EXHIBIT 6
DISTRIBUTION AGREEMENT
DATED: December 10, 1997
BETWEEN: COLUMBIA SMALL CAP FUND, INC.
an Oregon corporation
0000 XX Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 the Fund
AND: PROVIDENT DISTRIBUTORS, INC., a Delaware corporation
Four Falls Corporate Center, 0xx Xxxxx
Xxxx Xxxxxxxxxxxx, XX 00000-000000 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) in accordance with the terms
of the prospectus for the respective 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 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 or cancel any sale if
payment for any purchase order is not received in accordance with
2
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 Fund shall make available to the Distributor at the
expense of the 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) 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
3
(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.
(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. The Fund
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 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
4
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 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
5
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 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.
6
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 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 SMALL CAP FUND, INC.
By J. XXXXX XXXXXXX, XX.
---------------------------------------
Name: J. Xxxxx Xxxxxxx, Xx.
Title: President
PROVIDENT DISTRIBUTORS, INC.
By XXXXXX XXXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxxx
Title: CEO
7
