DISTRIBUTION AGREEMENT
DATED: August 16, 1993
BETWEEN: COLUMBIA HIGH YIELD 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 Commission (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 HIGH YIELD FUND, INC.
By
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Title:
COLUMBIA FINANCIAL CENTER
INCORPORATED
By
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Title:
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