EX-99(K)(3)
ADMINISTRATIVE AGREEMENT
BETWEEN
COLUMBIA FLOATING RATE FUND
AND
COLUMBIA MANAGEMENT ADVISORS, INC.
COLUMBIA FLOATING RATE FUND, a Massachusetts business trust registered
under the Securities Act of 1933 ("1933 Act") and the Investment Company Act of
1940 ("1940 Act") (the "Fund"), hereby appoints COLUMBIA MANAGEMENT ADVISORS,
INC., an Oregon corporation ("Administrator"), to furnish certain administrative
services with respect to the Fund.
The Fund and Administrator hereby agree that:
1. Administrative Services. Subject to the terms of this
Agreement and the supervision and control of the Fund's Board of Trustees
("Trustees"), Administrator shall provide the following services with respect to
the Fund:
(a) Preparation and maintenance of the Fund's registration
statement with the Securities and Exchange Commission ("SEC");
(b) Preparation and periodic updating of the prospectus and
statement of additional information for the Fund
("Prospectus");
(c) Preparation, filing with appropriate regulatory authorities,
and dissemination of various reports for the Fund, including
but not limited to semiannual reports to shareholders under
Section 30(d) of the 1940 Act, annual and semiannual reports
on Form N-SAR, and notices pursuant to Rule 24f-2;
(d) Arrangement for all meetings of shareholders, including the
collection of all information required for preparation of
proxy statements, the preparation and filing with appropriate
regulatory agencies of such proxy statements, the supervision
of solicitation of shareholders and shareholder nominees in
connection therewith, tabulation (or supervision of the
tabulation) of votes, response to all inquiries regarding such
meetings from shareholders, the public and the media, and
preparation and retention of all minutes and all other records
required to be kept in connection with such meetings;
(e) Maintenance and retention of all Fund charter documents and
the filing of all documents required to maintain the Fund's
status as a Massachusetts business trust and as a registered
open-end investment company;
(f) Arrangement and preparation and dissemination of all materials
for meetings of the Board of Trustees and committees thereof
and preparation and retention of all minutes and other records
thereof;
(g) Preparation and filing of the Fund's federal, state, and local
income tax returns and calculation of any tax required to be
paid in connection therewith;
(h) Calculation of all Fund expenses and arrangement for the
payment thereof;
(i) Calculation of and arrangement for payment of all income,
capital gain, and other distributions to shareholders of the
Fund;
(j) Determination, after consultation with the officers of the
Fund, of the jurisdictions in which shares of beneficial
interest of the Fund ("Shares") shall be registered or
qualified for sale, or may be sold pursuant to an exemption
from such registration or qualification, and preparation and
maintenance of the registration or qualification of the Shares
for sale under the securities laws of each such jurisdiction;
(k) Provision of the services of persons who may be appointed as
officers of the Fund by the Board of Trustees (it is agreed
that some person or persons may be officers of both the Fund
and the Administrator, and that the existence of any such dual
interest shall not affect the validity of this Agreement
except as otherwise provided by specific provision of
applicable law);
(l) Preparation and, subject to approval of the Fund's Chief
Financial Officer, dissemination of the Fund's quarterly
financial information to the Board of Trustees and preparation
of such other reports relating to the business and affairs of
the Fund as the officers and Board of Trustees may from time
to time reasonably request;
(m) Administration of the Fund's Code of Ethics and periodic
reporting to the Board of Trustees of Trustee and officer
compliance therewith;
(n) Provision of internal legal, accounting, compliance, audit,
and risk management services and periodic reporting to the
Board of Trustees with respect to such services;
(o) Negotiation, administration, and oversight of third party
services to the Fund including, but not limited to, custody,
tax, transfer agency, disaster recovery, audit, and legal
services;
(p) Negotiation and arrangement for insurance desired or required
of the Fund and administering all claims thereunder;
(q) Response to all inquiries by regulatory agencies, the press,
and the general public concerning the business and affairs of
the Fund, including the oversight of all periodic inspections
of the operations of the Fund and its agents by regulatory
authorities and responses to subpoenas and tax levies;
(r) Handling and resolution of any complaints registered with the
Fund by shareholders, regulatory authorities, and the general
public;
(s) Monitoring legal, tax, regulatory, and industry developments
related to the business affairs of the Fund and communicating
such developments to the officers
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and Board of Trustees as they may reasonably request or as the
Administrator believes appropriate;
(t) Administration of operating policies of the Fund and
recommendation to the officers and the Board of Trustees of
the Fund of modifications to such policies to facilitate the
protection of shareholders or market competitiveness of the
Fund and to the extent necessary to comply with new legal or
regulatory requirements;
(u) Responding to surveys conducted by third parties and reporting
of Fund performance and other portfolio information; and
(v) Filing of claims, class actions involving portfolio
securities, and handling administrative matters in connection
with the litigation or settlement of such claims.
2. Use of Affiliated Companies and Subcontractors. In connection
with the services to be provided by Administrator under this Agreement,
Administrator may, to the extent it deems appropriate, and subject to compliance
with the requirements of applicable laws and regulations and upon receipt of
approval of the Trustees, make use of (i) its affiliated companies and their
directors, trustees, officers, and employees and (ii) subcontractors selected by
Administrator, provided that Administrator shall supervise and remain fully
responsible for the services of all such third parties in accordance with and to
the extent provided by this Agreement. All costs and expenses associated with
services provided by any such third parties shall be borne by Administrator or
such parties.
3. Instructions, Opinions of Counsel, and Signatures. At any time
Administrator may apply to a duly authorized agent of the Fund for instructions
regarding the Fund, and may consult counsel for the Fund or its own counsel, in
respect of any matter arising in connection with this Agreement, and it shall
not be liable for any action taken or omitted by it in good faith in accordance
with such instructions or with the advice or opinion of such counsel.
Administrator shall be protected in acting upon any such instruction, advice, or
opinion and upon any other paper or document delivered by the Fund or such
counsel believed by Administrator to be genuine and to have been signed by the
proper person or persons and shall not be held to have notice of any change of
authority of any officer or agent of the Fund, until receipt of written notice
thereof from the Fund.
4. Expenses Borne by Fund. Except to the extent expressly assumed
by Administrator herein or under a separate agreement between the Fund and
Administrator and except to the extent required by law to be paid by
Administrator, the Fund shall pay all costs and expenses incidental to its
organization, operations and business. Without limitation, such costs and
expenses shall include but not be limited to:
(a) All charges of depositories, custodians and other agencies for
the safekeeping and servicing of its cash, securities, and
other property;
(b) All charges for equipment or services used for obtaining price
quotations or for communication between Administrator or the
Fund and the custodian, transfer agent or any other agent
selected by the Fund;
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(c) All charges for investment advisory, portfolio management, and
accounting services provided to the Fund by the Administrator,
or any other provider of such services;
(d) All charges for services of the Fund's independent auditors
and for services to the Fund by legal counsel;
(e) All compensation of Trustees, other than those affiliated with
Administrator, all expenses incurred in connection with their
services to the Fund, and all expenses of meetings of the
Trustees or committees thereof;
(f) All expenses incidental to holding meetings of shareholders,
including printing and of supplying each record-date
shareholder with notice and proxy solicitation material, and
all other proxy solicitation expenses;
(g) All expenses of printing of annual or more frequent revisions
of the Fund's prospectus(es) and of supplying each then-
existing shareholder with a copy of a revised prospectus;
(h) All expenses related to preparing and transmitting
certificates representing the Fund's shares;
(i) All expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) All brokers' commissions and other normal charges incident to
the purchase, sale, or lending of Fund securities;
(k) All taxes and governmental fees payable to federal, state or
other governmental agencies, domestic or foreign, including
all stamp or other transfer taxes;
(l) All expenses of registering and maintaining the registration
of the Fund under the 1940 Act and, to the extent no exemption
is available, expenses of registering the Fund's shares under
the 1933 Act, of qualifying and maintaining qualification of
the Fund's shares for sale under securities laws of various
states or other jurisdictions and of registration and
qualification of the Fund under all other laws applicable to
the Fund or its business activities;
(m) All interest on indebtedness, if any, incurred by the Fund;
and
(n) All fees, dues and other expenses incurred by the Fund in
connection with membership of the Fund in any trade
association or other investment company organization.
5. Allocation of Expenses Borne by the Fund. Any expenses borne
by the Fund that are attributable solely to the organization, operation or
business of the Fund shall be paid solely out of Fund assets.
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6. Expenses Borne by Administrator. Administrator at its own
expense shall furnish all executive and other personnel, office space, and
office facilities required to render the services set forth in this Agreement.
However, Administrator shall not be required to pay or provide any credit for
services provided by the Fund's custodian or other agents without additional
cost to the Fund.
In the event that Administrator pays or assumes any expenses of the
Fund not required to be paid or assumed by Administrator under this Agreement,
Administrator shall not be obligated hereby to pay or assume the same or similar
expense in the future; provided that nothing contained herein shall be deemed to
relieve Administrator of any obligation to the Fund under any separate agreement
or arrangement between the parties.
7. Administration Fee. For the services rendered, facilities
provided, and charges assumed and paid by Administrator hereunder, the Fund
shall pay to Administrator out of the assets of the Fund fees at the annual rate
of 0.20%. The administrative fee shall accrue on each calendar day, and shall be
payable monthly on the first business day of the next succeeding calendar month.
The daily fee accrual shall be computed by multiplying the fraction of one
divided by the number of days in the calendar year by the applicable annual rate
of fee, and multiplying this product by the net assets of the Fund, determined
in the manner established by the Board of Trustees, as of the close of business
on the last preceding business day on which the Fund's net asset value was
determined.
8. State Expense Limitation. If for any fiscal year, the Fund's
aggregate operating expenses ("Aggregate Operating Expenses") exceed the
applicable percentage expense limit imposed under the securities law and
regulations of any state in which Shares of the Fund are qualified for sale (the
"State Expense Limit"), the Administrator shall pay the Fund the amount of such
excess. For purposes of this State Expense Limit, Aggregate Operating Expenses
shall (a) include (i) any fees or expense reimbursements payable to
Administrator pursuant to this Agreement, and (ii) to the extent the Fund
invests all or a portion of its assets in another investment company registered
under the 1940 Act, the pro rata portion of that company's operating expenses
allocated to the Fund, and (iii) any compensation payable to Administrator
pursuant to any separate agreement relating to the Fund's investment operations
and portfolio management and (iv) other expenses incurred in the ordinary course
of business, but (b) exclude any interest, taxes, brokerage commissions, and
other normal charges incident to the purchase, sale or loan of securities,
commodity interests or other investments held by the Fund, litigation and
indemnification expense, and other extraordinary expenses not incurred in the
ordinary course of business. Except as otherwise agreed to by the parties or
unless otherwise required by the law or regulation of any state, any
reimbursement by Administrator to the Fund under this section shall not exceed
the administrative fee payable to Administrator by the Fund under this
Agreement.
Any payment to the Fund by Administrator hereunder shall be made
monthly, by annualizing the Aggregate Operating Expenses for each month as of
the last day of the month. An adjustment for payments made during any fiscal
year of the Fund shall be made on or before the last day of the first month
following such fiscal year of the Fund if the Annual Operating Expenses for such
fiscal year (i) do not exceed the State Expense Limitation or (ii) for such
fiscal year there is no applicable State Expense Limit.
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9. Non-Exclusivity. The services of Administrator to the Fund
hereunder are not to be deemed exclusive and Administrator shall be free to
render similar services to others.
10. Standard of Care. Neither Administrator, nor any of its
directors, officers or stockholders, agents or employees shall be liable to the
Fund or its shareholders for any action taken or thing done by it or its
subcontractors or agents on behalf of the Fund in carrying out the terms and
provisions of this Agreement if done in good faith and without negligence or
misconduct on the part of Administrator, its subcontractors, or agents.
11. Indemnification. The Fund shall indemnify and hold
Administrator and its controlling persons, if any, harmless from any and all
claims, actions, suits, losses, costs, damages, and expenses, including
reasonable expenses for counsel, incurred by it in connection with its
acceptance of this Agreement, in connection with any action or omission by it or
its agents or subcontractors in the performance of its duties hereunder to the
Fund, or as a result of acting upon any instruction believed by it to have been
executed by a duly authorized agent of the Fund or as a result of acting upon
information provided by the Fund in form and under policies agreed to by
Administrator and the Fund, provided that: (i) this indemnification shall not
apply to actions or omissions constituting negligence or misconduct of
Administrator or its agents or subcontractors, including but not limited to
willful misfeasance, bad faith, or gross negligence in the performance of their
duties, or reckless disregard of their obligations and duties under this
Agreement; and (ii) Administrator shall give the Fund prompt notice and
reasonable opportunity to defend against any such claim or action in its own
name or in the name of Administrator.
Administrator shall indemnify and hold harmless the Fund from and
against any and all claims, demands, expenses and liabilities which the Fund may
sustain or incur arising out of, or incurred because of, the negligence or
misconduct of Administrator or its agents or subcontractors, provided that the
Fund shall give Administrator prompt notice and reasonable opportunity to defend
against any such claim or action in its own name or in the name of the Fund.
12. Effective Date, Amendment, and Termination. This Agreement
shall become effective as of the date hereof and, unless terminated as
hereinafter provided, shall remain in effect thereafter from year to year so
long as such continuance is specifically approved with respect to the Fund at
least annually by a majority of the Trustees who are not interested persons of
the Fund or Administrator.
This Agreement may be modified or amended from time to time by mutual
agreement between the Administrator and the Fund and may be terminated by
Administrator or the Fund by at least sixty (60) days' written notice given by
the terminating party to the other party. Upon termination, the Fund shall pay
to Administrator such compensation as may be due under this Agreement as of the
date of such termination and shall reimburse Administrator for its costs,
expenses, and disbursements payable under this Agreement to such date. In the
event that, in connection with a termination, a successor to any of the duties
or responsibilities of Administrator hereunder is designated by the Fund by
written notice to Administrator, upon such termination Administrator shall
promptly, and at the expense of the Fund with respect to which this Agreement is
terminated, transfer to such successor all relevant books, records, and data
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established or maintained by Administrator under this Agreement and shall
cooperate in the transfer of such duties and responsibilities, including
provision, at the expense of the Fund, for assistance from Administrator
personnel in the establishment of books, records, and other data by such
successor.
13. Assignment. Any interest of Administrator under this Agreement
shall not be assigned either voluntarily or involuntarily, by operation of law
or otherwise, without the prior written consent of the Fund.
14. Books and Records. Administrator shall maintain, or oversee
the maintenance by such other persons as may from time to time be approved by
the Board of Trustees to maintain, the books, documents, records, and data
required to be kept by the Fund under the 1940 Act, the laws of the Commonwealth
of Massachusetts or such other authorities having jurisdiction over the Fund or
as may otherwise be required for the proper operation of the business and
affairs of the Fund (other than those required to be maintained by any
investment adviser retained by the Fund in accordance with Section 15 of the
1940 Act).
Administrator will periodically send to the Fund all books, documents,
records, and data of the Fund that are no longer needed for current purposes or
required to be retained as set forth herein. Administrator shall have no
liability for loss or destruction of said books, documents, records, or data
after they are returned to the Fund.
Administrator agrees that all such books, documents, records, and data
which it maintains shall be maintained in accordance with Rule 31a-3 of the 1940
Act and that any such items maintained by it shall be the property of the Fund.
Administrator further agrees to surrender promptly to the Fund any such items it
maintains upon request, provided that the Administrator shall be permitted to
retain a copy of all such items. Administrator agrees to preserve all such items
maintained under Rule 31a-1 for the period prescribed under Rule 31a-2 of the
1940 Act.
The Fund shall furnish or otherwise make available to Administrator
such copies of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of the Fund as Administrator
may, at any time or from time to time, reasonably require in order to discharge
its obligations under this Agreement.
15. Non-Liability of Trustees and Shareholders. Any obligation of
the Fund hereunder shall be binding only upon the assets of the Fund and shall
not be binding upon any Trustee, officer, employee, agent or shareholder of the
Fund. Neither the authorization of any action by the Trustees or shareholders of
the Fund nor the execution of this Agreement on behalf of the Fund shall impose
any liability upon any Trustee or any shareholder.
16. Use of Administrator's Name. The Fund may use its name or any
other name derived from the name "Columbia Management Advisors" only for so long
as this Agreement or any extension, renewal, or amendment hereof remains in
effect, including any similar agreement with any organization which shall have
succeeded to the business of Administrator as it relates to the services it has
agreed to furnish under this Agreement. At such time as this Agreement or any
extension, renewal or amendment hereof, or such other similar agreement shall no
longer be in effect, the Fund will cease to use any name derived from the name
"Columbia Management
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Advisors" or otherwise connected with Administrator, or with any organization
which shall have succeeded to Administrator's business herein described.
17. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as "herein,"
"hereof," and "hereunder" shall be deemed to refer to this Agreement as amended
or affected by any such amendments. Headings are placed herein for convenience
of reference only and shall not be taken as a part hereof or control or affect
the meaning, construction or effect of this Agreement. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original.
Dated: November 1, 2003
COLUMBIA FLOATING RATE FUND
Attest: By: __________________________________
Xxxxxx X. Xxxxxxx
President
_____________________________
Name:
Title:
COLUMBIA MANAGEMENT ADVISORS, INC.
Attest: By: __________________________________
Xxxxxx X. Xxxxxxx
Executive Vice President and
Chief Operating Officer
_____________________________
Name:
Title
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