ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 31st day of March, 1995 between THE GALAXY
FUND, a Massachusetts business trust ("Galaxy"), and The Shareholder Services
Group, Inc., d/b/a 440 Financial, a Massachusetts corporation ("440
Financial").
W I T N E S S E T H
WHEREAS, Galaxy is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940 (the "1940 Act");
and
WHEREAS, Galaxy desires to employ the capital held in the following of its
investment portfolios, Money Market Fund, Government Fund, Equity Value Fund,
Intermediate Bond Fund, Tax-Exempt Fund, U.S. Treasury Fund, Equity Growth
Fund, Equity Income Fund, International Equity Fund, High Quality Bond Fund,
Short-Term Bond Fund, Tax-Exempt Bond Fund, Asset Allocation Fund, Small
Company Equity Fund, New York Municipal Bond Fund, Connecticut Municipal Bond
Fund, Massachusetts Municipal Bond Fund, Rhode Island Municipal Bond Fund,
Institutional Treasury Money Market Fund and Corporate Bond Fund (individually
a "Fund" and collectively the "Funds"), by investing and reinvesting the same
in investments of the type and in accordance with the limitations specified in
its Declaration of Trust and in its Prospectus with respect to each Fund as
from time to time in effect; and
WHEREAS, Galaxy has submitted or will submit to 440 Financial copies of
Galaxy's Declaration of Trust and the prospectus for each Fund and resolutions
of Galaxy's Board of Trustees with respect to each Fund; and
WHEREAS, 440 Financial Group of Worcester, Inc. ("440 Group") currently
serves as administrator for the Funds pursuant to an Administration Agreement
dated as of February 28, 1994, as amended; and
WHEREAS, all of the assets of 440 Group, including but not limited to all
rights in and to the name "440 Financial," are this day being acquired by 440
Financial (the "Acquisition"); and
WHEREAS, Galaxy desires to appoint 440 Financial as administrator of each
Fund following the Acquisition and 440 Financial is prepared to provide such
administrative services;
NOW THEREFORE, in consideration of the premises and mutual covenants set
forth herein and intending to be legally bound hereby the parties hereto agree
as follows:
1. Services as Administrator
440 Financial hereby accepts its appointment as administrator for the Funds,
and agrees to provide services hereunder subject to the direction and control
of Galaxy's Board of Trustees.
With respect to each Fund, 440 Financial agrees to: compute the net asset
value of Galaxy's Funds and the net income available for dividends in
accordance with Galaxy's current Prospectuses, the Statement of Additional
Information and the resolutions of the Board of Trustees; furnish statistical
and research data, clerical, accounting and bookkeeping services, and
stationery and office supplies; provide internal auditing and legal services
and internal executive and administrative services; prepare those portions of
Galaxy's semi-annual reports to the Securities and Exchange Commission on Form
N-SAR that pertain to each Fund, and coordinate and file such reports; compile
data for and prepare for execution by Galaxy those portions of Galaxy's Federal
and state tax returns and required tax filings that pertain to each Fund and
file such returns and filings when completed (other than those filings required
to be made by Galaxy's custodian and transfer agent); prepare compliance
filings pursuant to state securities laws with the advice of Galaxy's counsel;
prepare those portions of Galaxy's Annual and Semi-Annual Reports to
shareholders that pertain to each Fund, and coordinate and file such reports;
compile data for, prepare, and file timely notices to the Securities and
Exchange Commission required with respect to the registration of each Fund's
shares pursuant to Rule 24f-2 under the 1940 Act;
arrange for and bear the cost of processing purchase and redemption orders with
respect to each Fund's shares; keep and maintain the Funds' financial accounts
and records; monitor Galaxy's arrangements with respect to services provided by
certain institutional shareholders (herein called "Service Organizations") to
their customers, who are the beneficial owners of any class of Galaxy's shares
of beneficial interest (including any series or sub-class thereof), pursuant to
agreements between Galaxy and such Service Organizations (herein called
"Servicing Agreements"), including, among other things, reviewing the
qualifications of Service Organizations wishing to enter into Servicing
Agreements with Galaxy, assisting in the execution and delivery of the
Servicing Agreements, reporting to the Board of Trustees with respect to the
amounts paid or payable by Galaxy from time to time under the Servicing
Agreements and the nature of the services provided by Service Organizations and
maintaining appropriate records in connection with the foregoing duties; and
generally assist in all aspects of the Funds' operations.
440 Financial also agrees to maintain office facilities for Galaxy (which may
be at the offices of 440 Financial or a corporate affiliate and which shall be
in such location as Galaxy
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may reasonably determine) and to supervise all administrative aspects of the
Funds' operations except those performed by the Funds' investment adviser under
its Advisory Agreement.
In compliance with the requirements of Rule 31a-3 under the 1940 Act, 440
Financial hereby agrees that all records which it maintains for Galaxy are the
property of Galaxy, and further agrees to surrender promptly to Galaxy any of
such records upon Galaxy's request. 440 Financial further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
In computing the net asset value of each Fund, 440 Financial may utilize one
or more independent pricing services approved from time to time by the Board of
Trustees of Galaxy to obtain securities prices. Each Fund will pay its share
of the cost of such services based upon its actual use of the services.
2. Fees; Expenses; Expense Reimbursement
In consideration of services provided and expenses assumed with respect to
the Funds, Galaxy will pay 440 Financial a monthly fee as agreed to by Galaxy
and 440 Financial from time to time.
440 Financial will from time to time employ or associate with itself such
person or persons as 440 Financial may believe to be particularly fitted to
assist it in the performance of this Agreement. Such person or persons may be
officers and employees who are employed by both 440 Financial and Galaxy. The
compensation of such person or persons shall be paid by 440 Financial and no
obligation will be incurred on behalf of Galaxy in such respect.
440 Financial will bear all expenses in connection with the performance of
its services under this Agreement. Other expenses to be incurred in the
operation of the Funds including taxes, interest, brokerage fees and
commissions, if any, fees of trustees who are not officers, directors,
stockholders or employees of 440 Financial, or of the Funds' investment adviser
or distributor, Securities and Exchange Commission fees and state Blue Sky
qualification fees, advisory and administration fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
outside auditing and legal expenses, costs of maintenance of corporate
existence, typesetting and printing of prospectuses for regulatory purposes and
for distribution to current shareholders of the Funds, costs of shareholders'
reports and corporate meetings and any extraordinary expenses will be borne by
the Funds, provided, however, that the Funds will not bear, directly or
indirectly,
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the cost of any activity which is primarily intended to result in the
distribution of Fund shares.
If in any fiscal year the aggregate expenses of a Fund (as defined under the
securities regulations of any state having jurisdiction over such Fund) exceed
the expense limitations of any such state, 440 Financial will reimburse such
Fund for .20% of such excess expense. The expense reimbursement obligation of
440 Financial is limited to the amount of its fees hereunder for such fiscal
year, provided, however, that notwithstanding the foregoing, 440 Financial
shall reimburse a Fund for such excess expense regardless of the amount of fees
paid to it during such fiscal year to the extent that the securities
regulations of any state having jurisdiction over the Fund so requires. Such
expense reimbursement, if any, will be estimated, reconciled, and paid on a
monthly basis.
3. Proprietary and Confidential Information
440 Financial agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of Galaxy all records and other
information relative to Galaxy and prior, present or potential shareholders,
and not to use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by Galaxy, which approval shall not be
unreasonably withheld and may not be withheld and will be deemed granted where
440 Financial may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by Galaxy.
4. Limitation of Liability
440 Financial shall not be liable for any error of judgment or mistake of law
or for any loss suffered by Galaxy in connection with the matters to which this
Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or negligence on the part of 440 Financial in the performance of its
duties or from reckless disregard by it of its obligations and duties under
this Agreement. Any person, even though also an officer, partner, employee, or
agent of 440 Financial, who may be or become an officer, trustee, employee or
agent of Galaxy, shall be deemed, when rendering services to Galaxy or acting
on any business of Galaxy (other than services or business in connection with
440 Financial's duties as administrator hereunder), to be rendering such
services to or acting solely for Galaxy and not as an officer, partner,
employee, or agent or one under the control or direction of 440 Financial even
though paid by it.
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5. Term
This Agreement shall become effective on the date of the consummation of the
Acquisition and, unless sooner terminated as provided herein, shall continue
until February 28, 1996 and thereafter shall continue automatically for
successive annual periods ending on February 28 of each year, provided, such
continuance is specifically approved at least annually (a) by the vote of a
majority of those members of Galaxy's Board of Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called for
the purpose of voting on such approval, and (b) by Galaxy's Board of Trustees
or by the vote of a majority of the outstanding voting securities of the
affected Fund. Notwithstanding the foregoing, this Agreement may be terminated
as to any Fund at any time without the payment of any penalty, by Galaxy by the
vote of Galaxy's Board of Trustees, or by the vote of a majority of the
outstanding voting securities of the Fund, or by 440 Financial, on sixty days'
written notice. (As used in this Agreement, the terms "majority of the
outstanding voting securities" and "interested person" shall have the same
meaning as such terms in the 1940 Act.) This Agreement shall be governed by
the laws of the Commonwealth of Massachusetts.
6. Names.
The names "The Galaxy Fund" and "Trustees of The Galaxy Fund" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated March 31, 1986 which is hereby referred to and a copy of which is
on file at the office of the State Secretary of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"The Galaxy Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely to
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
7. Counterparts.
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.
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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.
THE GALAXY FUND
By:/s/ WalterM. Xxxxxxxxx
Attest:/s/ W. Xxxxx XxXxxxxx, III Vice President
Secretary
THE SHAREHOLDER SERVICES
GROUP, INC., d/b/a
440 FINANCIAL
By:___________________________
Attest:_______________________
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