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
-2-
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;
-3-
(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.
-4-
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.
-5-
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
-6-
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
-7-
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:/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President
/s/Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title:Asst. Secretary
COLUMBIA MANAGEMENT ADVISORS, INC.
Attest: By:/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Executive Vice President and
Chief Operating Officer
/s/Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Senior Counsel
-8-
