COLUMBIA REAL ESTATE EQUITY FUND, INC.
INVESTMENT ADVISORY CONTRACT
This Agreement is made the 24th day of February, 1994 between
COLUMBIA REAL ESTATE EQUITY FUND, INC., an Oregon corporation, (the "Fund")
and COLUMBIA FUNDS MANAGEMENT COMPANY, an Oregon corporation having its
principal place of business in Portland, Oregon (the "Adviser"). The Fund
is registered as an open-end investment company pursuant to the Investment
Company Act of 1940 (the "Act"). The Adviser is registered as an
investment adviser pursuant to the Investment Advisers Act of 1940. This
Agreement relates to services to be performed by the Adviser with respect to
the Fund.
The parties agree as follows:
1. DUTIES OF ADVISER. The Adviser shall regularly provide the Fund
with research, advice, and supervision with respect to investment matters and
shall furnish continuously an investment program, recommend what securities
shall be purchased or sold and what portion of the Fund's assets shall be
held invested or uninvested, subject always to the provisions of the Act and
the Fund's Articles of Incorporation and Bylaws, and amendments thereto,
which amendments shall be furnished to the Adviser by the Fund. The Adviser
shall take any steps necessary or appropriate to carry out its decisions in
regard to the foregoing matters and the general conduct of the business of
the Fund. The Adviser may take into consideration receipt of research and
statistical information and other services rendered to the Fund in the
allocation of commissions from portfolio brokerage business.
2. ALLOCATION OF CHARGES AND EXPENSES.
(a) The Adviser shall pay or reimburse the Fund for payments made
by the Fund for all executive salaries and executive expenses, office rent of
the Fund, ordinary office expenses (other than the expense of clerical
services relating to the administration of the Fund), and for any other
expenses 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 Act.
The Adviser shall provide investment advisory, statistical, and research
facilities and all clerical services relating to research, statistical, and
investment work with respect to the Fund.
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(b) The Adviser shall not be required to pay any expenses of the
Fund other than those enumerated in this Agreement. The Fund will assume all
other costs, including the cost of its custodian, legal, auditing, and
accounting expenses, disinterested directors' fees, taxes, and governmental
fees, interest, brokers' commissions, transaction expenses, cost of stock
certificates, and any other expenses (including clerical expenses) of issue,
sale, repurchase, or redemption of shares, expenses of registering or
qualifying shares for sale, transfer taxes, and all expenses of preparing the
Fund's registration statement and prospectus, and the cost of printing and
delivering to shareholders prospectuses and reports.
3. COMPENSATION OF THE ADVISER. For the services to be rendered, the
facilities to be furnished, and the payments to be made by the Adviser, as
provided in Sections 1 and 2 hereof, for each calendar month the Fund shall
pay to the Adviser a fee computed at the annual rate of .75 of 1 percent of
daily net assets. If the asset value is not required to be determined on any
particular business day, then for the purposes of this Section 3, the asset
value of a share as last determined shall be deemed to be the asset value of
a share as of the close of business on that day. If there is no business day
in any calendar month, the fee shall be computed on the basis of the asset
value of a share as last determined, multiplied by the average number of
shares outstanding on the last day of the month.
4. COVENANTS OF THE ADVISER. In connection with purchases or sales
of portfolio securities for the account of the Fund, neither the Adviser nor
any officer, director, or employee of the Adviser shall act as a principal.
The Adviser covenants that it and its employees will comply with investment
restrictions of the Fund's Bylaws applicable to them. If the Adviser or any
of its affiliates give any advice to clients concerning the shares of the
Fund, it will act solely as investment counsel for the clients and not on
behalf of the Fund.
5. LIMITATION ON LIABILITY OF ADVISER. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss suffered
by the Fund in connection with the matters to which this agreement relates,
except a loss resulting from willful malfeasance, bad faith, or gross
negligence on the part of the Adviser in the performance of its duties or
from reckless disregard by the Adviser of its obligations and duties under
this Agreement.
6. DURATION AND TERMINATION OF THIS AGREEMENT.
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(a) This Agreement shall remain in force for two years from the
date hereof, and it may be continued from year to year thereafter if approved
annually by a vote of a majority of the Fund's shareholders or by its Board
of Directors and in either case a vote of a majority of the Board of
Directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on
such approval.
(b) This Agreement may be terminated at any time without the
payment of any penalty by vote of the Board of Directors of the Fund, by vote
of a majority of the outstanding shares of the Fund, or by the Adviser, on 60
days written notice to the other party.
(c) This Agreement shall automatically terminate if it is
assigned. The Adviser shall notify the Fund of any change in the officers or
directors of the Adviser within a reasonable time after the change. The
terms "assignment," "vote of a majority of the outstanding voting
securities", and "interested persons" shall have the meanings specified in
the Act.
IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the day and year first written above.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
By____________________________________
Title:
COLUMBIA FUNDS MANAGEMENT COMPANY
By_____________________________________
Title:
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