from the date first set
forth above (the date of its execution) and from year to year thereafter, but
only so long as such continuance is specifically approved at least annually
by the vote of a majority of the directors of the Fund who are not interested
persons of the Distributor or of the Fund, cast in person at a meeting called
for the purpose of voting on such approval, and by vote of the directors of
the Fund or of a majority of the outstanding voting securities of the Fund.
This Agreement may, on 60 days written notice, be terminated at any time,
without the payment of any penalty, by the vote of a majority of the
directors of the Fund who are not interested persons of the Distributor or
the Fund, by a vote of a majority of the outstanding voting securities of the
Fund, or by the Distributor. This Agreement will automatically terminate in
the event of its assignment. In interpreting the provisions of this Section
14, the definitions contained in Section 2(a) of the Investment Company Act
(including the definitions of "interested person," "assignment," and
"majority of the outstanding securities") shall be applied.
15. AMENDMENT OF THIS AGREEMENT. This Agreement may be amended,
waived, discharged, or terminated only by a written instrument signed by the
party against which enforcement of the amendment, waiver, discharge, or
termination is sought. If the Fund at any time deems it necessary or
advisable in the best interests of the Fund that any amendment of this
Agreement be made to comply with the recommendations or requirements of the
SEC or other governmental authority or to
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obtain any advantage under state or federal tax laws and notifies the
Distributor of the form of the amendment and the reasons therefor, and if the
Distributor declines to assent to the amendment, the Fund may terminate this
Agreement immediately without regard to the 60-day period referred to in
Section 14. If the Distributor at any time requests that a change be made in
the Fund's articles of incorporation or bylaws or in its methods of doing
business to comply with any requirements of federal law or regulations of the
SEC or of a national securities association of which the Distributor is or
may be a member relating to the sale of Shares, and the Fund does not make
such necessary change within a reasonable time, the Distributor may terminate
this Agreement immediately without regard to the 60-day period referred to in
Section 14.
16. MISCELLANEOUS. It is understood and expressly stipulated that
neither the shareholders of the Fund nor the directors of the Fund shall be
personally liable hereunder. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument.
17. NOTICE. Any notice required or permitted to be given by either
party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the address set forth on the first page of this Agreement.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
By____________________________________
Title:
COLUMBIA FINANCIAL CENTER INCORPORATED
By____________________________________
Title:
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