THE GALAXY FUND
SERVICING AGREEMENT
(Small Company Equity, Equity Value, Equity Growth, Equity Income,
International Equity, Asset Allocation, Short-Term Bond, Intermediate Bond,
High Quality Bond, Corporate Bond, Tax-Exempt Bond, New York Municipal Bond,
Connecticut Municipal Bond, Massachusetts Municipal Bond and Rhode Island
Municipal Bond Funds - Retail Shares)
Gentlemen:
We wish to enter into this Servicing Agreement with you concerning the
provision of administrative support services to your customers ("Customers")
who
may from time to time beneficially own shares of the Small Company Equity,
Equity
Value, Equity Growth, Equity Income, International Equity, Asset Allocation,
Short-Term Bond, Intermediate Bond, High Quality Bond, Corporate Bond, Tax-
Exempt Bond, New York Municipal Bond, Connecticut Municipal Bond, Massachusetts
Municipal Bond and Rhode Island Municipal Bond Funds, designated as such Funds'
Class K - Series 2 shares, Class C -Special Series 1 shares, Class H - Series 2
shares, Class I -Series 2 shares, Class G -Series 2 shares, Class N - Series 2
shares, Class L - Series 2 shares, Class D - Special Series 1 shares, Class J -
Series 2 shares, Class T - Series 2 shares, Class M -Series 2 shares, Class O -
Series 2 shares, Class P - Series 2 shares, Class Q -Series 2 shares and Class
R
- Series 2 shares, respectively, offered by The Galaxy Fund (the "Trust") to
investors maintaining with us certain qualified accounts as described in the
applicable prospectuses pertaining to such shares (such shares, which
constitute a separate series of shares of the Small Company Equity, Equity
Value, Equity Growth, Equity Income, International Equity, Asset Allocation,
Short-Term Bond, Intermediate Bond, High Quality Bond, Corporate Bond, Tax-
Exempt Bond, New York Municipal Bond, Connecticut Municipal Bond, Massachusetts
Municipal Bond and Rhode Island Municipal Bond Funds (collectively, the
"Funds"), are hereinafter referred to as "Retail Shares").
The terms and conditions of this Servicing Agreement are as follows:
Section l. You agree to provide the following administrative support
services to Customers who may from time to time beneficially own Retail Shares:
(i) processing dividend payments from us on behalf of Customers; (ii) arranging
for bank wires; (iii) providing subaccounting with respect to Retail Shares
beneficially owned by Customers or the information to the Retail shareholders
necessary for subaccounting; (iv) if required
by law, forwarding shareholder communications from the Retail shareholders
(such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Customers; (v)
aggregating and processing purchase, exchange and redemption requests from
Customers and placing net purchase, exchange and redemption orders with our
distributor or transfer agent; and (vi) providing such other similar services
as we may reasonably request to the extent you are permitted to do so under
applicable statutes, rules and regulations.
Section 2. You agree to provide the following services to Customers who may
from time to time beneficially own Retail Shares; (i) providing information
periodically to Customers showing their positions in Retail Shares; (ii)
responding to Customer inquiries relating to the services performed by you;
(iii) providing Customers with a service that invests the assets of their
accounts in Retail Shares; and (iv) providing such other similar services as we
may reasonably request to the extent you are permitted to do so under
applicable statutes, rules and regulations.
Section 3. We recognize that you may be subject to the provisions of the
Xxxxx-Xxxxxxxx Act and other laws governing, among other things, the conduct of
activities by Federally chartered and supervised banks and other banking
organizations. As such, you are restricted in the activities you may undertake
and for which you may be paid and, therefore, you will perform only those
activities which are consistent with your statutory and regulatory obligations.
You will act solely as an agent for, upon the order of, and for the account of,
your Customers.
Section 4. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you)
as may be reasonably necessary or beneficial in order to provide the
aforementioned services to Customers.
Section 5. Neither you nor any of your officers, employees or agents are
authorized to make any representations concerning Shares offered by the Trust
except those contained in the Trust's then current prospectuses and statement
of additional information pertaining to such Shares, copies of which will be
supplied to you, or in such supplemental literature or advertising as may be
authorized by the Trust in writing.
Section 6. For all purposes of this Agreement you will be deemed to be an
independent contractor, and will have no authority to act as agent for the
Trust in any matter or in any respect. By your written acceptance of this
Agreement, you agree to and do release, indemnify and hold the Trust harmless
from and against any and all direct or indirect liabilities or losses resulting
from requests, directions, actions or inactions of or
by you or your officers, employees or agents regarding your responsibilities
hereunder for the purchase, redemption, transfer or registration of Retail
Shares by or on behalf of Customers. You and your employees will, upon request,
be available during normal business hours to consult with the Trust or its
designees concerning the performance of your responsibilities under this
Agreement.
Section 7. In consideration of the services and facilities provided by you
pursuant to Section 1 hereof, the Trust will pay to you, and you will accept as
full payment therefor, a fee at the annual rate of (a) .25% of the average
daily net asset value of the Retail Shares of the Small Company Equity Fund,
Equity Value Fund, Equity Growth Fund, Equity Income Fund, International Equity
Fund and Asset Allocation Fund (collectively, "Equity Funds") beneficially
owned as of the end of each fiscal quarter by your Customers for whom you are
the dealer of record or holder of record or with whom you have a servicing
relationship, which fee will be computed at that time; and (b) .15% of the
average daily net asset value of the Retail Shares of the Short-Term Bond Fund,
Intermediate Bond Fund, High Quality Bond Fund, Corporate Bond Fund, Tax-Exempt
Bond Fund, New York Municipal Bond Fund, Connecticut Municipal Bond Fund,
Massachusetts Municipal Bond Fund and Rhode Island Municipal Bond Fund
(collectively, "Bond Funds") beneficially owned as of the end of each month by
your Customers for whom you are the dealer of record or holder of record or
with whom you have a servicing relationship, which fee will be computed at that
time. In consideration of the additional services provided by you pursuant to
Section 2 hereof, the Trust will pay to you, and you will accept as full
payment therefor, a fee at the annual rate of (a) .25% of the average daily net
asset value of the Retail Shares of the Equity Funds; and (b) .15% of the
average daily net asset value of the Retail Shares of the Bond Funds. Fees for
the Equity Funds will be payable quarterly and for the Bond Funds, monthly.
For purposes of determining the fees payable under this Section 7, the average
daily net asset value of your Customers' Retail Shares will be computed in the
manner specified in the Trust's Registration Statement (as the same is in
effect from time to time) in connection with the computation of the net asset
value of Retail Shares for purposes of purchases and
redemptions. The fee rates stated above may be prospectively increased or
decreased by the Trust, in its sole discretion, at any time upon notice to you.
Further, the Trust may, in its discretion and without notice, suspend or
withdraw the sale of Retail Shares including the sale of such Retail Shares to
you for the account of any Customer or Customers. All fees payable by the
Trust under this Agreement with respect to the Retail Shares of a particular
Fund shall be payable entirely out of the net investment income allocable to
such Retail Shares, and no shares of the Fund involved, other than the Retail
Shares, and no other Class of beneficial interest of the Trust (or a separate
series of shares of any such Class)
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shall be responsible for such fees. In addition, by your written acceptance of
this Agreement, you agree to and do waive such portion of the fee payable under
this Section 7 as is necessary to assure that the amount of such fee which is
required to be accrued on any day with respect to your Customers' Retail Shares
does not exceed the income to be accrued to your Customers' Retail Shares on
that day.
Section 8. Any person authorized to direct the disposition of the monies
paid or payable by the Trust pursuant to this Agreement will provide to the
Board of Trustees of the Trust, and the Board will review, at least quarterly,
a written report of the amounts so expended and the purposes for which such
expenditures were made. In addition, you will furnish the Trust or its
designees with such information as may be reasonably requested (including,
without limitation, periodic certifications confirming the provision to
Customers of the services described herein), and will otherwise cooperate with
the Trust and its designees (including, without limitation, any auditors
designated by the Trust), in connection with the preparation of reports to the
Board of Trustees concerning this Agreement and the monies paid or payable by
the Trust pursuant hereto, as well as any other reports or filings that may be
required by law.
Section 9. The Trust may enter into other similar Servicing Agreements with
any other person or persons without your consent.
Section 10. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) in no event will any of the services provided by
you hereunder be primarily intended to result in the sale of any Retail Shares;
(ii) the compensation payable to you hereunder, together with any other
compensation payable to you by Customers in connection with the investment of
their assets in the Retail Shares of the Funds, will be disclosed by you to
your Customers, will be authorized by your Customers and will not result in an
excessive or unreasonable fee to you; (iii) you will not advertise or otherwise
promote your Customer accounts primarily as a means of investing in Retail
Shares or establish or maintain Customer accounts for the primary purpose of
investing in Retail Shares; (iv) in the event an issue pertaining to this
Agreement or our Shareholder Services Plan related hereto is submitted for
shareholder approval, you will vote any Retail Shares held for your own account
in the same proportion as the vote of the Retail Shares held for your
Customers' accounts; and (v) you will not engage in activities pursuant to this
Agreement which constitute acting as a broker or dealer under state law unless
you have obtained the licenses required by such law.
Section 11. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by the Trust or its designee.
Unless sooner terminated, this Agreement
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will continue until May 19, 1995, and thereafter will continue automatically
for successive annual periods provided such continuance is specifically
approved at least annually by the Trust in the manner described in Section 14
hereof. This Agreement is terminable with respect to Retail Shares of any of
the Funds, without penalty, at any time by the Trust (which termination may be
by a vote of a majority of the Disinterested Trustees as defined in Section 14
hereof) or by you upon notice to the Trust.
Section 12. All notices and other communications between the parties to this
Agreement will be duly given if mailed, telegraphed, telexed or transmitted by
similar telecommunications device to the appropriate address stated herein, or
to such other address as either party shall so provide the other.
Section 13. This Agreement will be construed in accordance with the laws of
the Commonwealth of Massachusetts and is nonassignable by the parties hereto.
Section 14. This Agreement has been approved by vote of a majority of (i)
the Board of Trustees of the Trust and (ii) those trustees who are not
"interested persons (as defined in the Investment Company Act of 1940) of the
Trust and who have no direct or indirect financial interest in the operation of
the Shareholder Services Plan adopted by the Trust regarding the provision of
support services to the beneficial owners of Retail Shares or in any agreement
related thereto (the "Disinterested Trustees"), cast in person at a meeting
called for the purpose of voting on such approval.
Section 15. The names of "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.
If you agree to be legally bound by the provisions of this Agreement, please
sign a copy of this letter where indicated
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below and promptly return it to the Trust, c/o Xxxx Xxxxxxx, The Shareholder
Services Group, Inc. d/b/a 440 Financial, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX
00000-0000.
Very truly yours,
THE GALAXY FUND
By:__________________________
Date: ________________ (Authorized Officer)
Accepted and Agreed to:
[Name of Service Organization]
By:___________________________
Date: _________________ (Authorized Officer)
37028
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