UNDERWRITING AGREEMENT
BETWEEN
COLUMBIA INSTITUTIONAL FLOATING RATE INCOME FUND
AND COLUMBIA FUNDS DISTRIBUTOR, INC.
THIS UNDERWRITING AGREEMENT ("Agreement"), made as of the 1st day of
November, 2001 by and between Columbia Institutional Floating Rate Income 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 as an interval fund under Section 23c-3 of 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");
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 the 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
Columbia Floating Rate Limited Liability Company, a master fund in which the
Fund invests substantially all of its assets under a master fund/feeder fund
structure, or its affiliates, may pay expenses incurred in the sale and
promotion of the Fund;
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 Section 2(a)(29) of ICA-40) of its
Shares.
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. Solicitation of Orders for Purchase of Shares.
(a) Subject to the provisions of Paragraphs 4, 5 and 7 hereof,
and to such minimum purchase requirements as may from time to time be
indicated in the Fund's Prospectus, Distributor is authorized to
solicit, as agent on behalf of the Fund, unconditional orders for
purchases of the Fund's Shares authorized for issuance and registered
under SA-33, provided that:
(1) Distributor shall act solely as a disclosed agent
on behalf of and for the account of the Fund;
(2) In all cases except for orders transmitted
through the FundSERV/NSCC system, the Fund or its transfer
agent shall receive directly from investors all payments for
the purchase of the Fund's Shares and also shall pay directly
to shareholders amounts due to them for the redemption or
repurchase of all the Fund's Shares with Distributor having no
rights or duties to accept such payment or to effect such
redemptions or repurchases;
(3) The Distributor shall receive directly from
financial intermediaries which trade through the FundSERV/NSCC
system all payments for the purchase of the Fund's Shares and
shall also cause to be paid directly to such intermediaries
amounts due to them for the redemption or repurchase of all
the Fund's Shares. The Distributor shall be acting as the
Fund's agent in accepting payment for the orders and not be
acting in a principal capacity.
(4) Distributor shall confirm all orders received for
purchase of the Fund's Shares which confirmation shall clearly
state (i) that Distributor is acting as agent of the Fund in
the transaction (ii) that all certificates for redemption,
remittances, and registration instructions should be sent
directly to the Fund, and (iii) the Fund's mailing address;
(5) Distributor shall have no liability for payment
for purchases of the Fund's Shares it sells as agent; and
(6) Each order to purchase Shares of the Fund
received by Distributor shall be subject to acceptance by an
officer of the Fund in Chicago and entry of the order on the
Fund's records or shareholder accounts and is not binding
until so accepted and entered.
The purchase price to the public of the Fund's Shares shall be the
public offering price as defined in Paragraph 6 hereof.
(b) In consideration of the rights granted to the Distributor
under this Agreement, Distributor will use its best efforts (but only
in states in which Distributor may lawfully do so) to solicit from
investors unconditional orders to purchase Shares of the Fund. The Fund
shall make available to the Distributor without cost to the Distributor
such number of copies of the Fund's currently effective Prospectus and
Statement of Additional Information and copies of all information,
financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of
Shares.
3.A. Selling Agreements. Distributor is authorized, as agent on behalf
of each Fund, to enter into agreements with other broker-dealers providing for
the solicitation of unconditional orders for purchases of Fund's Shares
authorized for issuance and registered under SA-33. 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"). All solicitations
made by other broker-dealers pursuant to a Selling Agreement shall be subject to
the same terms of this Agreement which apply to solicitations made by
Distributor.
4. 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.
5. 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.
6. Public Offering Price. All solicitations by the Distributor pursuant
to this Agreement shall be for orders to purchase Shares of the Fund at the
public offering price. The public offering price for each accepted subscription
for the Fund's Shares will be the net asset value per share next determined by
the Fund after it accepts such subscription. 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 Statement of Additional Information.
7. Suspension of Sales. If and whenever the determination of the Fund's
net asset value is suspended and until such suspension is terminated, no further
orders for Shares shall be accepted by the Fund except such unconditional orders
placed with the Fund and accepted by it before the suspension. In addition, the
Fund reserves the right to suspend sales of Shares if, in the judgement 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 its solicitation of orders to purchase Shares of the Fund until
otherwise instructed by the Fund and (ii) no orders to purchase Shares shall be
accepted by the Fund while such suspension remains in effect unless otherwise
directed by its Board.
8. 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.
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 the Fund's
registration statement filed with the SEC under SA-33 and/or ICA-40, covering
Shares, as such registration statement or the Fund's prospectus may be 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 or approved by the
Fund for the Distributor's use. No person other than Distributor is authorized
to act as principal underwriter (as such term is defined in ICA-40, as amended)
for the Funds.
9. Registration of Additional Shares. The Fund hereby agrees to
register a definite number of Shares as the Fund shall deem advisable pursuant
to Rule 24e-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.
10. 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.
11. 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.
12. 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 the acquisition of any
Shares of the Fund by any person which (i) may be based upon any wrongful act by
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, Statement of Additional Information, 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 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 the
acquisition of any Shares by any person which (i) may be based upon any 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) may be
based upon any untrue statement or alleged untrue statement of a material fact
contained in a registration statement, Prospectus, Statement of Additional
Information, 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 a 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.
13. 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, 1999, 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'
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 13, 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.
14. 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.
15. 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.
16. 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.
17. 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.
If to the Fund: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
If to Distributor: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
If to Columbia Manager Advisors, Inc.: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
COLUMBIA FUNDS DISTRIBUTOR, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name:▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Co-President
ATTEST:
By: _________________________
Name:
Title:
COLUMBIA INSTITUTIONAL FLOATING
RATE INCOME FUND
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:President
ATTEST:
By: _________________________
Name:
Title:
