DISTRIBUTION AGREEMENT
NATIONS SEPARATE ACCOUNT TRUST
THIS AGREEMENT is made as of August 22, 2005, by and between Nations
Separate Account Trust, a Delaware statutory trust, (the "Trust") on behalf of
each Portfolio of the Trust now or hereafter identified on Schedule I (each, a
"Portfolio" and collectively, the "Portfolios"), and Columbia Management
Distributors, Inc. (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 "Portfolio" 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 Portfolios, 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 Portfolios. The Trust further understands
that existing and future investors in the Portfolios 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 reviewing and
providing advice on all sales literature (e.g., advertisements, brochures and
shareholder communications) with respect to each of the Portfolios, 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. In addition, the Distributor will provide sufficient
personnel, during normal business hours, reasonably necessary to respond to
telephone questions with respect to the Portfolios.
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.
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
Portfolios and Shares as the Distributor may reasonably request and the Trust
warrants that such information shall be true and correct. Without limiting 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
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respect to each Portfolio, and (b) from time to time such additional information
regarding the Portfolios' 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. 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, 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 based on
such additional forms of agreement as it deems appropriate, provided that the
Distributor determines that the Trust's and the Portfolios' 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 do not exceed their
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 Portfolio.
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
Portfolios 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
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
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statements therein not misleading to a purchaser of Shares. 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 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, is officers and
directors, or any such controlling person would otherwise be subject by reason
of willful misfeasance, bad faith or gross negligence in the performance of the
Distributor's, its officer's or director's, or any such controlling person's
duties, or by reason of the Distributor's, its officer's or director's, 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 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
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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 shall arise out
of or be based upon 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
answers or necessary to make such information not misleading, or (b) 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. 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
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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
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 Portfolio in connection with matters to which this Agreement
relates, except a loss resulting from willful
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misfeasance, bad faith or gross 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 Portfolio, 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 Portfolio,
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 Portfolio, 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.
7. LIMITED RECOURSE
The names "Nations Separate Account Trust" and "Trustees of "Nations
Separate Account Trust" refer respectively to the Trust created by the
Declaration of Trust and the Trustees as Trustees but not individually or
personally. 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 Portfolio of the Trust must look solely to the property
belonging to such Portfolio 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 State of
Delaware 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 State of Delaware, or any
of the provisions herein, conflict with the applicable provisions of the 1940
Act, the latter shall control.
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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, Attention:
Secretary, and that of the Distributor shall be Xxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attention: 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.
NATONS SEPARATE ACCOUNT TRUST
on behalf of the Portfolios
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxxxxxx X. Xxxxxx
President
COLUMBIA MANAGEMENT DISTRIBUTORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
President, Intermediary Distribution
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SCHEDULE I
NATIONS SEPARATE ACCOUNT TRUST
Nations Asset Allocation Portfolio
Nations High Yield Bond Portfolio
Nations Xxxxxxx Focused Equities Portfolio
Nations Xxxxxxx Growth Portfolio
Nations Xxxxxxx International Opportunities Portfolio
Nations Xxxxxxx 21st Century Portfolio
Nations MidCap Growth Portfolio
Nations Small Company Portfolio
Nations Value Portfolio
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SCHEDULE II
PORTFOLIO
------------------------------------------------------
Nations Asset Allocation Portfolio 0.25%
Nations High Yield Bond Portfolio 0.25%
Nations Xxxxxxx Focused Equities Portfolio 0.25%
Nations Xxxxxxx Growth Portfolio 0.25%
Nations Xxxxxxx International Opportunities Portfolio 0.25%
Nations Xxxxxxx 21st Century Portfolio 0.25%
Nations Xxxxxxx XxxXxx Growth Portfolio 0.25%
Nations Small Company Portfolio 0.25%
Nations Value Portfolio 0.25%
Approved: May 4, 2005
Last Amended: December 9, 2005
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