AMENDMENT
TO
MUTUAL FUND CUSTODY AGREEMENT
This Amendment, dated as of September 7, 2000, is entered into
between The Chase Manhattan Bank (successor to The Chase Manhattan Bank, N.A.)
(the "Bank") and Galaxy Fund II (the "Customer").
WHEREAS, the Bank and the Customer entered into a Mutual Fund
Custody Agreement dated as of June 30, 1994 (the "Agreement"); and
WHEREAS, the Customer, The Galaxy Fund ("Galaxy"), The Galaxy VIP
Fund ("Galaxy VIP"), Fleet Investment Advisors Inc. ("Fleet") and Columbia
Management Co. ("Columbia") have received an exemptive order (the "Order") from
the Securities and Exchange Commission permitting each existing and future
portfolio of the Customer, Galaxy and Galaxy VIP for which Fleet and/or Columbia
acts as adviser or sub-adviser to deposit uninvested cash balances that remain
at the end of each trading day into one or more joint accounts established with
the Custodian and to invest the daily cash balances of the joint accounts in
certain short-term liquid assets; and
WHEREAS, the Bank and the Customer wish to amend the Agreement in
order to provide for the transactions permitted by the Order;
NOW THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Except as modified hereby, the Agreement is confirmed in
all respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
2. In addition to the accounts which the Custodian has agreed
to establish and maintain pursuant to Sections 5 and 6 of the Agreement, the
Custodian also agrees to establish and maintain one or more joint accounts (the
"Joint Accounts"). The Joint Accounts are intended to be used to hold (i)
uninvested cash balances that remain at the end of a trading day as may be
received from accounts ("Deposit Accounts") of the Customer's portfolios and/or
the portfolios of Galaxy and Galaxy II, and (ii) any short-term liquid assets
("Short-Term Investments") that may be purchased with the daily cash balances in
the Joint Accounts. Each Joint Account so established shall be titled "Fleet
Joint Trading Account" with an appropriate number designation.
3. (a) The Bank will transfer cash from the Deposit Account
of a portfolio of the Customer to one or more Joint Accounts upon receipt of
Instructions from the Customer or its designee, which Instructions shall include
all information required by the Bank.
(b) The Bank will make payments from a Joint Account
which holds any cash balances of a portfolio of the Customer upon receipt of
Instructions from the Customer
or its designee, which Instructions shall include all information required by
the Bank for the allocation of any Short-Term Investments purchased with such
cash balances among the participating portfolios of the Customer, Galaxy and/or
Galaxy VIP.
(c) In the event that any payment to be made under
paragraph (b) of this Section 3 exceeds the funds available in the Joint
Account, the Bank, in its discretion, may advance the participating portfolios
of the Customer, Galaxy and/or Galaxy VIP such excess amount which shall be
deemed a loan payable on demand, bearing interest at the rate customarily
charged by the Bank on similar loans.
(d) Short-Term Investments in a Joint Account will be
transferred, exchanged or delivered by the Bank upon receipt by the Bank of
Instructions, which Instructions shall include all information required by the
Bank. Settlement and payment for Short-Term Investments received for, and
delivery of Short-Term Investments out of, a Joint Account may be made in
accordance with the customary or established securities trading or securities
processing practices and procedures in the jurisdiction or market in which the
transaction occurs, including, without limitation, delivery of Short-Term
Investments to a purchaser, dealer or their agents against a receipt with the
expectation of receiving later payment and free delivery. Delivery of Short-Term
Investments out of a Joint Account may also be made in any manner specifically
required by Instructions acceptable to the Bank.
(e) The Bank, in its discretion, may credit or debit a
Joint Account on a contractual settlement date with cash or Short-Term
Investments with respect to any sale, exchange or purchase of Short-Term
Investments. Otherwise, such transactions will be credited or debited to the
Joint Account on the date cash or Short-Term Investments are actually received
by the Bank and reconciled to the Joint Account.
(i) The Bank may reverse credits or debits made
to a Joint Account in its discretion if the
related transaction fails to settle within a
reasonable period, determined by the Bank in
its discretion, after the contractual
settlement date for the related transaction.
(ii) If any Short-Term Investments delivered
pursuant to this Section 3 are returned by
the recipient thereof, the Bank may reverse
the credits and debits of the particular
transaction at any time.
(f) If the Bank credits a Joint Account on a payable
date, or at any time prior to the actual collection and reconciliation to the
Joint Account, with interest, dividends, redemptions or any other amount due,
the participating portfolios of the Customer will promptly return their share of
any such amount upon oral or written notification: (i) that such amount has not
been received in the ordinary course of business or (ii) that such amount was
incorrectly credited. If the participating portfolios of the Customer do not
promptly return their share of any amount upon such notification, the Bank shall
be entitled, upon oral or written notification to the Customer, to reverse such
credit by debiting the Joint Account for the amount previously credited. The
Bank shall have no duty or obligation to institute legal proceedings, file
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a claim or a proof of claim in any insolvency proceeding or take any other
action with respect to the collection of such amount, but may act for the
Customer upon Instructions after consultation with the Customer.
4. The Bank shall maintain records, based upon the
Instructions it receives from the Customer, documenting for any given day the
aggregate investment in a Joint Account by each of the Customer's participating
portfolios and each participating portfolio's pro rata share of each Short-Term
Investment made through such Joint Agreement. The Bank shall maintain such
records for at least six (6) years.
5. The Bank shall have no obligation or duty to monitor or
determine whether a Joint Account is being operated in compliance with the
Order.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment on the day and year first above written.
THE CHASE MANHATTAN BANK
By:
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Name:
Title:
GALAXY FUND II
By:
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President
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