UNDERWRITING AGREEMENT BETWEEN
COLUMBIA FLOATING RATE FUND
AND COLUMBIA FUNDS DISTRIBUTOR, INC.
THIS UNDERWRITING AGREEMENT ("Agreement"), made as of the 3rd day of
August, 1999, as amended and restated as of the 1st day of November, 2003, by
and between Columbia Floating Rate Fund, a business trust organized and existing
under the laws of the Commonwealth of Massachusetts (hereinafter called the
"Fund"), and Columbia Funds Distributor, Inc., a corporation organized and
existing under the laws of the Commonwealth of Massachusetts (hereinafter called
the "Distributor").
WITNESSETH:
WHEREAS, the Fund is engaged in business as a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended ("ICA-40"); and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934, as amended ("SEA-34") and the laws of each
state (including the District of Columbia and Puerto Rico) in which it engages
in business to the extent such law requires, and is a member of the National
Association of Securities Dealers ("NASD") (such registrations and membership
are referred to collectively as the "Registrations"); and
WHEREAS, the Fund desires the Distributor to act as the distributor in the
public offering of its Shares of beneficial interest (hereinafter called
"Shares"); and
WHEREAS, the Fund shall pay all charges of its transfer, shareholder
recordkeeping, dividend disbursing and redemption agents, if any; all expenses
of notices, proxy solicitation material and reports to shareholders; all
expenses of preparation of annual or more frequent revisions of the Fund's
Prospectus and Statement of Additional Information ("SAI") and of supplying
copies thereof to shareholders; all expenses of registering and maintaining the
registration of the Fund under ICA-40 and of the Fund's Shares under the
Securities Act of 1933, as amended ("SA- 33"); all expenses of qualifying and
maintaining qualification of such Fund and of the Fund's Shares for sale under
securities laws of various states or other jurisdictions and of registration and
qualification of the Fund under all laws applicable to the Fund or its business
activities; and
WHEREAS, Columbia Management Advisors, Inc., investment adviser to the
Fund, or its affiliates, may pay expenses incurred in the sale and promotion of
the Fund except as provided in the Fund's 12b-1 plan;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. Appointment. The Fund appoints Distributor to act as principal
underwriter (as such term is defined in Sections 2(a)(29) of ICA-40)
of its Shares for each series or class of the Fund set forth on
Schedule A hereto.
2. Delivery of Fund Documents. The Fund has furnished Distributor with
properly certified or authenticated copies of each of the following in
effect on the date hereof and shall furnish Distributor from time to
time properly certified or authenticated copies of all amendments or
supplements thereto:
(a) Agreement and Declaration of Trust;
(b) By-Laws;
(c) Resolutions of the Board of Trustees of the Fund (hereinafter referred
to as the "Board") selecting Distributor as distributor and approving
this form of agreement and authorizing its execution.
The Fund shall furnish Distributor promptly with copies of any registration
statements filed by it with the Securities and Exchange Commission ("SEC") under
SA-33 or ICA-40, together with any financial statements and exhibits included
therein, and all amendments or supplements thereto hereafter filed.
The Fund also shall furnish Distributor such other certificates or
documents which Distributor may from time to time, in its discretion, reasonably
deem necessary or appropriate in the proper performance of its duties.
3. Distribution of Shares.
(a) Subject to the provisions of Paragraphs 6, 7, 10, 11, 12, 13 and 14
hereof, and to such minimum purchase and other requirements as may
from time to time be indicated in the Fund's Prospectus, Distributor,
acting as principal for its own account and not as agent for the Fund,
shall have the right to purchase Shares from the Fund. Distributor
shall sell Shares only in accordance with the Fund's Prospectus, on a
"best efforts" basis. Distributor shall purchase Shares from the Fund
at a price equal to the net asset value, shall sell Shares at the
public offering price as defined in Paragraph 8, and shall retain all
sales charges.
(b) The Fund shall pay all expenses associated with notices, proxy
solicitation material, the preparation of annual or more frequent
revisions to the Fund's Prospectus and SAI and of printing and
supplying the currently effective Prospectus and SAI to shareholders,
other than those necessitated by Distributor's activities or rules and
regulations related to Distributor's activities where such amendments
or supplements result in expenses which the Fund would not otherwise
have incurred.
(c) The Distributor (or its affiliates) shall pay the costs of printing
and supplying all copies of the Prospectus and SAI that it may
reasonably request for use in connection with the distribution of
Shares. The Distributor will also pay the expenses of the preparation,
excluding legal fees, and printing of all amendments and supplements
to
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the Fund's Prospectus and SAI if the amendment or supplement arises
from Distributor's activities or rules and regulations related to
Distributor's activities and those expenses would not otherwise have
been incurred by the Fund. Distributor will pay all expenses incurred
by Distributor in advertising, promoting and selling Fund Shares.
(d) Prior to the continuous offering of any Fund Shares, commencing on a
date agreed upon by the Fund and the Distributor, it is contemplated
that the Distributor may solicit subscriptions for such Shares during
a subscription period which shall last for such period as may be
agreed upon by the parties hereto. The subscriptions will be payable
within three business days after the termination of the subscription
period, at which time the Fund will commence operations.
4. Selling Agreements. Distributor is authorized to enter into agreements
with other broker-dealers providing for the solicitation of unconditional orders
for purchases of the Fund's Shares authorized for issuance and registered under
SA-33 and fix therein the portion of the sales charge which may be reallowed to
the selected dealers, as permitted under the Fund's prospectus. All such
agreements shall be either in the form of agreement attached hereto or in such
other form as may be approved by the officers of the Fund ("Selling Agreement").
Within the United States, the Distributor shall offer and sell Shares to such
selected dealers as are members in good standing of the NASD; "banks" 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 of 1956, as
amended, duly organized, validly existing and in good standing under the laws of
the jurisdiction in which it was organized; and such other entities or
purchasers as otherwise mutually agreed in writing.
5. Conduct of Business. Other than as set forth in the Fund's currently
effective prospectus, Distributor will not distribute any sales material or
statements except literature or advertising which conforms to the requirements
of federal and state securities laws and regulations which have been filed,
where necessary, with the appropriate regulatory authorities. Upon the Fund's
request, Distributor will furnish the Fund with copies of all such materials
prior to their use. Any sales material or statements the substance of which is
not included in the Prospectus or SAI shall be submitted for advance approval by
the Fund.
6. Solicitation of Orders to Purchase Shares by Fund. The rights granted
to the Distributor shall be non-exclusive in that the Fund reserves the right to
solicit purchases from, and sell its Shares to, investors. Further, the Fund
reserves the right to issue 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 the purchase or otherwise, of all
or substantially all of the assets of an investment company, trust or personal
holding company, or substantially all of the outstanding Shares or interests of
any such entity. Any right granted to Distributor to solicit purchases of Shares
will not apply to Shares that may be offered by the Fund to shareholders by
virtue of their being shareholders of the Fund.
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7. Shares Covered by this Agreement. This Agreement relates to the
solicitation of orders to purchase Shares that are duly authorized and
registered and available for sale by the Fund, including redeemed or repurchased
Shares if and to the extent that they may be legally sold and if, but only if,
the Fund authorizes the Distributor to sell them.
8. Public Offering Price. The public offering price for the Fund's Shares
will be the net asset value per Share next determined by the Fund after the
Distributor or its appointed agent receives the order plus any sales charge as
set forth in the Fund's Prospectus. The net asset value per Share shall be
determined in the manner provided in the Fund's Agreement and Declaration of
Trust as now in effect or as they may be amended, and as reflected in the Fund's
then current Prospectus and SAI.
9. Compensation.
(a) Sales Charge. Distributor shall be entitled to charge a sales charge
on the sale or redemption, as appropriate, of each series and class of
the Fund's Shares as set forth in the Fund's then current Prospectus.
Distributor may allow any dealers with which it has signed selling
agreements such commissions or discounts from and not exceeding the
total sales charge as Distributor shall deem advisable, so long as any
such commissions or discounts are set forth in the Fund's current
Prospectus to the extent required by the applicable federal and state
securities laws. Distributor may also make payments to dealers from
Distributor's own resources, subject to the following conditions: (a)
any such payments shall not create any obligation for or recourse
against the Fund or any series or class, and (b) the terms and
conditions of any such payments are consistent with the Fund's
Prospectus and applicable federal and state securities laws and are
disclosed in the Prospectus or SAI to the extent such laws may
require.
(b) Distribution Plans. Distributor shall also be entitled to compensation
for its services as provided in any Distribution Plan adopted as to
any series and class of the Fund's Shares pursuant to Rule 12b-1 under
the 1940 Act.
10. Suspension of Sales. If and whenever the determination of the Fund's
net asset value is suspended and until such suspension is terminated, the
Distributor shall not accept orders for Shares except for unconditional orders
placed before the suspension. In addition, the Fund reserves the right to
suspend sales of Shares if, in the judgment of the Board of the Fund, it is in
the best interest of the Fund to do so, such suspension to continue for such
period as may be determined by the Board of the Fund; and in that event, (i) at
the direction of the Fund, Distributor shall suspend receipt and acceptance of
orders to purchase Shares of the Fund until otherwise instructed by the Fund and
(ii) the Distributor shall not accept orders to purchase Shares while such
suspension remains in effect unless otherwise directed by the Board.
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11. Orders and Payment for Shares.
(a) Distributor shall direct orders for the purchase of Shares of any
series to the Fund's transfer agent. At or prior to the time of
delivery of any Shares the Distributor will pay or cause to be paid to
the custodian of the Fund's assets, for the account of such series, an
amount in cash equal to the purchase price of such Shares. The Fund's
custodian and transfer agent shall be identified in its Prospectus.
(b) The Fund, or any agent of the Fund designated in writing by the Fund,
shall be promptly advised of all purchase orders for Fund Shares
received by the Distributor. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily or without
reasonable cause refuse to accept or confirm orders for the purchase
of Fund Shares from eligible investors.
12. Repurchase or Redemption of Shares by the Fund.
(a) Any of the outstanding Fund Shares may be tendered to the transfer
agent for redemption at any time, other than when the Fund suspends
redemptions as permitted by the Prospectus or applicable law, and the
Fund agrees to repurchase or redeem the Shares so tendered in
accordance with its obligations as set forth in its Agreement and
Declaration of Trust, as amended from time to time, and in accordance
with the applicable provisions set forth in the Prospectus and SAI.
The price to be paid to redeem or repurchase the Shares shall be equal
to the net asset value calculated in accordance with the provisions of
the Fund's Prospectus and SAI, less any contingent deferred sales
charge ("CDSC"), redemption fee or other charge(s), if any, set forth
in the Prospectus or SAI of the Fund. All payments by the Fund
hereunder shall be made in the manner set forth below.
(b) If Shares are tendered to the transfer agent for redemption or
repurchase by the Fund within seven business days after Distributor's
acceptance of the original purchase order for such Shares, Distributor
will immediately refund to the Fund the full sales commission (net of
allowances to dealers or brokers) allowed to Distributor on the
original sale, and will promptly, upon receipt thereof, pay to the
Fund any refunds from dealers or brokers of the balance of sales
commissions reallowed by Distributor. The transfer agent shall notify
Distributor of such tender for redemption within ten days of the day
on which notice of such tender for redemption is received by the
transfer agent.
(c) The transfer agent shall pay the total amount of the redemption price
as defined in the above paragraph 12(a), pursuant to the instructions
of the Distributor in Federal Funds on or before the seventh business
day subsequent to its having received the notice of redemption in
proper form except as otherwise provided in the Prospectus or SAI of
the Fund. The proceeds of any redemption of Shares shall be paid by
the transfer agent as follows: (i) any applicable CDSC shall be paid
to the Distributor,
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and (ii) the balance shall be paid to or for the account of the
shareholder, in each case in accordance with the applicable provision
of the Prospectus and SAI.
13. Purchases for your own Account. Distributor may purchase Shares for
its own investment account upon Distributor's written assurance that the
purchase is for investment purposes and that the Shares will not be resold
except through redemption by the Fund.
14. Columbia Management Advisors, Inc. Investment Programs. In connection
with any program under which Columbia Management Advisors, Inc. or one of its
affiliates offers investment advice to shareholders, the Distributor is
authorized to offer and sell Shares of the Fund, as principal, to participants
in such program. The terms of this Agreement shall apply to such sales,
including terms as to the offering price of Shares, the proceeds to be paid to
the Fund, the duties of the Distributor, the payment of expenses and
indemnification obligations of the Fund and the Distributor.
15. Authorized Representations. No Fund is 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 the
Fund's registration statement filed with the SEC under SA-33 and/or ICA- 40 as
it may be amended from time to time.
16. Registration of Additional Shares. The Fund hereby agrees to register
an indefinite number of Shares pursuant to Rule 24f-2 under ICA-40, as amended.
The Fund will, in cooperation with the Distributor, take such action as may be
necessary from time to time to qualify the Shares (so registered or otherwise
qualified for sale under SA-33), in any state mutually agreeable to the
Distributor and the Fund, and to maintain such qualification; provided, however,
that nothing herein shall be deemed to prevent the Fund from registering its
Shares without approval of the Distributor in any state it deems appropriate.
17. Conformity With Law. Distributor agrees that in soliciting orders to
purchase Shares it shall duly conform in all respects with applicable federal
and state laws and the rules and regulations of the NASD. Distributor will use
its best efforts to maintain its registrations in good standing during the term
of this Agreement and will promptly notify the Fund and Columbia Management
Advisors, Inc. in the event of the suspension or termination of any of the
registrations.
18. Independent Contractor. 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
Distributor's duties hereunder. Distributor shall be responsible for its own
conduct and the employment, control, and conduct of its agents and employees and
for injury to such agents or employees or to others through its agents and
employees and agrees to pay all employee taxes thereunder. Distributor may
appoint sub-agents or distribute through dealers or otherwise as Distributor may
determine from time to time, but this Agreement shall not be construed as
authorizing any dealer or other person to accept orders for sale or repurchase
on the Fund's behalf or otherwise act as the Fund's agent for any purpose.
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19. Indemnification. Distributor agrees to indemnify and hold harmless the
Fund and each of the members of its Board and its officers, employees and
representatives and each person, if any, who controls the Fund within the
meaning of Section 15 of SA- 33 against any and all losses, liabilities,
damages, claims and 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
of the members of its Board and of its officers, employees, representatives, or
controlling person or persons may become subject under SA-33, under any other
statute, at common law, or otherwise, arising out of or based upon (i) any
violation of an applicable law, rule or regulation or wrongful act by
Distributor or any of Distributor's directors, officers, employees or
representatives, or (ii) any untrue statement or alleged untrue statement of a
material fact contained in a registration statement, Prospectus, SAI,
shareholder report or other information covering Shares of the Fund 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 Distributor in writing. In no case (i) is 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 negligence in the performance of its or his duties or by reason of its or his
reckless disregard of its or his obligations and duties under this Agreement or
(ii) is 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 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 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).
However, failure to notify Distributor of any such claim shall not relieve
Distributor from any liability which Distributor may have to the Fund or any
person against whom such action is brought otherwise than on account of
Distributor's indemnity agreement contained in this Paragraph.
Distributor shall be entitled to participate, at its own expense, in the
defense, or, if Distributor so elects, to assume the defense of any suit brought
to enforce any such claim but, if Distributor elects to assume the defense, such
defense shall be conducted by legal counsel chosen by Distributor and
satisfactory to the persons indemnified who are defendants in the suit. In the
event that Distributor elects to assume the defense of any such suit and retain
such legal counsel, persons indemnified who are defendants in the suit shall
bear the fees and expenses of any additional legal counsel retained by them. If
Distributor does not elect to assume the defense of any such suit, Distributor
will reimburse persons indemnified who are defendants in such suit for the
reasonable fees of any legal counsel retained by them in such litigation.
The Fund agrees to indemnify and hold harmless Distributor and each of its
directors, officers, employees, and representatives and each person, if any, who
controls Distributor within the meaning of Section 15 of SA-33 against any and
all losses, liabilities, damages, claims or expenses (including the damage,
claim or expense and reasonable legal counsel fees incurred in
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connection therewith) to which Distributor or such of its directors, officers,
employees, representatives or controlling person or persons may become subject
under SA-33, under any other statute, at common law, or otherwise arising out of
or based upon (i) any violation of applicable law, rule or regulation or
wrongful act by the Fund or any of the members of the Fund's Board, or the
Fund's officers, employees or representatives other than Distributor, or (ii)
any untrue statement or alleged untrue statement of a material fact contained in
a registration statement, Prospectus, SAI, 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 unless such statement or omission was made in
reliance upon information furnished by Distributor to the Fund. In no case (i)
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 Distributor or such indemnified person would otherwise be
subject by reason of willful misfeasance, bad faith, or negligence in the
performance of its or his duties or by reason of its or his reckless disregard
of its or his obligations and duties under this Agreement, or (ii) is the Fund
to be liable under its indemnity agreement contained in this Paragraph with
respect to any claim made against Distributor or any person indemnified unless
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 information of the nature of the claim served upon
Distributor or upon such person (or after Distributor or such person shall have
received notice of such service on any designated agent). However, failure to
notify the Fund of any such claim shall not relieve the Fund from any liability
which the Fund may have to Distributor or any person against whom such action is
brought otherwise than on account of the Fund's indemnity agreement contained in
this Paragraph.
The Fund shall be entitled to participate, at its own expense, in the
defense or, if the Fund so elects, to assume the defense of any suit brought to
enforce 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
persons indemnified who are defendants in the suit. In the event that the Fund
elects to assume the defense of any such suit and retain such legal counsel, the
persons indemnified who are 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
persons indemnified who are defendants in such suit for the reasonable fees and
expenses of any legal counsel retained by them in such litigation.
20. Duration and Termination of this Agreement. With respect to the Fund
and the Distributor, this Agreement shall become effective upon its execution
("Effective Date") and unless terminated as provided herein, shall remain in
effect through June 30, 1998, and from year to year thereafter, but only so long
as such continuance is specifically approved at least annually (a) by a vote of
majority of the members of the Board of the Fund who are not interested persons
of the Distributor or of the Fund, voting in person at a meeting called for the
purpose of voting on such approval, and (b) by the vote of either the Board of
the Fund or a majority of the outstanding Shares of the Fund. This Agreement may
be terminated by and between an individual Fund and Distributor at any time,
without the payment of any penalty (a) on 60 days'
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written notice, by the Board of the Fund or by a vote of a majority of the
outstanding Shares of the Fund, or by Distributor, or (b) immediately, on
written notice by the Board of the Fund, in the event of termination or
suspension of any of the Registrations. This Agreement will automatically
terminate in the event of its assignment. In interpreting the provisions of this
Paragraph 20 the definitions contained in Section 2(a) of ICA-40 (particularly
the definitions of "interested person", "assignment", and "majority of the
outstanding Shares") shall be applied.
21. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by each party against which enforcement of the change, waiver,
discharge, or termination is sought. If the Fund should at any time deem it
necessary or advisable in the best interests of the Fund that any amendment of
this Agreement be made in order to comply with the recommendations or
requirements of the SEC or any other governmental authority or to obtain any
advantage under state or Federal tax laws and notifies Distributor of the form
of such amendment, and the reasons therefor, and if Distributor should decline
to assent to such amendment, the Fund may terminate this Agreement forthwith. If
Distributor should at any time request that a change be made in the Fund's
Agreement and Declaration of Trust or By-Laws or in its methods of doing
business, in order to comply with any requirements of Federal law or regulations
of the SEC, or of a national securities association of which Distributor is or
may be a member, relating to the sale of Shares, and the Fund should not make
such necessary changes within a reasonable time, Distributor may terminate this
Agreement forthwith.
22. Liability. It is understood and expressly stipulated that neither the
shareholders of the Fund nor the members of the Board of the Fund shall be
personally liable hereunder. The obligations of the Fund are not personally
binding upon, nor shall resort to the private property of, any of the members of
the Board of the Fund, nor of the shareholders, officers, employees or agents of
the Fund, but only the Fund's property shall be bound. A copy of the Declaration
of Trust and of each amendment thereto has been filed by the Trust with the
Secretary of State of The Commonwealth of Massachusetts and with the Clerk of
the City of Boston, as well as any other governmental office where such filing
may from time to time be required.
23. Miscellaneous. The captions in this Agreement are included for
convenience or reference only, and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously 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.
24. Notice. Any notice required or permitted to be given by a party to this
Agreement or to any other party hereunder shall be deemed sufficient if
delivered in person or sent by registered or certified mail, postage prepaid,
addressed by the party giving notice to each such other party at the address
provided below or to the last address furnished by each such other party to the
party giving notice.
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If to the Fund: Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Secretary
If to Distributor: Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Secretary
COLUMBIA FUNDS DISTRIBUTOR, INC.
By: /s/Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title: President
ATTEST: /s/Xxxxxxx X. Xxxx
COLUMBIA FLOATING RATE FUND
By: /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
ATTEST: /s/Xxxxxxx X. Xxxx
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