Exhibit (5)(a)
THE GALAXY VIP FUND
ADVISORY AGREEMENT
Money Market Fund, Equity Fund,
Asset Allocation Fund and High Quality Bond Fund
AGREEMENT made as of September 30, 1992 between THE GALAXY VIP FUND, a
Massachusetts business trust, located in Worcester, Massachusetts ("Galaxy") and
FLEET INVESTMENT ADVISORS INC., located in Rochester, New York (the "Adviser").
WHEREAS, Galaxy is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Galaxy desires to retain the Adviser as investment adviser to
the Money Market Fund, Equity Fund, Asset Allocation Fund and High Quality Bond
Fund (individually, a "Fund," and collectively, the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Adviser acknowledges that it has
received copies of each of the following as certified by Galaxy:
(a) Galaxy's Agreement and Declaration of Trust, as filed with
the State Secretary of the Commonwealth of Massachusetts on May 27, 1992
and all amendments thereto (such Agreement and Declaration of Trust, as
presently in effect and as it shall from time to time be amended, is herein
called the "Declaration of Trust");
(b) Galaxy's Code of Regulations and any amendments thereto
(such Code of Regulations, as presently in effect and as it shall from time
to time be amended, is herein called the "Code of Regulations");
(c) Resolutions of Galaxy's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) Galaxy's Notification of Registration on Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC") on
July 7, 1992 and all amendments thereto;
(e) Galaxy's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") (Registr. No.
33-49290/811-6726) and under the 1940 Act as filed with the SEC on July 7,
1992 and all amendments thereto; and
(f) Galaxy's most recent prospectus with respect to the Funds
(such prospectus, as presently in effect and all amendments and supplements
thereto herein called the "Prospectus").
Galaxy will furnish the Adviser from time to time with execution
copies of all amendments of, or supplements to, the foregoing.
2. SERVICES. Galaxy hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the terms set forth in
this Agreement. Intending to be legally bound, the Adviser accepts such
appointment and agrees to furnish the services required herein to the Funds for
the compensation hereinafter provided.
Subject to the supervision of Galaxy's Board of Trustees, the Adviser
will provide with respect to the Funds a continuous investment program for each
Fund, including investment research and management with respect to all
securities and investments and cash equivalents in such Fund. The Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by each Fund and will arrange for the purchase and
sale of securities and other investments of each Fund. The Adviser will provide
the services under this Agreement in accordance with each Fund's investment
objective, policies and restrictions as stated in the Prospectus and resolutions
of Galaxy's Board of Trustees applicable to such Fund.
3. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to each Fund that it:
(a) will conform with all Rules and Regulations of the SEC
applicable to it as investment adviser and will in addition conduct its
activities under this agreement in accordance with those regulations of the
Board of Governors of the Federal Reserve System pertaining to the
investment advisory activities of bank holding companies which are
applicable to the Adviser;
(b) will use the same skill and care in providing such services
as it uses in providing services to other investment companies;
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(c) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any broker or dealer.
In placing orders with brokers and dealers, the Adviser will attempt to
obtain the best net price and the most favorable execution of its orders.
Consistent with this obligation, when the execution and price offered by
two or more brokers or dealers are comparable, the Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide Galaxy with research advice and other services. Except
as permitted by the SEC, the portfolio securities will not be purchased
from or sold to the Adviser, the Funds' distributor (the "Distributor"), or
any affiliated person of Galaxy, the Adviser or the Distributor, PROVIDED,
HOWEVER, that subject to the provisions of this paragraph and to the extent
permitted by law, the Adviser may purchase or sell portfolio securities
through the Distributor or an affiliate of the Distributor or the Adviser
acting as broker;
(d) will maintain all books and records with respect to the
securities transactions for the Funds, keep Galaxy's books of account with
respect to the Funds and furnish Galaxy's Board of Trustees such periodic
and special reports as the Board may request with respect to the Funds;
(e) will treat confidentially and as proprietary information of
Galaxy all records and other information relative to the Funds and prior,
present or potential shareholders, and will not 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 the Adviser 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. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and nothing in this Agreement shall
(i) prevent the Adviser or any affiliated person (as defined in the 0000 Xxx) of
the Adviser from acting as investment adviser or manager for any other person or
persons, including other management investment companies with investment
objectives and policies the same as or similar to those of any Fund or (ii)
limit or restrict the Adviser or any such affiliated person from buying, selling
or trading any securities or other investments (including any securities or
other investments which any Fund is eligible to buy) for its or their own
accounts or for the accounts of others for whom it or they may be acting;
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PROVIDED, HOWEVER, that the Adviser agrees that it will not undertake any
activities which, in its judgment, will adversely affect the performance of its
obligations to the Funds under this Agreement.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Funds are the property of Galaxy and further agrees to
surrender promptly to Galaxy any of such records upon Galaxy's request. The
Adviser 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.
6. EXPENSES. During the term of this Agreement, the Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Funds.
7. COMPENSATION. For the services provided and the expenses assumed
with respect to the Money Market Fund pursuant to this Agreement, Galaxy will
pay the Adviser from the assets belonging to the Fund and the Adviser will
accept as full compensation therefor fees, computed daily and paid monthly, at
an annual rate of .40% of the net assets of the Fund.
For the services provided and the expenses assumed with respect to the
Equity Fund and Asset Allocation Fund pursuant to this Agreement, Galaxy will
pay the Adviser from the assets belonging to the Fund involved and the Adviser
will accept as full compensation therefor fees, computed daily and paid monthly,
at an annual rate of .75% of the net assets of each Fund.
For the services provided and the expenses assumed with respect to the
High Quality Bond Fund pursuant to this Agreement, Galaxy will pay the Adviser
from the assets belonging to the Fund and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at an annual rate
of .55% of the net assets of the Fund.
If in any fiscal year the aggregate expenses of any Fund (as defined
under the securities regulations of any state having jurisdiction over such
Fund) exceed the expense limitations of any such state, the Adviser will
reimburse Galaxy for such excess expenses to the extent described in any written
undertaking provided by the Adviser to such state.
8. LIMITATION OF LIABILITY. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by Galaxy, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for
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services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or from
reckless disregard of its obligations and duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement shall become effective
with respect to each Fund on the day such Fund first commences the public
offering of its shares and, unless sooner terminated, shall continue in effect
until August 10, 1994. Thereafter, if not terminated, this Agreement shall
continue in effect with respect to a particular Fund for successive twelve month
periods ending on August 10, 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 parties to this Agreement, or interested persons
of any such party, 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 such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to any Fund at any time, without
the payment of any penalty, by Galaxy's Board of Trustees or by vote of a
majority of the outstanding voting securities of such Fund, or by the Adviser,
on 60 days' written notice (which notice may be waived by the party entitled to
receive the same). This Agreement will immediately terminate in the event of
its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning as such terms in the 1940 Act.)
10. 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 the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective with respect to a particular Fund until approved by the vote of a
majority of the outstanding voting securities of that Fund.
11. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect to a
particular Fund, the Adviser shall continue to be legally bound to provide the
services required herein for the other Funds for the period and on the terms set
forth in this Agreement.
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. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
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This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and shall be governed by New
York law.
12. NAMES. The names "The Galaxy VIP Fund" and "Trustees of The
Galaxy VIP Fund" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under an
Agreement and Declaration of Trust dated May 27, 1992 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 the principal office of Galaxy. The
obligations of "The Galaxy VIP 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 Galaxy personally, but bind only
the property of Galaxy, and all persons dealing with any class of shares of
Galaxy must look solely to the property of Galaxy belonging to such class for
the enforcement of any claims against Galaxy.
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 VIP FUND
By: /s/ Xxxx X. X'Xxxxx
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President
FLEET INVESTMENT ADVISORS INC.
By: /s/ Xxxxxx X. XxxXxxxxx, Xx.
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President
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