Exhibit e
DISTRIBUTION AGREEMENT
DATED: December 21, 2001
BETWEEN: CMC Fund Trust,
an Oregon business trust, on behalf of the following
portfolios: CMC Small Cap Fund, CMC Small/Mid Cap
Fund, CMC Strategic Equity Fund, CMC International
Stock Fund, CMC Fixed Income Securities Fund, CMC
High Yield Fund, CMC International Bond Fund and CMC
Short Term Bond Fund
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 the Trust
AND: COLUMBIA FINANCIAL CENTER INCORPORATED
an Oregon corporation
X.X. Xxx 0000, Xxxxxxxx, Xxxxxx 00000 the Distributor
The Trust is an Oregon business trust. The Distributor is
engaged principally in the business of distributing shares of the portfolios of
the Trust sponsored and managed by Columbia 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 Trust desires the Distributor to act as a
distributor in the public offering of its shares.
The parties agree as follows:
1. Delivery of Trust Documents. The Trust 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 of 1940, as amended (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
Trust's prospectus, the Distributor is authorized to sell, as agent on behalf of
the Trust, shares of the Trust's capital stock (Shares) authorized for issuance
and registered under the Securities Act. Sales will be made by the Distributor
on behalf of the Trust 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 Trust. The Trust reserves the right to sell
Shares to investors pursuant to applications received and accepted by the Trust
or its transfer agent or any
other lawful method. The Trust also 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 Trust or the Trust'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 Trust,
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 Trust
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 Trust to
shareholders by virtue of their being shareholders of the Trust.
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 Trust, including redeemed or repurchased Shares if and to the
extent they may be legally sold and if, but only if, the Trust 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 Trust's bylaws or declaration
of trust, as now in effect or as later amended (and as reflected in the Trust'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
Trust reserves the right to suspend sales and the Distributor's authority to
accept orders for Shares on behalf of the Trust if, in the judgment of the Board
of Trustees of the Trust, it is in the best interests of the Trust to do so. The
suspension will continue for the period determined by the Board of Trustees of
the Trust. In that event, no orders to purchase Shares shall be processed or
accepted by the Distributor on behalf of the Trust 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 Trustees of the Trust.
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 Trust and registered under the Securities Act, provided that the Distributor
may in its discretion reject any order to purchase Shares or cancel any sale if
payment for any purchase order is not received in accordance with the terms of
the prospectus. 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 Trust shall make available to the Distributor at the
expense of the Distributor the number of copies
of the Trust's then effective prospectus as the Distributor reasonably requests.
The Trust 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 Trust 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 Trust to give on
behalf of the Trust 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 Trust 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 Trust.
9. Registration and Sale of Additional Shares. The Trust agrees to
register with the SEC an indefinite number of Shares pursuant to Rule 24f-2
under the Investment Company Act. The Trust 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 Trust and to maintain such
qualification.
10. Expenses.
(a) This Agreement shall not be considered to constitute an
exclusive arrangement. 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 Trust, would
cause the Trust 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.
(b) The Trust shall pay all other fees and expenses incurred
by the Trust 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. The Trust
agrees to notify Distributor of the issuance by the SEC of any stop order
suspending the effectiveness of any registration statements filed by it, or the
initiation of any proceedings for that purpose.
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 Trust 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
Trust and each of its trustees, officers, employees, and representatives and
each person, if any, who controls the Trust 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 Trust or such trustees,
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 Trust 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 Trust by the Distributor. In no case (x) is the
Distributor's indemnity in favor of the Trust or any person indemnified to be
deemed to protect the Trust or such indemnified person against any liability to
which the Trust 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 Trust or any person
indemnified unless the Trust 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 Trust or upon such person (or after
the Trust 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 Distributor from any liability the Distributor may have to
the Trust 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 Trust, 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 Trust,
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
Trust, 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 Trust 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 Trust 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 Trust or any of Trust's trustees,
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 Trust 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 Trust. In no case (x) is the Trust'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 Trust 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 Trust 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
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 Trust of any such claim, however, shall not relieve the Trust from any
liability which the Trust may have to the Distributor or any person against whom
such action is brought otherwise than on account of the Trust's indemnity
agreement contained in this paragraph.
(d) The Trust shall be entitled to participate, at its own
expense, in the defense, or, if the Trust elects, to assume the defense, of any
suit brought to enforce any such claim, but, if the Trust elects to assume the
defense, such defense shall be conducted by legal counsel chosen by the Trust
and satisfactory to the Distributor, to its trustees, officers, employees, or
representatives, or to any controlling person or persons, defendant or
defendants, in the suit. If the Trust elects to assume the defense of any such
suit and retain such legal counsel, the Distributor, its trustees, 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 Trust does not elect to assume the defense of
any such suit, the Trust will reimburse the Distributor, such trustees,
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 Trust agrees to notify promptly the
Distributor of the commencement of any litigation or proceedings against it or
any of its trustees, 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 trustees of the Trust who are not interested persons of the
Distributor or of the Trust, cast in person at a meeting called for the purpose
of voting on such approval, and by vote of the trustees of the Trust or of a
majority of the outstanding voting securities of the Trust. 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 trustees of the Trust who are not
interested persons of the Distributor or the Trust, by a vote of a majority of
the outstanding voting securities of the Trust, 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 Trust at any time deems it necessary or advisable in the best
interests of the Trust that any amendment of this Agreement be made to comply
with the recommendations or requirements of the SEC or other governmental
authority or to 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 Trust 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 Trust's bylaws or declaration of trust 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 Trust 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 Trust nor the trustees of the Trust 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.
CMC FUND TRUST
By: XXXX X. XXXXXX
---------------------
Name: Xxxx X. Xxxxxx
Title: President
COLUMBIA FINANCIAL CENTER INCORPORATED
By: XXXX X. XXXXXX
---------------------
Name: Xxxx X. Xxxxxx
Title: President
