<PAGE>
As filed with the Securities and Exchange Commission on November 2, 1998
Securities Act File No. 33-33617
Investment Company Act File No. 811-06051
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
PRE-EFFECTIVE AMENDMENT NO.
POST-EFFECTIVE AMENDMENT NO. 25
and/or /x/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
/x/
Amendment No. 27 /x/
(Check appropriate box or boxes)
--------------
GALAXY FUND II
(formerly named IBM CREDIT MUTUAL FUNDS)
(Exact Name of Registrant as Specified in Charter)
4400 Computer Drive
P.O. Box 5108
Westboro, Massachusetts 01581-5108
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (800) 628-0414
W. Bruce McConnel, III
DRINKER BIDDLE & REATH LLP
1345 Chestnut Street, Suite 1100
Philadelphia, Pennsylvania 19107
(Name and Address of Agent for Service)
Copy to:
Jylanne Dunne, Vice President
First Data Investor Services Group, Inc.
4400 Computer Drive
P.O. Box 5108
Westboro, Massachusetts 01581
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It is proposed that this filing will become effective (check appropriate
box):
/x/ immediately upon filing pursuant to paragraph (b), or
/ / on (date) pursuant to paragraph (b), or
/ / 60 days after filing pursuant to paragraph (a)(i), or
/ / on (date) pursuant to paragraph (a)(i)
--------------
/ / 75 days after filing pursuant to paragraph (a)(ii)
/ / on (date) pursuant to paragraph (a)(ii) of Rule 485
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If appropriate, check the following box:
/ / this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
The purpose of this Post-Effective Amendment No. 25 to the Registrant's
Registration Statement on Form N-1A is to file electronically certain exhibits.
The prospectuses and statements of additional information for Registrant's Large
Company Index, Small Company Index, Utility Index, U.S. Treasury Index and the
Municipal Bond Funds are incorporated herein by reference to Post-Effective
Amendment 24 to Registrant's Registration Statement on Form N-1A filed with the
Securities Exchange Commission on July 29, 1998.
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Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Post-Effective Amendment.
<PAGE>
GALAXY FUND II
FORM N-1A
Part C. Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements: Not Applicable
(b) Exhibits:
(1)(a) Declaration of Trust of Registrant dated February 22, 1990.
(1)(b) Amendment No. 1 to Declaration of Trust of Registrant dated
April 6, 1990.
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(1)(c) Amendment No. 2 to Declaration of Trust of Registrant dated
June 30, 1994.
(2) By-Laws of Registrant.
(3) Not applicable.
(4) Not applicable.
(5) Investment Advisory Agreement between Registrant and Fleet
Investment Advisors Inc. dated June 30, 1994.
(6)(a) Distribution Agreement between Registrant and First Data
Distributors, Inc. dated June 1, 1997 is incorporated herein
by reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on July 29, 1998.
(7)(a) Galaxy Fund II Deferred Compensation Plan and Related
Agreement effective as of March 1, 1996 is incorporated
herein by reference to Post-Effective Amendment No. 22 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on May 30, 1997.
(7)(b) The Galaxy Fund/The Galaxy VIP Fund/Galaxy Fund II Deferred
Compensation Plan and Related Agreement effective as of
January 1, 1997 is incorporated herein by reference to
Post-Effective Amendment No. 22 to Registrant's Registration
Statement on Form N-1A filed with the Commission on May 30,
1997.
(8) Custody Agreement among Registrant, The Chase Manhattan
Bank, N.A. and Fleet National Bank dated June 30, 1994.
(9)(a) Administration Agreement between Registrant and Fleet
National Bank dated October 25, 1994.
(9)(b) Sub-Administration Agreement between Fleet National Bank and
The Shareholder Services Group, Inc., d/b/a 440 Financial
dated March 31, 1995.
(9)(c) Transfer Agency and Services Agreement among Registrant,
First Data Investor Services Group, Inc. and Fleet National
Bank dated June 1, 1997 is incorporated herein by reference
to Post-Effective Amendment No. 24 to Registrant's
Registration Statement on Form N-1A filed with the
Commission on July 29, 1998.
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(9)(d) Amendment No. 1 to Transfer Agency and Services Agreement
among Registrant, First Data Investor Services Group, Inc.
and Fleet National Bank dated March 5, 1998 is incorporated
herein by reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on July 29, 1998.
(9)(e) Amendment No. 2 to Transfer Agency and Services Agreement
among Registrant, First Data Investor Services Group, Inc.
and Fleet National Bank dated April 1, 1998 is incorporated
herein by reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on July 29, 1998.
(9)(f) Services Agreement between Registrant and Columbia Trust
Company dated October 1, 1997 is incorporated herein by
reference to Post-Effective Amendment No. 24 to Registrant's
Registration Statement on Form N-1A filed with the
Commission on July 29, 1998.
(9)(g) Amendment No. 1 to Services Agreement between Registrant and
Columbia Trust Company dated April 1, 1998 is incorporated
herein by reference to Post-Effective Amendment No. 24 to
Registrant's Registration Statement on Form N-1A filed with
the Commission on July 29, 1998.
(9)(h) Form of Services Agreement among Registrant, Fleet National
Bank and First Data Investor Services Group, Inc. dated
April 1, 1998 is incorporated herein by reference to
Post-Effective Amendment No. 24 to Registrant's Registration
Statement on Form N-1A filed with the Commission on July 29,
1998.
(10) Opinion of Counsel that shares are validly issued, fully
paid and non-assessable is incorporated herein by reference
to Post-Effective Amendment No. 24 to Registrant's
Registration Statement on Form N-1A filed with the
Commission on July 29, 1998.
(11) Not Applicable.
(12) Not Applicable.
(13)(a) Purchase Agreement for Large Company Index Fund and Small
Company Index Fund dated July 31, 1990.
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<PAGE>
(13)(b) Purchase Agreement for U.S. Treasury Index Fund dated March
27, 1991.
(13)(c) Purchase Agreement for Utility Index Fund dated November 3,
1992.
(13)(d) Purchase Agreement for Municipal Bond Fund dated April 5,
1993.
(14) Not applicable.
(15) Not applicable.
(16)(a) Schedule for Computation of Performance Quotations for Large
Company Index, Small Company Index and U.S. Treasury Index
Funds.
(16)(b) Schedule for Computation of Performance Quotations for
Utility Index Fund.
(16)(c) Schedule for Computation of Performance Quotations for
Municipal Bond Fund.
(27) None
Item 25. Persons Controlled by or Under Common Control with Registrant
Registrant is controlled by its Board of Trustees.
Item 26. Number of Holders of Securities
Number of Record Holders
Title of Series as of October 20, 1998
--------------- ------------------------
Large Company Index Fund 23,442
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Small Company Index Fund 23,367
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U.S. Treasury Index Fund 6,282
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Utility Index Fund 8,204
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Municipal Bond Fund 1,232
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Item 27. Indemnification
Indemnification of Registrant's principal underwriter, custodian and
transfer
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<PAGE>
agent against certain losses is provided for respectively in Section 1.15 of the
Distribution Agreement incorporated by reference herein as Exhibit (6)(a), in
Section 20 of the Custody Agreement filed herein as Exhibit 8, and in Article 10
of the Transfer Agency and Services Agreement incorporated by reference herein
as Exhibit (9)(c). Registrant has obtained from a major insurance carrier a
directors' and officers' liability policy covering certain types of errors and
omissions. In addition, under Article XI, Sections 1 and 2 of the Declaration
of Trust (the "Trust Agreement"), any past or present trustee or officer of
Registrant, including persons who serve at the Registrant's request as
directors, officers or trustees of another organization in which Registrant has
any interest as a shareholder, creditor or otherwise (hereinafter referred to as
a "Covered Person") is indemnified to the fullest extent permitted by law
against liability and all expenses reasonably incurred by him in connection with
any claim, action, suit or proceeding to which he may be a party or otherwise
involved by reason of his being or having been a Covered Person of Registrant,
and against amounts paid or incurred by him in the settlement thereof. These
provisions do not authorize indemnification when it is determined, in the manner
specified in the Trust Agreement, that such Covered Person has not acted in good
faith in the reasonable belief that his actions were in or not opposed to the
best interests of the Registrant. Moreover, this provision does not authorize
indemnification when it is determined, in the manner specified in the Trust
Agreement, that the Covered Person would otherwise be liable to the Registrant
or its shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of his duties involved in the conduct of his
office. Expenses may be paid by the Registrant in advance of the final
disposition of any claim, action, suit or proceeding upon receipt of an
undertaking by a Covered Person to repay those expenses to the Registrant in the
event that it is ultimately determined that indemnification of the expenses is
not authorized under the Trust Agreement and the Covered Person either provides
security for such undertaking or insures the Registrant against losses from such
advances or the majority of disinterested Trustees or independent legal counsel
determines, in the manner specified in the Trust Agreement, that there is reason
to believe the Covered Person will be entitled to indemnification.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to trustees,
officers and controlling persons of Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a trustee, officer
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities' being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisers
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Fleet Investment Advisors Inc. ("Fleet") is an investment adviser
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act").
The list required by this Item 28 of officers and directors of Fleet,
together with information as to any business profession, vocation or employment
of a substantial nature engaged in by such officers and directors during the
past two years, is incorporated herein by reference to Schedules A and D of Form
ADV filed by Fleet pursuant to the Advisers Act (SEC File No. 801-20312).
Item 29. Principal Underwriter
(a) In addition to Galaxy Fund II, First Data Distributors, Inc. (the
"Distributor") currently acts as distributor for The Galaxy Fund, The Galaxy VIP
Fund, BT Insurance Funds Trust, CT & T Funds, Panorama Funds, and Wilshire
Target Funds, Inc. The Distributor is registered with the Securities and
Exchange Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. The Distributor is a subsidiary of First
Data Investor Services Group, Inc., which is located at 4400 Computer Drive,
P.O. Box 5108, Westboro, Massachusetts 01581.
(b) The information required by this Item 29(b) with respect to each
director, officer, or partner of the Distributor is incorporated by reference to
Schedule A of Form BD filed by the Distributor with the Securities and Exchange
Commission pursuant to the Securities Act of 1934 (File No. 8-14716).
(c) The Distributor receives no compensation from the Registrant for
distribution of its shares. The Distributor is an affiliated person of First
Data Investor Services Group, Inc., the Registrant's sub-administrator and
transfer agent, which receives sub-administration and transfer agency fees as
described in Parts A and B of this Registration Statement.
Item 30. Location of Accounts and Records
The records and books of the Registrant and the Funds are located at
the offices of:
(1) Fleet Investment Advisors Inc., 75 State Street, Boston,
Massachusetts 02106 (records relating to its functions as
investment adviser to all of the Registrant's Funds);
(2) First Data Distributors, Inc., 4400 Computer Drive, P.O. Box
5108, Westboro, Massachusetts 01581 (records relating to its
functions as distributor);
(3) Fleet National Bank, 111 Westminster Street, Providence, Rhode
Island 02903 (records relating to its functions as
administrator);
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(4) First Data Investor Services Group, Inc., 4400 Computer Drive,
P.O. Box 5108, Westboro, Massachusetts 01581 (records relating to
its functions as transfer agent and sub-administrator);
(5) Drinker Biddle & Reath LLP, 1345 Chestnut Street, Suite 1100,
Philadelphia, Pennsylvania 19107 (Registrant's Declaration of
Trust, By-Laws and minute books); and
(6) The Chase Manhattan Bank, 1211 Avenue of the Americas, New York,
New York 10036 (records relating to its functions as custodian).
Item 31. Management Services
Not applicable.
Item 32. Undertakings
Registrant hereby undertakes further to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
certifies that it meets all the requirements for effectiveness of this
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment No. 25 to its Registration
Statement on Form N-1A to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Pawtucket, State of Rhode Island, on the 2nd
day of November 2, 1998.
GALAXY FUND II
By: /s/ John T. O'Neill
----------------------------------
John T. O'Neill
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment No. 25 to its Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated.
Signature Title Date
--------- ----- ----
/s/ John T. O'Neill Trustee, President November 2, 1998
- ---------------------- and Treasurer
John T. O'Neill
* Dwight E. Vicks, Jr. Chairman of the November 2, 1998
- ---------------------- Board of Trustees
Dwight E. Vicks, Jr.
* Donald B. Miller Trustee November 2, 1998
- ----------------------
Donald B. Miller
* Louis DeThomasis Trustee November 2, 1998
- ----------------------
Louis DeThomasis
* Bradford S. Wellman Trustee November 2, 1998
- ----------------------
Bradford S. Wellman
* James M. Seed Trustee November 2, 1998
- ----------------------
James M. Seed
*By: /s/ John T. O'Neill
----------------------
John T. O'Neill
Attorney-in-Fact
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<PAGE>
GALAXY FUND II
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
T. O'Neill and W. Bruce McConnel, III, and either of them his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in his capacity as trustee or officer,
or both, to execute any and all amendments to the Trust's Registration Statement
on Form N-1A pursuant to the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and all instruments necessary or
incidental in connection therewith pursuant to said Acts and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, and to file the same with the Securities and Exchange Commission, and
either of said attorneys shall have full power and authority, to do and perform
in the name and on behalf of the undersigned in any and all capacities, every
act whatsoever requisite or necessary to be done, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys, or either of them, may lawfully do or cause to be done
by virtue hereof.
Dated: July 16, 1996 /s/ Dwight E. Vicks, Jr.
------------------------
Dwight E. Vicks, Jr.
<PAGE>
GALAXY FUND II
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
T. O'Neill and W. Bruce McConnel, III, and either of them his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in his capacity as trustee or officer,
or both, to execute any and all amendments to the Trust's Registration Statement
on Form N-1A pursuant to the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and all instruments necessary or
incidental in connection therewith pursuant to said Acts and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, and to file the same with the Securities and Exchange Commission, and
either of said attorneys shall have full power and authority, to do and perform
in the name and on behalf of the undersigned in any and all capacities, every
act whatsoever requisite or necessary to be done, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys, or either of them, may lawfully do or cause to be done
by virtue hereof.
Dated: July 15, 1996 /s/ Donald B. Miller
--------------------
Donald B. Miller
<PAGE>
GALAXY FUND II
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
T. O'Neill and W. Bruce McConnel, III, and either of them his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in his capacity as trustee or officer,
or both, to execute any and all amendments to the Trust's Registration Statement
on Form N-1A pursuant to the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and all instruments necessary or
incidental in connection therewith pursuant to said Acts and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, and to file the same with the Securities and Exchange Commission, and
either of said attorneys shall have full power and authority, to do and perform
in the name and on behalf of the undersigned in any and all capacities, every
act whatsoever requisite or necessary to be done, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys, or either of them, may lawfully do or cause to be done
by virtue hereof.
Dated: July 24, 1996 /s/ Brother Louis DeThomasis
----------------------------
Brother Louis DeThomasis
<PAGE>
GALAXY FUND II
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
T. O'Neill and W. Bruce McConnel, III, and either of them his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in his capacity as trustee or officer,
or both, to execute any and all amendments to the Trust's Registration Statement
on Form N-1A pursuant to the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and all instruments necessary or
incidental in connection therewith pursuant to said Acts and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, and to file the same with the Securities and Exchange Commission, and
either of said attorneys shall have full power and authority, to do and perform
in the name and on behalf of the undersigned in any and all capacities, every
act whatsoever requisite or necessary to be done, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys, or either of them, may lawfully do or cause to be done
by virtue hereof.
Dated: July 16, 1996 /s/ Bradford S. Wellman
-----------------------
Bradford S. Wellman
<PAGE>
GALAXY FUND II
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints John
T. O'Neill and W. Bruce McConnel, III, and either of them his true and lawful
attorney-in fact and agent with full power of substitution or resubstitution,
for him and in his name, place and stead, in his capacity as trustee or officer,
or both, to execute any and all amendments to the Trust's Registration Statement
on Form N-1A pursuant to the Investment Company Act of 1940, as amended, and the
Securities Act of 1933, as amended ("Acts"), and all instruments necessary or
incidental in connection therewith pursuant to said Acts and any rules,
regulations or requirements of the Securities and Exchange Commission in respect
thereof, and to file the same with the Securities and Exchange Commission, and
either of said attorneys shall have full power and authority, to do and perform
in the name and on behalf of the undersigned in any and all capacities, every
act whatsoever requisite or necessary to be done, as fully and to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys, or either of them, may lawfully do or cause to be done
by virtue hereof.
Dated: July 18, 1996 /s/ James M. Seed
-----------------
James M. Seed
<PAGE>
EXHIBIT INDEX
Exhibit No.: Description :
- ----------- -------------
(1)(a) Declaration of Trust of Registrant dated February 22, 1990.
(1)(b) Amendment No. 1 to Declaration of Trust of Registrant dated
April 6, 1990.
(1)(c) Amendment No. 2 to Declaration of Trust of Registrant dated
June 30, 1994.
(2) By-Laws of Registrant.
(5) Investment Advisory Agreement between Registrant and Fleet
Investment Advisors Inc. dated June 30, 1994.
(8) Custody Agreement among Registrant, The Chase Manhattan
Bank, N.A. and Fleet National Bank dated June 30, 1994.
(9)(a) Administration Agreement between Registrant and Fleet
National Bank dated October 25, 1994.
(9)(b) Sub-Administration Agreement between Fleet National Bank and
The Shareholder Services Group, Inc., d/b/a 440 Financial
dated March 31, 1995.
(11) Not Applicable.
(13)(a) Purchase Agreement for Large Company Index Fund and Small
Company Index Fund dated July 31, 1990.
(13)(b) Purchase Agreement for U.S. Treasury Index Fund dated March
27, 1991.
(13)(c) Purchase Agreement for Utility Index Fund dated November 3,
1992.
(13)(d) Purchase Agreement for Municipal Bond Fund dated April 5,
1993.
<PAGE>
(16)(a) Schedule for Computation of Performance Quotations for Large
Company Index, Small Company Index and U.S. Treasury Index
Funds.
(16)(b) Schedule for Computation of Performance Quotations for
Utility Index Fund.
(16)(c) Schedule for Computation of Performance Quotations for
Municipal Bond Fund.
<PAGE>
Exhibit (1)(a)
DECLARATION OF TRUST
DECLARATION OF TRUST, made February 22, 1990 by the Trustees
hereinafter named.
WHEREAS, the trustees at a Meeting held on February 22, 1990, resolved
to establish a trust fund for the investment and reinvestment of funds
contributed thereto; and
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time acquire in
any manner as Trustees hereunder, IN TRUST to manage and dispose of the same
upon the following terms and conditions for the pro rata benefit of the holders
from time to time of shares of any Series in this Trust, as hereinafter set
forth.
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<PAGE>
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "IBM Credit Mutual Funds,"
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the
context or specifically provided:
(a) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Investment Adviser", "Majority Shareholder Vote" (the 67%
or 50% requirement of Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings given them in
the 1940 Act;
(b) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time;
(c) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended, supplemented or restated from time to time;
(d) "Net Asset Value" shall mean the net asset value of each Series
of the Trust determined in the manner provided in Article X, Section 4 hereof;
(e) The "1940 Act" shall mean the Investment Company Act of 1940, as
amended from time to time, and the rules, regulations and interpretations
promulgated from time to time thereunder;
- 2 -
<PAGE>
(f) "Series" shall mean any series of Shares of the Trust established
in accordance with the provisions of Article III;
(g) "Shareholder" shall mean a record owner of Shares;
(h) "Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided from
time to time or, if more than one Series is authorized by the Trustees, the
equal proportionate transferable units into which each Series shall be divided
from time to time, and includes fractions of shares as well as whole shares
consistent with the requirements of Federal and/or other securities laws;
(i) The "Trust" shall mean the Massachusetts business trust
established by this Declaration of Trust, to be known as IBM Credit Mutual Funds
and reference to the Trust, when applicable to one or more Series of the Trust,
shall refer to any such Series; and
(j) The "Trustees" shall mean the individual trustees of the Trust
named herein or appointed or elected in accordance with Article IV in their
capacity as trustees of the Trust for the time being in office as such trustee
or trustees.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source
of managed investment in securities and to carry on such other business as the
Trustees may from time to time determine pursuant to their authority under this
Declaration of Trust.
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<PAGE>
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be divided
into Shares of one or more separate and distinct Series as the Trustees shall
from time to time create and establish. Each Share of a Series will represent
an equal proportionate interest in the Series with each other Share of the same
Series, none having priority or preference over another.
The number of authorized Shares shall be unlimited. The Trust may
issue Shares in fractional denominations to the same extent as whole Shares, and
Shares in fractional denominations shall be Shares having proportionately to the
respective fractions represented thereby all the rights of whole Shares.
The Trustees shall have full power and authority, in their sole
discretion and without Shareholder approval, to create and establish any Series
by setting the preference, conversion or other rights, voting powers,
restrictions, limitations or dividends, and qualifications or terms and
conditions of, or rights to require redemption of, any unissued Shares and to
take such other action with respect to the Shares as the Trustees deem desirable
and which is otherwise in accordance with this Declaration of Trust. The
Trustees shall have full power and authority, in their sole discretion and
without Shareholder approval, to establish or change from time to time the par
value of Shares as the Board shall determine, provided the rights of outstanding
Shares shall not thereby be impaired in any material way. The Trustees may
divide or combine the Shares from time to time into a greater or lesser number
without thereby changing the proportionate beneficial interests in the Series of
Shares so divided or combined.
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<PAGE>
ESTABLISHMENT AND ABOLISHMENT OF SERIES
Section 2. The establishment of any Series shall be effective upon
the adoption of a resolution by the Trustees setting forth such establishment
and designating the relative rights and preferences of the Shares of such
Series. At any time that there are no Shares outstanding of any particular
Series previously established and designated, the Trustees may abolish such
Series and the establishment and designation thereof.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded in the books
of the Trust or a transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to the
Shareholders of each Series and as to the number of Shares of each Series held
from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees may issue Shares on such terms and for
such consideration, which may consist of cash or tangible or intangible property
or a combination thereof, as they may from time to time authorize. Such Shares,
when so issued, shall be fully paid and non-assessable.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for the issue
or sale of Shares of a particular Series, together with all assets in which such
consideration is invested or
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<PAGE>
reinvested, all income, earnings, profits, and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall be referred to as "assets belonging to" that Series.
In addition, any assets, income, earnings, profits, and proceeds thereof, funds
or payments which are not readly identifiable as belonging to any particular
Series shall be allocated by the Trustees between and among one or more of the
Series in such manner as they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and shall be referred to as assets
belonging to that Series. The assets belonging to a particular Series shall be
so recorded upon the books of the Trust, and shall be held by the Trustees in
Trust for the benefit of the holders of Shares of that Series. The assets
belonging to each particular Series shall be charged with the liabilities of
that Series and all expenses, costs, charges and reserves attributable to that
Series. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as arising from any particular Series
shall be allocated and charged by the Trustee between or among any one or more
of the Series in such manner as the Trustees, in their sole discretion, deem
fair and equitable, and shall be referred to as "liabilities belonging to" that
Series. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
Any creditor of any Series may look only to the assets of that Series to satisfy
such creditor's debt.
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NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Section 7. Shares shall be deemed to be personal property giving
only the rights provided in this Declaration of Trust. All persons acquiring
Shares shall acquire the same subject to the provisions of this Declaration of
Trust and the By-Laws established hereunder as in effect from time to time, and
by virtue of having become a Shareholder, shall be held to have expressly
assented and agreed to the terms hereof and to have become a party hereto. No
Shareholder shall be deemed to have a severable ownership in any individual
asset of the Trust or any right of partition or possession thereof or to an
accounting thereof, but each Shareholder shall have a proportionate undivided
beneficial interest in the Trust. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or Trustees, but shall entitle
the representative only to the rights of said decedent under this Trust.
Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust, shall have any power to bind any Shareholder personally or, except
as specifically provided herein, to call upon any Shareholder for the payment of
any sum of money or assessment whatsoever other than such as the Shareholder may
at any time personally agree to pay by way of subscription for any Shares or
otherwise. Every note, bond, contract or other undertaking issued by or on
behalf of the Trust or the Trustees relating to the Trust shall include a
recitation limiting
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the obligation represented thereby to the Trust and its assets (but the omission
of such a recitation shall not operate to bind any Shareholder).
ARTICLE IV
THE TRUSTEES
INITIAL TRUSTEES, NUMER OF TRUSTEES AND ELECTION
Section 1. The number of Trustees shall be as provided in the
By-Laws or as fixed from time to time by the Trustees. A Trustee shall not be
required to be a Shareholder. The Shareholders may elect Trustees at any
meeting of Shareholders called by the Trustees for that purpose.
TERM OF OFFICE OF TRUSTEES
Section 2. Each Trustee shall hold office during the lifetime of
this Trust, and until its termination as hereinafter provided or, if sooner,
until the next meeting of Shareholders called for the purpose of electing
Trustees and the election and qualification of his successor; except that (a)
any Trustee may resign his trust by written instrument signed by him and
delivered to the Secretary of the Trust, with notice thereof by regular mail to
all the Trustees, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; (b) any Trustee may be removed at any
time by written instrument, signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal shall
become effective; (c) any Trustee who requests in writing to be retired or who
has become incapacitated by illness or injury may be retired by written
instrument signed by a majority of the other Trustees, specifying the date of
his retirement; and (d) any Trustee may be
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removed by the Shareholders of two-thirds of the outstanding Shares through a
declaration in writing or by a vote cast in person or by proxy at a special
meeting called for that purpose.
APPOINTMENT OF TRUSTEES
Section 3. In case of the declination, death, resignation,
retirement, removal, incapacity, or inability of any of the Trustees, or in case
a vacancy shall, by reason of an increase in number or for any other reason
exist, the remaining Trustees shall fill such vacancy by appointing such other
person as they, in their discretion, shall see fit consistent with the
limitations under the 1940 Act. Within 3 months of such appointment the
Trustees shall cause notice of such appointment to be mailed to each Shareholder
at his address as recorded on the books of the Trust. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this Trust,
the Trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 4. Any Trustee may, by power of attorney, delegate his
power for a period not exceeding six months at any one time to any other Trustee
or Trustees, provided that
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in no case shall less than two Trustees personally exercise the other powers
hereunder except as herein otherwise expressly provided.
VACANCY IN BOARD OF TRUSTEES
Section 5. Whenever a vacancy on the Board of Trustees shall occur
and until such vacancy is filled, or while any Trustee is physically or mentally
incapacitated by reason of disease or otherwise, the other Trustees shall have
all the powers hereunder and the certificate of the other Trustees of such
vacancy or incapacity shall be conclusive, provided, however, that no vacancy
shall remain unfulfilled for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 6. The death, declination, resignation, retirement,
removal, incapacity, or inability of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 7. The assets of the Trust shall be held separate and
apart from any assets now or hereafter held in any capacity other than as
Trustee hereunder by the Trustees. All of the assets of the Trust shall at all
times be considered as vested in the Trustees.
LEGAL TITLE
Section 8. Legal title to all Trust assets shall be vested in the
Trustees as joint tenants except that the Trustees shall have power to cause
legal title to any Trust assets to be held by or in the name of one or more of
the Trustees, or in the name of the Trust, or in the name of any other person or
nominee, on such terms as the Trustees may determine. The right, title and
interest of the Trustees in the Trust assets shall vest automatically in each
person who may
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hereafter become a Trustee. Upon the resignation, removal or death of a
Trustee, such Trustee shall automatically cease to have any right, title or
interest in any of the Trust assets, and the right, title and interest of such
Trustee in the Trust assets shall vest automatically in the remaining Trustees.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered.
ARTICLE V
POWERS OF THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed
under the direction of the Trustees, and they shall have all powers necessary
and desirable to carry out that responsibility.
POWERS
Section 2. The Trustees, in all instances, shall act as
principals, and are and shall be free from the control of the Shareholders. The
Trustees shall have full power and authority to do any and all acts and to make
and execute any and all contracts and instruments that they may consider
necessary or appropriate in connection with the management of the Trust or any
Series. The Trustees shall not in any way be bound or limited by present or
future laws or customs in regard to Trust investments, but shall have full
authority and power to make any and all investments which they, in their
uncontrolled discretion, shall deem proper to accomplish the purpose of this
Trust. Without limiting the foregoing, the Trustees shall have power and
authority:
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(a) To invest and reinvest cash and other property, and to hold cash
or other property uninvested without in any event being bound or limited by any
present or future law or custom in regard to investments by Trustees;
(b) To sell (subject to the provisions of Article XII, Section 5(b)),
exchange, lend, pledge, mortgage, hypothecate, write options on and lease any or
all of the assets of the Trust;
(c) To borrow funds;
(d) To adopt By-Laws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and repeal
them to the extent that they do not reserve that right to the Shareholders;
(e) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate;
(f) To employ a bank or trust company as custodian of any assets of
the Trust subject to any conditions set forth in this Declaration of Trust or in
the By-Laws, if any;
(g) To retain a transfer agent and shareholder servicing agent, or
both;
(h) To employ an Investment Adviser or Investment Advisers to perform
services pursuant to investment advisory or management contract(s) as
hereinafter provided;
(i) To provide for the distribution of interests in the Trust either
through a Principal Underwriter in the manner herein provided for or by the
Trust itself, or both;
(j) To delegate the performance of such obligations and
responsibilities, and the exercise of such authority, as they consider
desirable, to any officers of the Trust and to any agent, custodian, Investment
Adviser or Principal Underwriter;
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(k) To establish separate and distinct Series of Shares with
separately defined investment objectives and policies, and distinct investment
purposes, in accordance with the provisions of Article III hereof;
(l) To allocate assets, liabilities and expenses of the Trust to a
particular Series or to apportion the same between or among two or more Series;
provided that any liabilities or expenses belonging to a particular Series,
shall be payable solely out of the assets belonging to that Series as provided
for in Article III hereof;
(m) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for;
(n) To set record dates in the manner hereinafter provided for;
(o) To establish, from time to time, a minimum Share purchase
requirement, and to require the redemption of the Shares of any Shareholders
whose investment is less than an established minimum selected by the Trustees,
upon notice to each such Shareholder;
(p) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem appropriate;
(q) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(r) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or either in
the name of the Trust or in
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the name of a custodian or a nominee or nominees, subject in either case to
proper safeguards approved by the Trustees;
(s) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of which is
held in the Trust; to consent to any contract, lease, mortgage, purchase, or
sale of property by such corporation or concern; and to pay call or
subscriptions with respect to any security held in the Trust;
(t) To join with other security holders in acting through a committee
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to any of the foregoing such powers and authorities
with relation to any security (whether or not so deposited or transferred) as
the Trustees shall deem proper, and to agree to pay, and to pay, such portion of
the expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(u) To compromise, arbitrate, or otherwise adjust claims in favor of
or against the Trust or any matter in controversy including, but not limited to,
claims for taxes;
(v) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(w) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any of or all such obligations;
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(x) Entirely from Trust property, to purchase and pay for such
insurance as they may deem necessary or appropriate for the conduct of the
Trust, including, without limitation, insurance policies insuring the assets of
the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, Investment Advisers or managers, Principal
Underwriters or independent contractors of the Trust, individually or jointly,
against all claims and liabilities of every nature arising by reason of holding,
being or having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such person as Shareholder,
Trustee, officer, employee, agent, Investment Adviser or Manager, Principal
Underwriter or independent contractor, including any action taken or omitted
that may be determined to constitute negligence, whether or not the Trust would
have the power to indemnify such person against such liability;
(y) To pay pensions for faithful service, as deemed appropriate by
the Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust; and
(z) To engage in any other lawful activity in which trusts organized
under Massachusetts General Laws, Chapter 182, or any successor statute thereto,
may engage.
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TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 3. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares to and buy such Shares from any such person or any firm
or company in which he is interested, subject only to the general limitations
herein contained as to the sale and purchase of such Shares; and all subject to
any restrictions which may be contained in the By-Laws.
ACTION BY THE TRUSTEES
Section 4. Except as otherwise expressly required by the 1940 Act,
the Trustees shall act by (a) majority vote of the Trustees present at a meeting
duly called and at which a quorum is present or (b) unanimous written consent
without a meeting. Subject to the preceding sentence, the Trustees may
participate in a meeting by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. At any meeting of the Trustees, a majority of the
Trustees shall constitute a quorum. Meetings of the Trustees may be called
orally or in writing by any Trustee. Notice of the time, date and place of all
meetings of the Trustees shall be given by the party calling the meeting to each
Trustee by telephone or telegram sent to his home or business address at least
24 hours in advance of the meeting or by written notice mailed to his home or
business address at least 72 hours in advance of the meeting. Notice need not
be given to any Trustee who attends the meeting without objecting to the lack of
notice or who executes a written waiver of notice with respect to the meeting,
either before or after holding this meeting. Subject to the
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requirements of the 1940 Act, the Trustees by majority vote may delegate to any
Trustee their authority to approve particular matters or take particular actions
on behalf of the Trust.
EXECUTIVE COMMITTEE
Section 5. The Trustees may appoint an Executive Committee
consisting of two or more Trustees which, if so provided in the By-Laws or the
resolution appointing such Committee, shall consult with and advise the officers
and agents of the Trust in the management of its business and exercise all
powers of the Trustees that may be lawfully delegated to said Committee by the
Trustees. If so authorized, the members of the Executive Committee present at
any meeting, whether or not they constitute a quorum, may appoint another
Trustee to act in the place of an absent member of the Executive Committee.
Vacancies on the Executive Committee shall be filled by the Trustees at any
regular or special meeting. The Executive Committee shall keep regular minutes
of its proceedings and report the same to the Trustee when required.
OTHER COMMITTEES
Section 6. The Trustees may appoint other committees consisting in
each case of such number of Trustees (not less than two) and having and
exercising, to the extent permitted by law, such powers as the Trustees may
determine in the resolution appointing any such committee. A majority of all
members of any such committee may determine its action, and fix the time and
place of its meetings, unless the Trustees by resolution provide otherwise. The
members of any such committee present at any meeting, whether or not they
constitute a quorum, may appoint another Trustee to act in the place of an
absent member of the Committee. The Trustees shall have the power at any time
to change the members and, to the extent permitted by
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law, the powers of any such committee, to fill vacancies and to discharge any
such committee. Each committee shall keep regular minutes of its proceedings
and report the same to the Trustees when required.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III, Section 5,
the Trustees shall be reimbursed from the Trust estate or the assets belonging
to the appropriate Series, as the case may be, for their expenses and
disbursements, in connection with the Trust or any Series, including, without
limitation, fees and expenses of Trustees who are not Interested Persons of the
Trust, interest expense, taxes, fees and commissions of every kind, expenses of
pricing Trust portfolio securities, expenses of issue, repurchase and redemption
of shares including expenses attributable to a program of periodic repurchases
or redemptions, expenses of registering and qualifying the Trust and its Shares
under Federal and State laws and regulations, charges of any Investment Adviser,
manager or sub-adviser, Principal Underwriter, custodian, transfer agent,
registrar, shareholder, servicing agent and such other agents or independent
contractors, expenses of preparing and setting up in type prospectuses and
statements of additional information, expenses of printing and distributing
prospectuses and statements of additional information sent to existing
Shareholders, auditing and legal expenses, reports to Shareholders, expenses of
meetings of Shareholders and proxy solicitations therefor, insurance expenses,
association membership dues; and for such non-recurring items as may arise,
including litigation to which the Trust is a party; and for all losses and
liabilities by them incurred in administering the Trust;
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and for the payment of such expenses, disbursements, losses and liabilities the
Trustees shall have a lien on the assets belonging to the Trust or the
appropriate Series prior to any rights or interests of the Shareholders thereto.
This section shall not preclude the Trust from paying any of the aforementioned
fees and expenses directly.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees
may, in their discretion from time to time, enter into an investment advisory or
management contract(s) with respect to the Trust or any Series thereof whereby
the other party(ies) to such contract(s) shall undertake to furnish the Trustees
such management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Trustees may in their discretion determine.
Notwithstanding any provisions of this Declaration of Trust, the Trustees may
authorize the Investment Adviser(s) (subject to such general or specific
instructions as the Trustees may from time to time adopt) to effect on behalf of
the Trustees purchases, sales or exchanges of portfolio securities and other
investment instruments of the Trust selected by such Investment Adviser without
further consultation with the Trustees or may authorize any officer, agent or
Trustee to effect such purchases, sales or exchanges pursuant to instructions or
recommendations of the Investment Adviser (and all without further action by the
Trustees). Any such purchases, sales and exchanges shall be deemed to have been
authorized by all of the Trustees.
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The Trustees may, subject to applicable requirements of the 1940 Act,
including those relating to Shareholder approval, authorize the Investment
Adviser to employ one or more sub-advisers from time to time to perform such of
the acts and services of the Investment Adviser, and upon such terms and
conditions, as may be agreed upon between the Investment Adviser and any such
sub-adviser.
PRINCIPAL UNDERWRITER, DISTRIBUTOR
Section 2. The Trustees may, in their discretion from time to
time, enter into a contract(s) providing for the sale of the Shares, whereby the
Trust may either agree to sell the Shares to the other party to the contract, or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as the Trustees may, in their
discretion, determine not inconsistent with the provisions of this Article VII;
and such contract may also provide for the redemption, repurchase or sale of
Shares by such other party as principal or as agent of the Trust.
TRANSFER AGENT, ADMINISTRATORS
Section 3. The Trustees may, in their discretion from time to
time, enter into transfer agency, shareholder service and administration
contracts, whereby the Trustees delegate to the other party or parties to such
contracts the responsibility to furnish transfer agency, shareholder service and
administrative services to the Shareholders and/or the Trust. The contracts
shall be on such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Declaration of Trust.
Such services may be provided by one or more entities.
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PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1,
2 and 3 of this Article VII or in Article VIII may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees, officers of the Trust or Shareholders may be an officer, director,
trustee, shareholder or member of such other party (or affiliate of such other
party) to the contract, and no such contract shall be invalidated or rendered
voidable by reason of the existence of any relationship, nor shall any person
holding such relationship be liable merely by reason of such relationship for
any loss or expense to the Trust under or by reason of said contracts or
accountable for any profit realized directly or indirectly therefrom, provided
that the contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article VII or Article VIII, as the case may be.
The same person (including a firm, corporation, partnership, trust, or
association) may be the other party to contracts entered into pursuant to
Sections 1, 2 and 3 above or Article VIII, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any or all of
the contracts mentioned in this Section 4 without affecting the validity or
enforceability thereof.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Sections 1 and 2
of this Article VII shall be consistent with and subject to the requirements of
Section 15 of the 1940 Act with respect to its continuance and effect, its
termination and the method of authorization and approval of such contract or
renewal thereof; and no amendment to any contract entered into pursuant to
Section 1 of this Article VII shall be effective unless assented to by a
Majority Shareholder Vote.
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ARTICLE VIII
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. Pursuant to the requirements of Section 17(f) of the
1940 Act, the Trustees shall at all times employ a bank or trust company having
capital, surplus and undivided profits of at least $500,000 as custodian with
delegated authority as their agent:
(a) to hold the securities owned by the Trust and deliver the same
upon written order;
(b) to receive and receipt for any monies due to the Trust and
deposit the same in its own banking department or elsewhere as the Trustees may
direct; and
(c) to disburse such funds upon orders or vouchers. The Trustees may
also delegate, or cause to be delegated, obligations and responsibilities to
such custodian as their agent:
(a) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
(b) to compute, if authorized to do so by the Trustees, the Net Asset
Value of any Series in accordance with the provisions hereof; and
(c) to perform such other duties and tasks as the Trustees deem to be
necessary.
The basis of compensation for the foregoing services shall be as agreed upon
between the Trustees and the custodian.
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The Trustees may also authorize the custodian to employ one or more
sub-custodians, from time to time, to perform such of the acts and services of
the custodian, and upon such terms and conditions as may be agreed upon between
the custodian and such sub-custodian and approved by the Trustees, provided that
in every case such sub-custodian shall be a bank or trust company organized
under the laws of the United States or one of the states thereof and having
capital, surplus and undivided profits of at least $500,000 or such other person
as may be permitted by the Commission, or otherwise in accordance with the 1940
Act.
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may authorize and/or direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934 or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular series of any issuer deposited within
the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trustees or their duly authorized agents (which may include the Investment
Adviser).
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ARTICLE IX
SHAREHOLDERS' VOTING POWERS, MEETINGS AND INSPECTION OF RECORDS
VOTING POWERS
Section 1. The Shareholders shall have the power to vote (i) for
the election of Trustees as provided in Article IV, Section 1, (ii) with respect
to any investment advisory or management contract as provided in Article VII,
Section 1, (iii) with respect to the amendment of this Declaration of Trust as
provided in Article XII, Section 11, (iv) to the same extent as the shareholders
of a Massachusetts business corporation as to whether or not a court action,
proceeding or claim should be brought or maintained derivatively or as a class
action on behalf of the Trust or the Shareholders, provided, however, that a
Shareholder of a particular Series shall not be entitled to bring any derivative
or class action on behalf of any other Series of the Trust and (v) with respect
to such additional matters relating to the Trust as may be required or
authorized by law, this Declaration of Trust or the By-Laws of the Trust, if
any, or any registration of the Trust with the Commission or any State, or as
the Trustees may consider desirable. On any matter submitted to a vote of the
Shareholders, all shares shall be voted by individual Series, except (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and (ii) when the Trustees have determined that the matter
affects only the interests of one or more Series, then only the Shareholders of
such Series shall be entitled to vote thereon. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote, and each
fractional Share shall be entitled to a proportionate fractional vote. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy. Unless Shares are issued, the Trustees may exercise all
rights of
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Shareholders and may take any action required or permitted by law, this
Declaration of Trust or any By-Laws of the Trust to be taken by Shareholders.
MEETINGS
Section 2. Special meetings of the Shareholders of any Series may
be called by the Trustees and shall be called by the Trustees for the purpose of
voting upon the question of the removal of any Trustee or Trustees when
requested in writing so to do by the Shareholders of not less than ten per
centum of the outstanding Shares. Whenever ten or more Shareholders meeting the
qualifications set forth in Section 16(c) of the 1940 Act seek the opportunity
of furnishing materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall comply with the
provisions of said Section 16(c) with respect to providing such Shareholders
access to the list of Shareholders or the mailing of such materials to
Shareholders. Shareholders shall be entitled to at least fifteen days' notice
of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in person or by
proxy shall be a quorum for the transaction of business at a Shareholders'
meeting, except that where any provision of law or of this Declaration of Trust
permits or requires that holders of any Shares shall vote as a Series, then a
majority of the number of Shares of that Series entitled to vote shall be
necessary to constitute a quorum for the transaction of business by that Series.
Any lesser number shall be sufficient for adjournments. Any adjourned session
or sessions may be held, within a reasonable time after the date set for the
original meeting, without the necessity of further notice. Except when a larger
vote is required by law, any provision of this Declaration of
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Trust or the By-Laws, if any, a majority of the Shares voted in person or by
proxy shall decide any questions and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust permits or
requires that the holders of any Shares shall vote as a Series, then a majority
of the Shares of that Series voted on the matter shall decide that matter
insofar as that Series is concerned.
ACTION BY WRITTEN CONSENT
Section 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
larger proportion thereof as shall be required by any express provision of law
or the Declaration of Trust or the By-Laws) consent to the action in writing and
such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for purposes as a vote taken at a
meeting of Shareholders.
INSPECTION OF RECORDS
Section 5. The Trustees shall from time to time determine whether
and to what extent, and at what times and places, and under what conditions and
regulations, the accounts and books of the Trust or any of them shall be open to
the inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees.
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ARTICLE X
DISTRIBUTIONS, REDEMPTIONS AND REPURCHASES AND NET ASSET VALUE
DISTRIBUTIONS
Section 1.
(a) The Trustees may, from time to time, distribute to the
Shareholders of each Series such income and capital gains accrued or realized as
the Trustees may in their discretion determine, after providing for actual and
accrued expenses and liabilities of such Series (including such reserves as the
Trustees may establish), determined in accordance with good accounting
practices. The Trustees shall have full discretion to determine which items
shall be treated as income and which items as capital gains and their
determination shall be binding upon the Shareholders. Distributions shall be
made pro rata to the Shareholders of each Series in proportion to the number of
Shares of each Series held by each of them. Such distribution shall be made in
cash, in Shares or in kind, or a combination thereof, as determined by the
Trustees. Any such distribution paid (i) in Shares will be paid in the Net
Asset Value thereof as determined in accordance with Section 4 of this Article X
and (ii) in kind will be paid at the value thereof as determined in accordance
with Section 4 of this Article X and such determination shall be binding upon
the Shareholders.
Without limiting the generality of the foregoing, the distributions of
income and capital gains with respect to each Series shall be in such amounts as
may be declared from time to time by the Trustees.
(b) The Trustees shall have the power to the fullest extent permitted
by the laws of Massachusetts at any time to declare and cause to be paid
distributions on Shares of a
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particular Series, from the assets belonging to that Series, which distributions
at the election of the Trustees, may be paid daily or otherwise pursuant to a
standing resolution or resolutions adopted with such frequency as the Trustees
may determine.
(c) Unless the Shareholder has notified the transfer agent in writing
of his election to receive such distributions in cash, distributions will be
reinvested at the Net Asset Value thereof at the close of business on the
reinvestment date established by the Trustees.
(d) Notwithstanding anything in this instrument to the contrary, the
Trustees may at any time declare and distribute pro rata among the Shareholders
of a particular Series as of a record date for that Series, fixed as provided in
Article XII Section 4 hereof a "Share Dividend".
REDEMPTIONS AND REPURCHASES
Section 2. In case any Shareholder of a particular Series desires
to dispose of his Shares he may deposit at the office of the transfer agent or
other authorized agent of that Series a written request or such other form of
request as the Trustees may from time to time authorize requesting that the
Series purchase the Shares in accordance with this Section 2; and any
Shareholder upon following such procedures for redemption as the Trustees may
from time to time authorize shall be entitled to require the Series to purchase,
and the Series or the Principal Underwriter of the Series shall purchase, his
said Shares but only at the Net Asset Value thereof (as described in Section 4
of this Article X). The Series shall make payment for any such Shares to be
redeemed as aforesaid, in cash from the assets of that Series or, at the option
of the Series, wholly or partly in such portfolio securities of the Series as
the Series shall select, and the Trustees may authorize officers of the Trust or
the Principal Underwriter of the Series to make
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payment for such Shares to the Shareholder of record within 7 days after the
date upon which the request is effective. Any such redemption paid wholly or
partly in portfolio securities will be paid at the value thereof as determined
in accordance with Section 4 of this Article X, and such determination shall be
binding on the Shareholders. The Trustees may impose a sales charge upon the
redemption of shares upon such terms and conditions as the Trustees shall
determine.
The Trust may elect, pursuant to Rule 18f-1 under the 1940 Act, to pay
in cash all requests for redemption by any Shareholder, limited in amount with
respect to each Shareholder during any ninety-day period to the lesser of (i)
$250,000, or (ii) 1% of the net asset value of the Trust at the beginning of
such period.
The Trust reserves the right, upon 60 days' prior written notice to
the Shareholder, to liquidate involuntarily any Shareholder's account if the
aggregate Net Asset Value as determined in Section 4 of this Article X of the
Shares held in the account is less than $500.
The Trust may also purchase or repurchase Shares at a price not
exceeding the Net Asset Value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
The right of any holder of Shares redeemed or purchased by the Trust
to receive distributions thereon and all other rights of such holder with
respect to such Shares shall terminate at the time as of which the redemption or
purchase price of such Shares is determined or as otherwise described in the
current Prospectus or Statement of Additional Information for such Shares,
except the right of such holder to receive (i) the redemption or purchase price
of such Shares from the Trust or the Principal Underwriter, as the case may be,
and (ii) any
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distribution to which such holder has previously become entitled as the record
holder of such Shares on the record date for such distribution.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 3. The Trustees may declare a suspension of the right of
redemption or postpone the date of payment as permitted under the 1940 Act.
Such suspension shall take effect at such time as the Trustees shall specify but
not later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end. In the
case of a suspension of the right of redemption, a Shareholder whose Shares have
not been redeemed may either withdraw his request for redemption or receive
payment based on the Net Asset Value per Share next determined after the
termination of the suspension.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 4. The term Net Asset Value of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. The Net Asset Value per
Share shall be determined separately for each Series and shall be determined on
such days and at such times as the Trustees may determine. Such determination
shall be made with respect to securities for which market quotations are readily
available, at the market value of such securities; and with respect to other
securities and assets, at the fair value as determined in good faith by the
Trustees, provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as permitted
under the 1940 Act or insofar as permitted by any order of the Commission
applicable to the Series. The Trustees may delegate any of their powers and
duties under this Section 4 with
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respect to appraisal of assets and liabilities. At any time, the Trustees may
cause the Net Asset Value per Share last determined to be determined again in
similar manner and may fix the time when such redetermined value shall become
effective.
CONSTANT NET ASSET VALUE
Section 5. For the purpose of allowing the Net Asset Value per
Share of any Series to remain constant, the Trustees shall be entitled to
declare, pay and credit as dividends daily the net income (which may include or
give effect to realized and unrealized gains and losses, as determined in
accordance with the Trust's accounting and portfolio valuation policies) of any
Series. If the amount so determined for any day is negative, the Trustees shall
be entitled, without the payment of monetary compensation but in consideration
of the interest of the Series and its Shareholders in maintaining a constant Net
Asset Value per Share, to redeem pro rata from all Shareholders of the Series at
the time of such redemption (in proportion to their respective holdings of
Shares) such number of outstanding Shares of the Series, or fractions thereof,
as shall be required to permit the Net Asset Value per Share to remain constant.
The Trustees may delegate the powers and duties specified in this Section 5.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have
acted under the reasonable belief that their actions are in the best interest of
the Trust, the Trustees shall not be responsible for or liable in any event for
neglect or wrongdoing of any Trustee or any other officer, agent, employee or
Investment Adviser, Principal Underwriter, transfer agent or
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custodian of the Trust, but nothing contained herein shall protect any Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Every note, bond, contract, instrument, certificate or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his capacity as Trustees or Trustee, and such Trustees or Trustee shall
not be personally liable thereon.
INDEMNIFICATION
Section 2.
(a) Subject to the exceptions and limitations contained in Section
2(b) below:
(i) every person who is, or has been, a Trustee or officer of
the Trust (including persons who serve at the Trust's request as directors,
officers or Trustees of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") shall be indemnified by the Trust or any Series to the fullest extent
permitted by law, against liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or proceeding in which
he becomes involved, as a party or otherwise, by virtue of his being or having
been a Trustee or officer of the Trust, and against amounts paid or incurred by
him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened while in office or thereafter, and the
words "liability" and "expenses" shall include,
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without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office,
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are
neither Interested Persons of the Trust nor are parties to the matter based upon
a review of readily available facts (as opposed to a full trial-type inquiry);
or
(C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full
trial-type inquiry); PROVIDED, HOWEVER, that any Shareholder may, by
appropriate legal proceedings, challenge any such determination by the
Trustees or by independent counsel.
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, shall continue as to a
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person who has ceased to be such Trustee or officer and shall inure to the
benefit of the heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to which Trust
personnel and any other persons, other than Trustees and officers, may be
entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
subsection (a) of this Section 2 may be paid by the Trust or any Series from
time to time prior to final disposition thereof, upon receipt of an undertaking
by or on behalf of such Covered Person that such amount will be paid over by him
to the Trust or any Series if it is ultimately determined that he is not
entitled to indemnification under this Section 2; provided, however, that either
(i) such Covered Person shall have provided appropriate security for such
undertaking, or (ii) the Trust shall be insured against losses arising out of
any such advance payments, or (iii) either a majority of the Trustees who are
neither Interested Persons of the Trust nor parties to the matter, or
independent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts (as opposed to a trial-type inquiry or
full investigation), that there is reason to believe that such Covered Person
will be entitled to indemnification under this Section 2.
SHAREHOLDERS
Section 3. No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust property or the
acts, obligations or affairs of the Trust. If any Shareholder, Trustee,
officer, employee, or agent, as such, of the Trust, is made a party to any suit
or proceeding to enforce any such liability, he shall not, on account thereof,
be held to any personal liability. The Trust shall indemnify and hold each
Shareholder harmless
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from and against all claims and liabilities to which such Shareholder may become
subject by reason of his being or having been a Shareholder, and shall reimburse
such Shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The rights accruing to a
Shareholder under this Section 3 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Notwithstanding any other provision of this Trust Agreement to the contrary, no
Trust assets shall be used to indemnify or reimburse any Shareholder of any
Shares of any Series other than Trust assets allocated or belonging to that
Series.
ARTICLE XII
MISCELLANEOUS
TRUST, NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to
bind personally either the Trust's officers or any Shareholder. All persons
extending credit to, contracting with or having any claim against the Trust or
the Trustees, or a particular Series of Shares, shall look only to the assets of
the Trust or the appropriate Series for payment under such credit, contract or
claim; and neither the Shareholders nor the Trustees, nor any of the Trust's
officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Nothing in this Declaration of Trust shall protect
a Trustee against any liability to which the Trustee would otherwise be subject
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<PAGE>
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee
hereunder.
Every note, bond, contract or other undertaking made or issued by the
Trustees or by any officer or officers shall give notice that this Declaration
of Trust is on file with the Secretary of the Commonwealth of Massachusetts and
shall recite that the same was executed or made by or on behalf of the Trust or
by them as Trustee, Trustees, officer, or officers and not individually, and
that the obligations of such note, bond, contract or other undertaking are not
binding upon any of them or the Shareholders individually, but are binding only
upon the assets and property of the Trust, and may contain such further recital
as is deemed appropriate, but the omission thereof shall not operate to bind any
Trustee, officer or Shareholder individually.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing, shall be binding upon all Shareholders, Trustees,
Officers of the Trust and creditors of the Trust. Subject to the provisions of
Section 1 of this Article XII and to Article XI, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
this Declaration of Trust, and subject to the provisions of Section 1 of this
Article XII and to Article XI, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is obtained.
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<PAGE>
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
Section 3. No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the Trustees, or to
see to the application of any payments made or property transferred to the
Trustees, or upon their order.
ESTABLISHMENT OF RECORD DATES
Section 4. The Trustees may close the share transfer books of the
Trust for a period not exceeding 90 days preceding the date of any meeting of
Shareholders, or the date for the payment of any dividends, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect; or in lieu of closing the share transfer books as
aforesaid, the Trustees may fix in advance a date, not exceeding 90 days
preceding the date of any meeting of Shareholders, or the date for payment of
any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of Shares shall go into effect, as a record
date for the determination of the Shareholders entitled to notice of, and to
vote at, any such meeting, or entitled to receive payment of any such dividend,
or to any such allotment of rights, or to exercise the rights in respect of any
such change, conversion or exchange of Shares, and in such case such
Shareholders and only such Shareholders as shall be Shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend, or to receive such allotment or
rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any Shares on the books of the Trust after any such record date
fixed or aforesaid.
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<PAGE>
MERGER, TERMINATION OF TRUST
Section 5.
(a) This Trust shall continue without limitation of time but subject
to the provisions of subsection (b) of this Section 5.
(b) Subject to a Majority Shareholder Vote of each Series affected by
the matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may
(i) merge or consolidate with any other corporation,
association, trust or other organization; or
(ii) sell and convey the assets of the Trust or any individual
Series to another trust, partnership, association or corporation organized under
the laws of any state which is a diversified open-end management investment
company as defined in the 1940 Act, for adequate consideration which shall
include the assumption of all outstanding obligations, taxes and other
liabilities, accrued or contingent, of the Trust or any individual Series, and
which may include shares of beneficial interest or stock of such trust,
partnership, association or corporation; or
(iii) at any time sell and convert into money all of the
assets of the Trust or any individual Series.
Any such consolidation, sale, lease or exchange shall be deemed for
all purposes to have been accomplished under and pursuant to the Statutes of the
Commonwealth of Massachusetts. Nothing contained herein shall be construed as
requiring approval of Shareholders for any sale of assets in the ordinary course
of the business of the Trust.
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Upon making provision for the payment of all such liabilities in
either (ii) or (iii) above, by such assumption or otherwise, the Trustees shall
distribute the remaining proceeds or the remaining assets (as the case may be)
ratably among the holders of the Shares of the Trust or any individual Series
then outstanding.
(c) Upon completion of the distribution of the remaining proceeds or
the remaining assets as provided in subsection (b) above, the Trust or the
individual Series which was conveyed or converted shall terminate and the
Trustees shall be discharged of any and all further liabilities and duties
hereunder as regards the Trust or such Series and the trust created hereby as to
the Trust or such Series shall terminate.
INCORPORATION, REORGANIZATION
Section 6. With the approval of the holders of a majority of
the Shares outstanding and entitled to vote, the Trustees may cause to be
organized or assist in organizing a corporation or corporations under the
laws of any jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization to take over all of the Trust
assets or to carry on any business in which the Trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
assets to any such corporation, trust, partnership, association or
organization in exchange for the shares or securities thereof or otherwise,
and to lend money to, subscribe for the shares or securities of, and enter
into any contracts with any such corporation, trust, partnership, association
or organization in which the Trust holds or is about to acquire shares or any
other interest. Subject to Section 5 hereof, the Trustees may also cause a
merger or consolidation between the Trust or any successor thereto and any
such corporation, trust, partnership, association or other organization if
and to the extent permitted by law. Nothing
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contained in this Section 6 shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust assets to such
organization or entities.
INCORPORATION OR REORGANIZATION OF SERIES
Section 7. With the approval of a Majority Shareholder Vote of any
Series, the Trustees may sell, lease or exchange all of the Trust assets
allocated or belonging to that Series, or cause to be organized or assist in
organizing a corporation or corporations under the laws of any other
jurisdiction, or any other trust, unit investment trust, partnership,
association or other organization, to take over all of the Trust assets
allocated or belonging to that Series and to sell, convey and transfer such
Trust assets to any such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or securities
thereof or otherwise.
FILING OF COPIES, REFERENCES, HEADINGS
Section 8. The original or a copy of this instrument and of each
declaration of trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this instrument
and of each supplemental declaration of trust shall be filed by the Trustees
with the Secretary of the Commonwealth of Massachusetts, as well as any other
governmental office where such filing may be required from time to time. Anyone
dealing with the Trust may rely on a certificate executed by an officer or
Trustee of the Trust as to whether or not any such supplemental declarations of
trust have been made and as to any matters in connection with the Trust
hereunder, with the same effect as if it were the original, and may
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rely, on a copy certified by an officer or Trustee of the Trust, of this
instrument or of any such supplemental declaration of trust. In this instrument
or in any such supplemental declaration of trust, references to this instrument,
and all like expressions such as "herein," "hereof" and "hereunder" shall be
deemed to refer to this instrument as amended or affected by any such
supplemental declaration of trust. Headings are placed herein for convenience
of reference only and in case of any conflict, the text of this instrument,
rather than headings shall control.
APPLICABLE LAW
Section 9. The Trust set forth in this instrument is made in the
Commonwealth of Massachusetts, and it is created under and is to be governed by
and construed and administered according to the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust, and
without limiting the provisions hereof, the Trust may exercise all powers which
are ordinarily exercised by such trusts.
PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS
Section 10. (a) The provisions of this Trust Agreement are
severable, and if the Trustees shall determine, with the advice of counsel, that
any such provision is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code of 1986, as amended, or with
other applicable laws and regulations, the conflicting provision shall be deemed
never to have constituted a part of this Trust Agreement; provided however, that
such determination shall not affect any of the remaining provisions of this
Trust Agreement or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Trust Agreement shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such
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provision in such jurisdiction and shall not in any manner affect such provision
in any other jurisdiction or any other provision of the Trust Agreement in any
jurisdiction.
AMENDMENTS
Section 11. If authorized by vote of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable law
or this Declaration of Trust in any particular case, the Trustees shall amend or
otherwise supplement this instrument, by making a declaration of trust
supplemental hereto, which thereafter shall form a part hereof, except that an
amendment which shall affect the Shareholders of one or more Series shall be
authorized by a Majority Shareholder Vote of the Shares of such Series affected,
and no vote of Shareholders of a Series not affected shall be required. Subject
to applicable law, amendments having the purpose of changing the name of the
Trust or of supplying any omission, curing any ambiguity or curing, correcting
or supplementing any defective or inconsistent provision contained herein shall
not require authorization by Shareholder vote. Copies of any supplemental
declaration of trust shall be filed as specified in Section 8 of this Article
XII.
FISCAL YEAR
Section 12. The fiscal year of the Trust shall end on a date
specified by the Trustees; provided, however, that the Trustees may, without
Shareholder approval, change the fiscal year of the Trust.
REGISTERED AGENT
Section 13. The Registered Agent of the Trust within the
Commonwealth of Massachusetts for service of process, and the principal place of
business of the Trust within the Commonwealth of Massachusetts, shall be CT
Corporation System, 2 Oliver Street, Boston,
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Massachusetts, 02109, or such other agent or place, respectively, as the
Trustees may designate from time to time by any supplement to this Declaration
of Trust without Shareholder approval.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals, for themselves and their assigns, as of the day and year first above
written.
/s/ Harry L. Kavetas
-----------------------------------
Harry L. Kavetas
/s/ Jesse J. Greene, Jr.
-----------------------------------
Jesse J. Greene, Jr.
-----------------------------------
Stephen L. Abbott
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<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals, for themselves and their assigns, as of the day and year first above
written.
-----------------------------------
Harry L. Kavetas
-----------------------------------
Jesse J. Greene, Jr.
/s/ Stephen L. Abbot
-----------------------------------
Stephen L. Abbott
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<PAGE>
STATE OF CONNECTICUT )
: ss.:
COUNTY OF FAIRFIELD )
On the 22ND day of February, 1990, personally appeared before me the
above-named Harry L. Kavetas known to me, who acknowledged that he is a Trustee
of IBM Credit Mutual Funds and that he executed the foregoing instrument of his
free act and deed, pursuant to authority of the Board of Trustees.
/s/ Gloria C. Heller
------------------------------
Notary Public
My commission expires:
May 5, 1994
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<PAGE>
STATE OF CONNECTICUT )
: ss.:
COUNTY OF FAIRFIELD )
On the 22ND day of February, 1990, personally appeared before me the
above-named Jesse J. Greene, Jr. known to me, who acknowledged that he is a
Trustee of IBM Credit Mutual Funds and that he executed the foregoing instrument
of his free act and deed, pursuant to authority of the Board of Trustees.
/s/ Gloria C. Heller
------------------------------
Notary Public
My commission expires:
May 5, 1994
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<PAGE>
COMMONWEALTH OF MASSACHUSETTS )
:
COUNTY OF MIDDLESEX )
On the 22ND day of February, 1990, personally appeared before me the
above-named Stephen L. Abbott known to me, who acknowledged that he is a Trustee
of IBM Credit Mutual Funds and that he executed the foregoing instrument of his
free act and deed, pursuant to Authority of the Board of Trustees.
/s/ Mary Emerson
------------------------------
Notary Public
My commission expires:
September 23, 1994
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<PAGE>
Exhibit (1)(b)
IBM CREDIT MUTUAL FUNDS
CERTIFICATE OF AMENDMENT OF DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of IBM Credit
Mutual Funds (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts, pursuant to the Declaration of Trust dated
February 22, 1990, (the "Declaration"), do hereby certify, as provided in the
provisions of Article XII, Section 11 of the Declaration, duly adopted by
unanimous written consent of the entire Board of Trustees on April 6th, 1990,
that the name of the Trust was changed to:
IBM Mutual Funds
IN WITNESS WHEREOF, the undersigned have executed this Certificate
This 6th day of April, 1990.
/s/ Harry L. Kavetas
-----------------------------------
Harry L. Kavetas
/s/ Jesse J. Greene, Jr.
-----------------------------------
Jesse J. Greene, Jr.
<PAGE>
Exhibit (1)(c)
IBM MUTUAL FUNDS
CERTIFICATE OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting a majority of the Trustees of IBM Mutual
Funds (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts pursuant to the Trust's Declaration of Trust dated
February 22, 1990, as amended on April 6, 1990 (the "Declaration"), do hereby
certify (i) that pursuant to Article XII, Section 11 of the Declaration, the
entire Board of Trustees on March 31, 1994 approved the change of the Trust's
name to Galaxy Fund II, such change to become effective upon the closing of the
transactions relating to the sale of IBM Credit Investment Management
Corporation to Fleet National Bank, and (ii) that such closing occurred on
June 30, 1994.
IN WITNESS WHEREOF, the undersigned have executed this Certificate in
one or more counterparts this 30th day of June, 1994.
/s/ Bradford Morse
----------------------------------------
Bradford Morse
/s/ William J. Schrenk
----------------------------------------
William J. Schrenk
/s/ Robert F. Talbot
----------------------------------------
Robert F. Talbot
<PAGE>
Exhibit (2)
BY-LAWS
OF
GALAXY FUND II
ARTICLE 1
Agreement and Declaration of Trust and Principal Office
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to
the Declaration of Trust dated February 22, 1990, as from time to time in effect
or supplemented (the "Trust Agreement"), of Galaxy Fund II, the Massachusetts
business trust established thereby (the "Trust").
1.2 PRINCIPAL AND REGISTERED OFFICES OF THE TRUST. The registered office
of the Trust shall be located in Boston, Massachusetts. The principal office of
the Trust shall be located in Stamford, Connecticut.
ARTICLE 2
MEETINGS OF TRUSTEES
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any
time and at any place designated in the call of the meeting when called by the
Chairman of the Board of Trustees, the President or the Treasurer or by two or
more Trustees sufficient notice thereof
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being given to each Trustee by the Secretary or an Assistant Secretary or by the
officer or the Trustee calling the meeting.
2.3 NOTICE. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her before or after the meeting, is filed with the
records of the meeting or to any Trustee who attends the meeting without
protesting prior thereto or at its commencement the lack of notice to him or
her. Neither notice of a meeting nor a waiver of a notice need specify the
purposes of the meeting.
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from
time to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.
2.5 PARTICIPATION BY TELEPHONE. One or more of the Trustees or any
committee of the Trustees may participate in a meeting thereof by telephone or
similar communications equipment, allowing all persons participating in the
meeting to hear each other at the same time. Participation by such means shall
constitute presence in person at a meeting.
2.6 CHAIRMAN OF THE BOARD. The Trustees may from time to time designate
one of their number to serve as Chairman of the Board. If a Chairman has been
designated:
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(a) He may call meetings of the Trustees, and shall preside at
meetings of the Trustees. In his absence, a majority of the Trustees who
are present shall select a person to preside.
(b) He or his designee shall preside at meetings of Shareholders.
(c) He shall not be an officer of the Trust for any purpose, and
shall have no executive, operating, or administrative authority with
respect to the Trust. He shall be deemed to be a Trustee of the Trust for
all purposes.
(d) He shall be entitled to receive such compensation, if any, as may
from time to time be fixed by the Trustees, and he shall be reimbursed by
the Trust for all reasonable expenses incurred by him in carrying out his
duties as aforesaid.
(e) He may resign as Chairman at any time by giving written notice to
the Trustees, to the President, or to the Secretary of the Trust. The
acceptance of such notice shall not be necessary to make if effective.
(f) He shall serve at the pleasure of the Trustees.
ARTICLE 3
OFFICERS
3.1 NUMBER. The officers of the Trust shall be chosen by the Trustees and
shall include a President, who shall be a Trustee, a Secretary and a Treasurer.
The Board of Trustees may from time to time elect or appoint one or more Vice
Presidents, Assistant Secretaries and Assistant Treasurers.
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3.2 OTHER OFFICERS. The Trustees from time to time may appoint such other
officers and agents as they shall deem advisable, who shall hold their offices
for such terms and shall exercise such powers and perform such duties as the
Trustees may from time to time prescribe. The Trustees may delegate to one or
more officers or agents the power to appoint any such subordinate officers or
agents and to prescribe the respective rights, terms of office, authorities and
duties.
3.3 ELECTION AND TENURE. The officers of the Trust shall be chosen by the
Trustees. Two or more offices may be held by the same person but no officer
shall execute, acknowledge or verify any instrument in more than one capacity if
such instrument is required by law, the Declaration of Trust or these
Regulations to be executed, acknowledged or verified by two or more officers.
Any officer or agent may be removed by the Trustees. An officer of the Trust
may resign by filing a written resignation with the President or with the
Trustees or with the Secretary. Any vacancy occurring in any office of the
Trust by death, resignation, removal or otherwise may be filled by the Trustees.
3.4 COMPENSATION. The salaries or other compensation of all officers and
agents of the Trust shall be fixed by the Trustees, except that the Trustees may
delegate to any committee the power to fix the salary or other compensation of
any officer of the Trust.
3.5 PRESIDENT. The President shall be the chief executive officer of the
Trust; he shall preside at all meetings of the Trustees and of the Shareholders
unless a Chairman has been designated; he shall be, EX OFFICIO, a member of all
standing committees; and he shall see that all orders and resolutions of the
Trustees are carried into effect. He, or such person as he may designate, shall
sign, execute and acknowledge, in the name of the Trust, deeds, mortgages,
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bonds, contracts and other instruments authorized by the Trustees, except in the
case where the signing and execution thereof shall be delegated by the Trustees
to some other officer or agent of the Trust.
3.6 VICE PRESIDENTS. The Vice Presidents, in the order of their
seniority, shall, in the absence or disability of the President, perform the
duties and exercise the powers of the President, and shall perform such other
duties as the Trustees may from time to time prescribe.
3.7 SECRETARY. The Secretary shall attend all meetings of the Trustees
and of the Shareholders and shall record all the proceedings thereof and shall
perform like duties for any committee when required. He shall give, or cause to
be given, notice of meetings of the Trustees and of the Shareholders, and shall
perform such other duties as may be prescribed by the Trustees or the President,
under whose supervision he shall be. He shall keep in safe custody the seal of
the Trust and, when authorized by the Trustees, affix and attest the same to any
instrument requiring it, provided that, in lieu of affixing the seal of the
Trust to any document, it shall be sufficient to meet the requirements of any
law, rule or regulation relating to a seal to affix the word ("SEAL") adjacent
to the signature of the authorized officer of the Trust. The Trustees may give
general authority to any other officer to affix the seal of the Trust and to
attest the affixing of his signature.
3.8 ASSISTANT. The Assistant Secretaries, in order of their seniority,
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such other duties as the
Trustees may from time to time prescribe.
3.9 TREASURER. The Treasurer shall be the chief financial officer of the
Trust. He shall be responsible for the maintenance of its accounting records
and shall render to the Trustees
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when the Trustees so require an account of all the Trust's financial
transactions and a report of the financial condition of the Trust.
3.10 ASSISTANT TREASURERS. The Assistant Treasurers, in the order of their
seniority, shall, in the absence or disability of the Treasurer, perform the
duties and exercise the powers of the Treasurer and shall perform such other
duties as the Trustees may from time to time prescribe.
ARTICLE 4
COMMITTEES
4.1 GENERAL. The Trustees, by vote of a majority of the Trustees then in
office, may elect from their number an Executive Committee or other committees
and may delegate thereto some or all of their powers except those which by law,
by the Trust Agreement, or by these By-Laws may not be delegated. Except as the
Trustees may otherwise determine, any such committee may make rules for conduct
of its business, but unless otherwise provided by the Trustee or in such rules,
its business shall be conducted so far as possible in the same manner as is
provided by these By-Laws for the Trustees themselves. All members of such
committees shall hold such offices at the pleasure of the Trustees. The Trustee
may abolish any such committee at any time. Records and proceedings of any such
committee shall be maintained in accordance with the Trust Agreement. The
Trustees shall have power to rescind any action of any committee, but no such
rescission shall have retroactive effect.
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ARTICLE 5
REPORTS
5.1 GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Trust Agreement or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE 6
SEAL
6.1 GENERAL. The seal of the Trust shall consist of a flat-faced die with
the word "Massachusetts," together with the name of the Trust and the year of
its organization cut or engraved thereon, but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and its absence shall
not impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 7
EXECUTION OF PAPERS
7.1 GENERAL. Except as the Trustees may generally or in particular cases
authorize the execution of documents in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.
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ARTICLE 8
ISSUANCE OF SHARE CERTIFICATES
8.1 SHARE CERTIFICATES. In lieu of issuing certificates for shares, the
Trustees or the transfer agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
The Trustees may at any time authorize the issuance of share certificates.
In that event, each shareholder shall be entitled to a certificate stating the
number of shares owned by him, in such form as shall be prescribed from time to
time by the Trustees. Such certificates shall be signed by the President or a
Vice President and by the Treasurer or Assistant Treasurer.Such signatures may
be facsimiles of the certificate countersigned by a transfer agent, or by a
registrar, other than a Trustee, officer or employee of the Trust. In case any
officer who has signed or whose facsimile signature has been placed on such
certificate shall cease to be such officer before such certificate is issued, it
may be issued by the Trust with the same effect as if he were such officer at
the time of its issue.
8.2 LOSS OF CERTIFICATES. In case of the alleged loss or destruction or
the mutilation of a share certificate, a duplicate certificate may be issued in
a place thereof, upon such terms and indemnity as the Trustees shall prescribe.
8.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A pledgee of shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificate shall
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express on its face that it is held as collateral security, and the name of the
pledgor shall be stated thereon, who alone shall be considered a shareholder for
all purposes, and entitled to vote thereon.
8.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any
time discontinue the physical issuance of share certificates and may, by written
notice to each shareholder, require the surrender of physical share certificates
to the Trust for cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
ARTICLE 9
CUSTODIAN
9.1 GENERAL. The Trust shall at all times employ a bank or trust company
having capital, surplus and undivided profits of at least Five Hundred Thousand
Dollars ($500,000) as Custodian of the capital assets of the Trust. The
custodian shall be compensated for its services by the Trust and upon such basis
as shall be agreed upon from time to time between the Trust and the Custodian.
ARTICLE 10
DEALINGS WITH TRUSTEES AND OFFICERS
Any Trustee, officer or other agent of the Trust may acquire, own and
dispose of shares of the Trust to the same extent as if he were not a trustee,
officer or agent; and any of the Trustees may accept subscriptions to shares or
repurchase shares from any firm or company in which he is interested.
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ARTICLE 11
SHAREHOLDERS
11.1 MEETINGS. A meeting of the shareholders of the Trust shall be held
whenever called by the Trustees and whenever election of a Trustee or Trustees
by shareholders is required by the provisions of Section 16(a) of the Investment
Company Act of 1940, as amended (the "1940 Act") for that purpose. The Trustees
shall promptly call and give notice of a meeting of shareholders for the purpose
of voting upon removal of any Trustee of the Trust when requested to do so in
writing by shareholders holding not less than 10% of the shares then
outstanding.
11.2 RECORD DATES. For the purpose of determining the shareholders who are
entitled to vote or act at any meeting or any adjournment thereof, or who are
entitled to receive payment of any dividend or of any other distribution, the
Trustees may from time to time fix a time, which shall be not more than 90 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or of any other distribution, as the record date for determining
the shareholders having the right to notice of and to vote at such meeting and
any adjournment thereof or the right to receive such dividend or distribution,
and in such case only shareholders of record on such record date shall have such
right, notwithstanding any transfer of shares on the books of the Trust after
the record date; or without fixing such record date the Trustees may for any
such purpose close the register or transfer books for all or any part of such
period.
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Exhibit (5)
GALAXY FUND II
ADVISORY AGREEMENT
AGREEMENT made as of JUNE 30, 1994 between GALAXY FUND II, a Massachusetts
business trust, located in Stamford, Connecticut ("Galaxy II"), and FLEET
INVESTMENT ADVISORS INC. located in Rochester, New York (the "Adviser").
WHEREAS, Galaxy II 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 II desires to retain the Adviser as investment adviser to
the investment companies listed on Schedule A attached hereto (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 II:
(a) Galaxy II's Declaration of Trust, as filed with the State Secretary of
the Commonwealth of Massachusetts on February 28, 1990 and all
amendments thereto (such 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 II's By-laws and any amendments thereto (such By-laws as
presently in effect and as they shall from time to time be amended, is
herein called the By-laws);
(c) Resolutions of Galaxy's Board of Trustees authorizing the appointment
of the Adviser and approving this Agreement;
(d) Galaxy II's Notification of Registration on Form N-8A under the 1940
Act as filed with the Securities and Exchange Commission ("SEC") on
February 28, 1990 and all amendments thereto;
(e) Galaxy II's Registration Statement on Form N-lA under the Securities
Act of 1933, as amended (the "1933 Act") Registr. No. 33-33617 and
under the 1940 Act as filed with the SEC on February 28, 1990 and all
amendments thereto; and
(f) Galaxy II's most recent prospectus with respect to the Funds (such
prospectus, as presently in effect and all amendments and supplements
thereto herein called a "Prospectus").
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Galaxy II will furnish the Adviser from time to time with execution copies
of all amendments of, or supplements to, the foregoing.
2. SERVICES.
Galaxy II 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 II's Board of Trustees, the Adviser
will employ professional portfolio managers and 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 monitor the correlation of the
performance of each index fund in relation to its index as provided in the
applicable Prospectus and Statement of Additional Information and will provide,
from time to time, information regarding such correlation to the Board of
Trustees of Galaxy II. The Adviser will use a computer model to determine and
monitor the investments for each index fund and the percentage of each such
Fund's assets to be invested in each investment. 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 Statement
of Additional Information and resolutions of Galaxy II'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 an investment adviser and will in addition conduct its
activities under this Agreement in accordance with any applicable
regulations of federal regulatory agencies;
(b) will use the same skill and care in providing such services as it uses
in providing services to other investment companies;
(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 II or other accounts
over which the
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Adviser exercises investment discretion with research advice and other
services. The Adviser is authorized, in fulfilling its obligations
hereunder, to pay to a broker or dealer who provides brokerage and
research services (within the meaning of Section 28(e) of the
Securities Exchange Act of 1934) a commission for executing a
portfolio transaction for any Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Adviser's overall
responsibilities to the particular Fund and to Galaxy II. Except as
permitted by the 1940 Act, the portfolio securities will not be
purchased from or sold to the Adviser, or any affiliated person of
either Galaxy II, or the Adviser, 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 an
affiliate of the Adviser acting as broker;
(d) will maintain all books and records with respect to the securities
transactions for the Funds, keep Galaxy II's books of account with
respect to the Funds and furnish Galaxy II's Board of Trustees with
reports concerning material regulatory or financial developments
affecting the Funds and such other periodic and special reports as the
Board may request with respect to the Funds;
(e) will treat confidentially and as proprietary information of Galaxy II
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 II, which approval shall not be
unreasonably 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 II).
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 1940 Act) of the Adviser from acting as
investment adviser or manager for any other person or persons (a "client"),
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; PROVIDED, HOWEVER, that
investments suitable and appropriate for the Funds will be allocated in
accordance with a formula believed by the Adviser to be equitable to each and
further that the Adviser agrees that it will not undertake any activities which,
in its reasonable judgment, will adversely affect the performance of its
obligations to any Fund under this Agreement.
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5. BOOKS AND RECORDS.
In compliance with the requirements of Rule 3la-3 under the 1940 Act, the
Adviser hereby agrees that all records which it maintains for Galaxy II are the
property of Galaxy II and further agrees to surrender promptly to Galaxy II any
of such records upon Galaxy II's request. The Adviser further agrees to
preserve for the periods prescribed by Rule 3la-2 under the 1940 Act the records
required to be maintained by Rule 3la-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 each
Fund pursuant to this Agreement, Galaxy II will pay the Adviser from the assets
belonging to such Fund and the Adviser will accept as full compensation therefor
fees, computed daily and paid monthly, at an annual rate of 0.10% of the average
daily net assets of each Fund other than the Municipal Bond Fund, and at an
annual rate of 0.25% of the average daily net assets of the Municipal Bond Fund.
For the purpose of determining fees payable to the Adviser, the value of each
Fund's net assets shall be computed at the times and in the manner specified in
the Prospectus and or Statement of Additional Information. Neither the Adviser
nor its affiliates will charge an annual account maintenance fee to defray the
costs of maintaining shareholder accounts for a period of at least two years
from the date of this Agreement to the shareholders of the Galaxy II Large
Company Index Fund, Small Company Index Fund, Utility Index Fund, Municipal Bond
Fund, and U.S. Treasury Index Fund.
If in any fiscal year the aggregate expenses of a Fund (as defined under
the securities regulations of any state having jurisdiction over the Fund)
exceed the expense limitations of any such state, the Adviser will reimburse
Galaxy II for such excess expenses to the extent required by state law in the
same proportion as its advisory fee bears to the Fund's aggregate fees for
investment advice and administration fee. A reduction pursuant to this
paragraph 7, if any, will be estimated and reconciled daily and paid on a
monthly basis.
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 II, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for 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.
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9. DURATION AND TERMINATION.
This Agreement shall become effective upon June 30, 1994 and, if not sooner
terminated, shall continue in effect until June 30, 1996. Thereafter, this
Agreement shall continue in effect with respect to each Fund for successive
twelve month periods ending on June 30, PROVIDED such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of Galaxy II'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 II'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 II'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 any
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 any 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.
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
Massachusetts law.
12. NAMES; MASSACHUSETTS BUSINESS TRUST.
The names "Galaxy Fund II" and "Trustees of Galaxy Fund II" 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 February 22, 1990 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
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and the principal office of the Trust. The obligations of "Galaxy II" entered
into in the name or on behalf thereof by any of the Trustees, nominees,
representatives, agents, officers or employees, whether past, present or future,
are made not individually, but in such capacities, and are not binding upon any
of such individuals or the shareholders personally, but bind only the property
of Galaxy II, and all persons dealing with a Fund must look solely to the
property of Galaxy II belonging to such Fund for the enforcement of any claims
against Galaxy II.
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.
GALAXY FUND II (known as IBM Mutual Funds
until 6-30-94)
By /s/ John J. Shay
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FLEET INVESTMENT ADVISORS INC.
By /s/ Richard H. Jones
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SCHEDULE A
LARGE COMPANY INDEX FUND
SMALL COMPANY INDEX FUND
UTILITY INDEX FUND
U.S. TREASURY INDEX FUND
MUNICIPAL BOND FUND
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Exhibit (8)
MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is effective as of the close of the sale of IBM Credit
Investment Management Corporation to Fleet National Bank pursuant to that
certain Stock Purchase Agreement dated April 1, 1994 between Fleet National Bank
and IBM Credit Corporation, and is among GALAXY FUND II (the "Trust"), an
open-end management investment company organized as a Massachusetts business
trust, on behalf of all of its existing Series and any and all Series it may
create in the future (individually, a "Fund" and collectively, the "Funds"), THE
CHASE MANHATTAN BANK, N.A. (the "Custodian"), a national bank incorporated under
the laws of the United States, and FLEET NATIONAL BANK (the "Administrator").
WITNESSETH
WHEREAS, the Trust is registered as an open-end diversified management
investment company under the Investment Company Act of 1940, as amended (the
1940 Act"); and
WHEREAS, the Trust desires to retain the Custodian to serve as the Trust's
custodian and the Custodian is willing to furnish such services; and
WHEREAS, the Administrator and the Trust have agreed that the Administrator
shall provide certain administrative services to the Trust and shall bear
certain expenses of the Trust's operations, including all amounts payable to the
Custodian under this Agreement.
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NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT.
(a) The Trust hereby appoints the Custodian to act as custodian of its
Property during the period of this Agreement pursuant to the provisions of the
Declaration of Trust and to act as agent to perform certain recordkeeping
functions as may be agreed upon from time to time.
(b) The Custodian accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 20 of this Agreement. The Custodian agrees to comply with all
relevant provisions of the 1940 Act and rules and regulations thereunder
applicable to custodians. The Trust may from time to time issue separate Funds,
classes or classify and reclassify shares of such Funds or classes. Pursuant to
Instructions, the Custodian shall identify to each such Fund or class Property
belonging to such Fund or class and in such reports, confirmations and notices
to the Trust called for under this Agreement shall identify the Fund or class to
which such report, confirmation or notice pertains.
2. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means any of the Trust's officers, and any other person,
whether or not any such person is an officer or employee of the Trust duly
authorized by the Board of Trustees of the Trust to give Oral and Written
Instructions on behalf of the Trust, listed on the certification annexed hereto
as Schedule A or such other certification as may be received by the Custodian
time to time.
(b) "BOOK-ENTRY SYSTEM". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system
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maintained by a clearing agency registered with the Securities and Exchange
Commission (the "SEC") under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) INSTRUCTIONS. The term Instructions shall include either Written or
Oral Instructions.
(d) "OFFICER'S CERTIFICATE". The term "Officer's Certificate" as used
in this Agreement means any notice, instruction or instrument in writing
authorized or required by this Agreement to be given to the Custodian, delivered
by hand, mail, tested telegram, cable, telex or facsimile sending device and
received by the Custodian signed on behalf of the Trust or an Authorized Person.
(e) "ORAL INSTRUCTIONS". As used in this Agreement, the term "Oral
Instructions" means oral instructions actually received by the Custodian from an
Authorized Person with respect to the transaction involved or from a person the
Custodian reasonably believed in good faith to be an Authorized Person with
respect to the transaction involved. The Trust agrees to deliver to the
Custodian, at the time and in the manner specified in Paragraph 8 of this
Agreement, Written Instructions confirming Oral Instructions.
(f) "PROPERTY". The term "Property", as used in this Agreement, means:
(i) any and all securities, cash and other property of the Trust owned
from time to time by the Trust acceptable to Custodian, which the Trust may
from time to time deposit, or cause to be deposited, with the Custodian or
which the Custodian may from time to time hold for the Trust;
(ii) all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the
Funds from time to time;
(iii) all proceeds of the sales of any of such securities or other
property; and
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(iv) all proceeds of the sale of new or treasury Shares issued or sold
by the Trust from time to time, which are received by the Custodian on
behalf of the Trust.
(g) "SECURITIES DEPOSITORY". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company or Participants
Trust Company, each a clearing agency registered with the SEC under Section 17A
of the 1934 Act or, their successor or successors and their nominee or nominees;
and shall also mean any other registered or industry recognized clearing agency
authorized to act as a depository under the 1940 Act, its successor or
successors and nominee or nominees which has been duly approved by the Trust and
named in an Officer's Certificate.
(h) "SHARES". As used in this Agreement, the term "Shares" shall mean
the shares of beneficial interest of the Trust representing interests in the
Funds.
(i) "WRITTEN INSTRUCTIONS". As used in this Agreement, "Written
Instructions" means instructions delivered by hand, mail, tested telegram,
cable, telex, facsimile sending device, and received by the Custodian, signed by
an Authorized Person. Each such writing shall set forth the specific
transaction or type of transaction involved, including a specific statement of
the purpose for which such action is requested. Upon receipt of a certificate
of the Secretary or an Assistant Secretary as to the authorization by the Board
of Trustees of the Trust accompanied by a detailed description of procedures
approved by the Board of Trustees, Written Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Trustees and the Custodian are satisfied that
such procedures afford adequate safeguards for the Funds' assets. Written
Instructions shall include instructions received by the
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Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Paragraph 12.
3. DELIVERY AND REGISTRATION OF THE PROPERTY. The Trust will deliver
or cause to be delivered to the Custodian all securities and all moneys owned by
it at any time during the period of this Agreement, except for securities and
monies to be delivered to any subcustodian appointed pursuant to Paragraph 6
hereof. The Custodian will not be responsible for such securities and such
monies until actually received by it. All securities delivered to the Custodian
or to any such subcustodian (other than in bearer form) shall be registered in
the name of the Fund or in the name of a duly appointed registered nominee of
the Trust on behalf of a Fund or in the name of the Custodian or any duly
appointed registered nominee of the Custodian (with or without indication of
fiduciary status) or in the name of any subcustodian or any nominee of such
subcustodian appointed pursuant to Paragraph 6 hereof or shall be properly
endorsed and in form for transfer satisfactory to the Custodian.
4. DOMESTIC CORPORATE ACTIONS AND PROXIES. With respect to all
securities, however registered, it is understood that the voting and other
rights and powers shall be exercised by the Trust. The Custodian shall transmit
promptly to the Trust any proxy statement, proxy materials, notice of a call or
conversion or similar communications received by it as Custodian for the Trust
as follows:
(a) With respect to domestic U.S. and Canadian securities (the latter
if held in DTC), the Custodian will send to the Trust or the proper
authorized person, such proxies (signed in blank, if issued in the name of
the Custodian's nominee or the nominees of a central depository) and
communications with respect to securities in an Account (as defined in
Paragraph 5) as call for voting or relate to legal proceedings within a
reasonable time
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after sufficient copies are received by the Custodian for forwarding to its
customers. In addition, the Custodian will follow coupon payments,
redemptions, exchanges or similar matters with respect to securities in an
Account and advise the Trust or the proper authorized person for such
Account of rights issued, tender offers or any other discretionary rights
with respect to such securities, in each case, of which the Custodian has
received notice from the issuer of the securities, or as to which notice is
published in publications routinely utilized by the Custodian for this
purpose.
Where warrants, options, tenders or other securities have fixed
expiration dates, the Trust understands that in order for the Custodian to
act, the Custodian must receive the Trust's instructions at its offices in
Brooklyn, addressed as the Custodian may from time to time request, by no
later than noon (NY City time) at least one business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as
the Custodian may reasonably notify the Trust). Absent the Custodian's
timely receipt of such instructions, such instructions will expire without
liability to the Custodian. Corporate reports need not be forwarded to the
Trust.
(b) The Custodian will deliver proxies to the Trust or its designated
agent pursuant to special arrangements which may have been agreed to in
writing. Such proxies shall be executed in the appropriate nominee name
relating to portfolio securities in the Custody Account registered in the
name of such nominee but without indicating the manner in which such
proxies are to be voted; and where bearer securities are involved, proxies
will be delivered in accordance with Instructions.
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5. RECEIPT AND DISBURSEMENT OF MONEY.
(a) The Custodian shall open and maintain a separate custody account or
accounts in the name of each Fund of the Trust (each an "Account"), subject only
to draft or order by the Custodian acting pursuant to the terms of this
Agreement, and shall credit to and hold in such Account or Accounts, subject to
the provisions hereof, all cash received by it from or for each Fund of the
Trust. The Custodian shall make payments of cash to, or for the Account of,
each Fund of the Trust from such cash only upon Instructions (i) for the
purchase of securities for the Trust as provided in Paragraph 13 hereof; (ii)
for the payment of dividends on or other distributions of Shares as set forth in
subparagraph (c) below, or for the payment of any expense or liability incurred
by the Fund, including but not limited to the following payments for the Account
of the Fund: interest, taxes, administration, distribution or advisory fees or
operating expenses with respect to each Fund whether or not such expenses are to
be in whole or part capitalized or treated as deferred expenses; (iii) for
payments in connection with the conversion, exchange or surrender of securities
owned or subscribed to by the Trust and held by or to be delivered to the
Custodian; (iv) to a subcustodian pursuant to Paragraph 6 hereof; (v) for the
redemption or repurchase of Trust Shares; (vi) when securities are called,
redeemed or retired, or otherwise become payable; (vii) upon exercise of
subscription, purchase or other similar rights represented by securities; (viii)
for spot or forward foreign exchange transactions to facilitate security
trading, receipt of income from securities or related transactions; or (ix) for
other proper corporate purposes, BUT ONLY upon receipt of, in addition to
Written Instructions from the Trust on behalf of the Fund, a certified copy of a
resolution of the Board of Trustees or of the Executive Committee of the Trust
signed by an officer of the Trust and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the purpose for
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which such payment is to be made, declaring such purpose to be a proper purpose,
and naming the person or persons to whom such payment is to be made.
(b) The Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as custodian
for the Trust.
(c) Except as specifically stated otherwise in this Agreement, in any
and every case where payment for purchase of securities for the account of a
Fund is made by the Custodian in advance of receipt of the securities purchased
in the absence of specific Written Instructions from the Trust on behalf of such
Fund to so pay in advance, the Custodian shall be liable to the Trust for such
securities to the same extent as if the securities had been received by the
Custodian; provided, however, that the Custodian shall not be liable for such
securities unless the Custodian acted negligently or in bad faith.
(d) From such funds as may be available for the purpose but subject to
any applicable votes of the Board of Trustees of the Trust, the Custodian shall,
upon receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares as directed by the Transfer Agent. In connection
with the redemption or repurchase of Shares of a Fund, the Custodian is
authorized upon receipt of instructions from the Transfer Agent to transmit
funds through the federal wire or ACH system to or through a commercial bank
designated by the redeeming shareholders.
(e) Upon mutual agreement between the Trust on behalf of each
applicable Fund and the Custodian, the Custodian shall, upon the receipt of
Written Instructions from the Trust on behalf of a Fund, make federal funds
available to such Fund as of specified times agreed upon from time to time by
the Trust and the Custodian in the amount of checks received in payment for
Shares of such Fund which are deposited into the Fund's account.
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6. RECEIPT OF SECURITIES.
(a) Except as provided herein and by Paragraph 7 hereof, the Custodian
shall hold and physically segregate in a separate account with respect to each
Fund, identifiable from those of any other person, all securities and non-cash
property received by it for the Trust. All such securities and non-cash
property are to be held or disposed of by the Custodian for each Fund of the
Trust pursuant to the terms of this Agreement. In the absence of Written
Instructions, the Custodian shall have no power or authority to withdraw,
deliver, assign, hypothecate, pledge or otherwise dispose of any such securities
and investments, except in accordance with the express terms provided for in
this Agreement. In no case may any trustee, officer, employee or agent of the
Trust withdraw any securities except as provided in this Agreement and pursuant
to a duly adopted resolution of the Board of Trustees. In connection with its
duties under this Paragraph 6, the Custodian may, at its own expense, except to
the extent the Custodian is instructed by the Trust to engage a subcustodian,
enter into subcustodian agreements with other banks or trust companies for the
receipt of certain securities and cash to be held by the Custodian for the
account of a Fund of the Trust pursuant to this Agreement; provided that each
such bank or trust company has an aggregate capital, surplus and undivided
profits, as shown by its last published report, of not less than one million
dollars ($ 1,000,000) for a Custodian subsidiary or affiliate, or of not less
than twenty million dollars ($20,000,000) for a subcustodian that is not a
Custodian subsidiary or affiliate and that in either case such bank or trust
company agrees with the Custodian to comply with all relevant provisions of the
1940 Act and rules and regulations thereunder applicable to Custodians. The
Custodian will provide the Trust with a copy of each subcustodian agreement it
executes relating to the Trust. The Custodian will be liable for acts or
omissions of any such subcustodian, under the standards of care provided for
herein, except to
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the extent the Custodian is instructed by the Trust to engage a subcustodian and
the Trust is a party to the agreement with such subcustodian.
(b) Promptly after the close of business on each day, the Custodian
shall furnish the Trust with a summary of all transfers to or from the account
of each Fund of the Trust during said day. Where securities are transferred to
the account of any Fund of the Trust established at a Securities Depository or
the Book-Entry System pursuant to Paragraph 7 herein, the Custodian shall also
by book-entry or otherwise identify as belonging to such Fund the quantity of
securities in a fungible bulk of securities registered in the name of the
Custodian (or its nominee) or shown in the Custodian's account on the books of a
Securities Depository or the Book-Entry System. At least monthly and from time
to time, the Custodian shall furnish the Trust with a detailed statement of the
Property held for each Fund under this Agreement.
7. USE OF SECURITIES DEPOSITORY OR THE BOOK-ENTRY SYSTEM. The Trust
shall deliver to the Custodian a certified resolution of the Board of Trustees
of the Trust approving, authorizing and instructing the Custodian on a
continuous and ongoing basis until instructed to the contrary by Instructions
actually received by the Custodian (i) to deposit in a Securities Depository or
the Book-Entry System all securities of the Trust eligible for deposit therein
and (ii) to utilize a Securities Depository or the Book-Entry System to the
extent possible in connection with the performance of its duties hereunder,
including without limitation settlement of purchase and sales of securities by
the Trust, and deliveries and returns of securities loaned, subject to
repurchase agreements or used as collateral in connection with borrowings.
Without limiting the generality of such use, it is agreed that the following
provisions shall apply thereto:
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(a) Securities and any cash of the Trust deposited in a Securities
Depository or the Book-Entry System will at all times be segregated from any
assets and cash controlled by the Custodian in other than a fiduciary or
custodian capacity.
(b) All Books and records maintained by the Custodian that relate to
the Trust participation in a Securities Depository or the Book-Entry System will
at all times during the Custodian's regular business hours be open to the
inspection of the Trust's duly authorized employees or agents, and the Trust's
independent auditors in accordance with applicable regulations, and the Trust
will be furnished with all information in respect of the services rendered to it
as it may require.
(c) The Custodian will provide the Trust with copies of any report
obtained by the Custodian on the system of internal accounting control of the
Securities Depository or Book-Entry System promptly after receipt of such a
report by the Custodian. The Custodian will also provide the Trust with such
reports on its own system of internal control which relate directly to accounts
established hereunder as the Trust may reasonably request from time to time, as
well as the procedures for safeguarding securities deposited in the Book-Entry
System.
(d) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for the benefit of the Fund for any loss
or damage to the Fund resulting from use of the Securities Depository or
Book-Entry System by reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce effectively such rights as
it may have against the Securities Depository or Book-Entry System; at the
election of the Trust, it shall be entitled to be subrogated to the rights of
the Custodian with respect to any claim against the Securities Depository or
Book-Entry System or any other person which the Custodian
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may have as a consequence of any such loss or damage if and to the extent that
the Fund has not been made whole for any such loss or damage.
8. INSTRUCTIONS CONSISTENT WITH THE CHARTER, ETC. Unless otherwise
provided in this Agreement, the Custodian shall act only upon Oral and Written
Instructions. The Custodian may assume that any Instructions received hereunder
are not in any way inconsistent with any provision of the Charter, By-Laws, any
prospectus pursuant to which shares of a Fund are offered for sale, any rule or
regulation of any applicable regulatory body or governmental agency or any vote
or resolution of the Trust's Board of Trustees, or any committee thereof. The
Custodian shall be entitled to rely upon any Instructions actually received by
the Custodian pursuant to this Agreement. The Trust agrees to forward to the
Custodian Written Instructions confirming Oral Instructions in such manner that
the Written Instructions are received by the Custodian at the close of business
on the same day that such Oral Instructions are given to the Custodian. The
Trust agrees that the Custodian shall incur no liability in acting upon
Instructions given to the Custodian hereunder concerning such transactions
provided that the Custodian reasonably believes in good faith that such
Instructions have been given by an Authorized Person. The Trust will hold the
Custodian harmless for the failure of an Authorized Person to send Written
Instructions confirming Oral Instructions or the failure of such confirmation to
conform to the Oral Instructions received. The Custodian may electronically
record any Instructions given by telephone, and any other telephone discussions
with respect to the Trust accounts. The Trust shall be responsible for
safeguarding any testkeys, identification codes or other security devices which
the Custodian shall make available to the Trust or its Authorized Person. In
accord with Instructions from the Trust, as required by accepted industry
practice or as the Custodian may elect in effecting the execution of Trust
Instructions, advances of cash or other Property made by
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the Custodian, arising from the purchase, sale, redemption, transfer or other
disposition of Property of the Trust, or in connection with the disbursement of
funds to any party, or in payment of claims or liabilities owed to the Custodian
by the Trust, or to any other party which has secured judgment in a court of law
against the Trust which creates an ovedraft in the accounts or over-delivery of
Property shall be deemed a loan by the Custodian to the Trust, payable on
demand, bearing interest at such rate customarily charged by the Custodian for
similar loans.
9. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. The Custodian is
authorized to take the following action without Instructions, unless otherwise
instructed to the contrary by Written Instructions:
(a) COLLECTION OF INCOME AND OTHER PAYMENTS. The Custodian shall:
(i) collect and receive for the account of any Fund of the Trust, all
income and other payments and distributions, including (without limitation)
stock dividends, rights, warrants and similar items, included or to be
included in the Property of any Fund of the Trust, and promptly advise the
Trust of such receipt and shall credit such income and other payments and
distributions, as collected, to such Fund of the Trust. From time to time,
the Custodian may elect, but shall not be so obligated, to credit the
account with interest, dividends or principal payments on payable or
contractual settlement date, in anticipation of receiving same from a
payor, central depository, broker or other agent employed by the Trust or
the Custodian. Any such crediting and posting shall be at the Trust's sole
risk, and the Custodian shall be authorized to reverse any such advance
positing in the event it does not receive good funds from any such payor,
central depository, broker or agent;
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(ii) endorse and deposit for collection in the name of the Trust and
each of its Funds, checks, drafts, or other orders for the payment of money
on the same day as received;
(iii) receive and hold for the account of each of the Funds all
securities received by the Trust as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any portfolio securities of the Trust held by the Custodian
hereunder;
(iv) present for payment and collect the amount payable upon all
securities which may mature or be called, redeemed or retired, or otherwise
become payable on the date such securities become payable;
(v) take any action which may be necessary and proper in connection
with the collection and receipt of such income and other payments and the
endorsement for collection of checks, drafts and other negotiable
instructions;
(vi) to effect an exchange of the shares where the par value of stock is
changed, and to surrender securities at maturity or when advised of earlier
call for redemption, in accordance with accepted local industry practice.
When fractional shares of stock of a declaring corporation are received as
a stock distribution, the Custodian shall, unless directed otherwise, sell
the fraction received and credit the Trust's account. Unless specifically
instructed to the contrary in writing, the Custodian is authorized to
exchange securities in bearer form for securities in registered form. If
any Property registered in the name of a nominee of the Custodian is called
for partial redemption by the issuer of such Property, the Custodian is
authorized to allot the called portion to the respective beneficial holders
of the Property in such manner deemed to be fair and equitable by the
Custodian in its sole discretion; and
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(vii) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as otherwise
directed by the Board of Trustees of the Trust.
(b) MISCELLANEOUS TRANSACTIONS. The Custodian is authorized to deliver
or cause to be delivered Property against payment or other consideration or
written receipt therefor in the following cases:
(i) upon the sale of such securities for the Account of the Trust, to
the broker or its clearing agent for examination by a broker in accordance
with local industry practice;
(ii) for the exchange of interim receipts or temporary securities for
definitive securities;
(iii) to the issuer thereof, or its agent, for transfer of securities
into the name of the Trust or the Custodian or a nominee of either, or for
exchange of securities for a different number of bonds, certificates, or
other evidence representing the same aggregate face amount of number of
units; provided that, in any such case, the new securities are to be
delivered to the Custodian.
10. TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Instructions
and not otherwise, the Custodian, directly or through the use of a Securities
Depository or the Book-Entry System, shall:
(a) Deliver any securities upon sale of such securities for the account
of the Fund and receipt of payment therefor, or in accordance with customary
securities processing practices, to deliver such securities to the purchaser
thereof or dealer thereof (including to an agent for any such purchaser or
dealer) against a receipt, with the expectation of collecting payment from the
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dealer, purchaser or agent to whom the securities were so delivered before the
close of business on the same day;
(b) In the case of a sale effected through a Securities Depository or
Book-Entry System, deliver any securities, in accordance with the provisions of
Paragraph 7 hereof;
(c) Deliver any securities to the depository agent in connection with
tender or other similar offers for securities of the Fund;
(d) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
(e) Deliver any securities in connection with any loans of securities
made by the Portfolio, BUT ONLY against receipt of collateral as directed by
Trust on behalf of the Fund, which may be in the form of cash or obligations
issued by the United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to be credited
to the Custodian's account in the Book-Entry System, the Custodian will not be
held liable or responsible for the delivery of securities owned by the Fund
prior to the receipt of such collateral;
(f) Execute and deliver to such persons as may be designated in such
Instructions, proxies, consents, authorizations, and any other instruments
whereby the authority of the Trust as owner of any securities may be exercised;
(g) Deliver any securities held for any Fund of the Trust in exchange
for or upon conversion to other securities or cash issued or paid in connection
with the liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the
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exercise of any conversion privilege, provided, that in any such case, the cash
or other consideration is to be delivered to the Custodian;
(h) Deliver any securities held for any Fund of the Trust to any
protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, against receipt of such certificates or
deposit, interim receipts or other instructions or documents as may be issued to
it to evidence such delivery;
(i) Make such transfers or exchanges of the assets of any Fund of the
Trust and take such other steps as shall be stated in said Instructions to be
for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Trust;
(j) Release securities belonging to any Fund of the Trust to any bank
or trust company for the purpose of pledge or hypothecation to secure any loan
incurred by the Trust, but only against receipt of amounts borrowed;
(k) Deliver any securities held for the Trust upon the exercise of a
call option written by the Trust on such securities;
(l) Release and deliver securities owned by the Trust in connection
with any repurchase agreement entered into on behalf of any Fund of the Trust
upon receipt of payment in connection therefor, and pay out moneys of the Trust
in connection with such repurchase agreements;
(m) Deliver in accordance with the provisions of any agreement among
the Trust, the Custodian and a broker-dealer registered under the 1934 Act and a
member of The National Association of Securities Dealers, Inc. ("NASD") (or any
futures commission merchant
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registered under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Trust (an "Options Clearing Agreement");
(n) Release securities to designated brokers under covered call
options, provided, however, that such securities shall be released only upon
payment to the Bank of monies for the premium due and a receipt for the
securities which are to be held in escrow. Upon exercise of the option, or at
expiration, the Bank will receive from brokers the securities previously
deposited. The Bank will act strictly in accordance with Instructions in the
delivery of securities to be held in escrow and will have no responsibility or
liability for any such securities which are not returned promptly when due other
than to make proper request for such return;
(o) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Trust, deliver any securities to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as directed by the
Transfer Agent;
(p) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to Written Instructions from the Trust on behalf of the applicable
Fund, a certified copy of a resolution of the Board of Trustees or of the
Executive Committee signed by an officer of the Trust and certified by the
Secretary or an Assistant Secretary, specifying the securities of the Fund to be
delivered, setting forth the purpose for which such delivery is to be made,
declaring such purpose to be a proper corporate purpose, and naming the person
or persons to whom delivery of such securities shall be made.
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11. SEGREGATED ACCOUNTS. The Custodian shall upon receipt of
Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of any Fund of the Trust, into which account or
accounts may be transferred cash and/or securities, including securities in the
Book-Entry System (i) for the purposes of compliance by the Trust with the
procedures required by an Options Clearing Agreement, (ii) for purposes of
segregating cash or government securities in connection with options purchased,
sold or written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund
with regulations of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies and (iv)
for other proper corporate purposes, but only, in the case of clause (iv), upon
receipt of, in addition to Written Instructions from the Trust on behalf of the
applicable Fund, a certified copy of a resolution of the Board of Trustees or of
the Executive Committee signed by an officer of the Trust and certified by the
Secretary or an Assistant Secretary, setting forth the purpose or purposes of
such segregated account and declaring such purposes to be proper corporate
purposes.
12. CUSTODIAL AGREEMENTS WITH FCM. The Custodian may enter into
separate custodial agreements among the Trust, the Custodian and any of the
various futures commission merchants ("FCMs") registered under the Commodity
Exchange Act that the Trust uses (each an "FCM Agreement"), pursuant to which
the Trust's margin deposits in any transactions involving futures contracts and
options on futures contracts will be held by Custodian in accounts (each an "FCM
Account") subject to the disposition by the FCM involved in such contracts in
accordance with the customer contract between FCM and the Trust ("FCM
Contract"), SEC rules governing such segregated accounts, Commodity Futures
Trading Commission rules and the rules of the
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applicable commodities exchange. Such FCM Agreements shall only be entered into
upon receipt of Written Instructions from the Trust. Transfers of initial
margin shall be made into an FCM Account only upon Written Instructions;
transfers of premium and variation margin may be made into an FCM Account
pursuant to Oral Instructions. Transfers of funds from an FCM Account to the
FCM for which Custodian holds such an account may only occur upon certification
by the FCM to the Custodian that pursuant to the FCM Agreement and the FCM
Contract, all conditions precedent to its right to give the Custodian such
instruction have been satisfied.
13. PURCHASE OF SECURITIES. Promptly after each purchase of securities
by any Fund, the Trust shall deliver to the Custodian Instructions specifying
with respect to each such purchase: (a) the name of the issuer and the title of
the securities, (b) the number of shares or the principal amount purchased and
accrued interest, if any, (c) the dates of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such purchase, (f)
the name of the person from whom or the broker through whom the purchase was
made, (g) the Fund for which the purchase was made and (h) the cusip number or
other industry standard identification when available. The Custodian shall upon
receipt by the Custodian of securities purchased by or for the Trust registered
in the name of the Fund or the Custodian or its nominee referred to in Section 3
hereof, or otherwise in accord with market practice, pay out of the moneys held
for the account of such Trust the total amount payable to the person from whom
or the broker through whom the purchase was made, provided that the same
conforms to the total amount payable as set forth in such Instructions.
14. SALES OF SECURITIES. Promptly after each sale of securities by the
Trust, the Trust shall deliver to the Custodian Instructions, specifying with
respect to each such sale: (a) the name
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of the issue and the title of the security, (b) the number of shares or
principal amount sold, and accrued interest, if any, (c) the date of sale, (d)
the sale price per unit, (e) the total amount payable to the Trust upon such
sale, (f) the name of the broker through whom or the person to whom the sale was
made, (g) the Fund for which the sale was made and the cusip number or other
industry standard identification when available. The Custodian shall deliver
the securities upon receipt of the total amount payable to the Trust upon such
sale, or otherwise in accord with market practice, provided that the same
conforms to the total amount payable as set forth in such Instructions.
15. REPORTS.
(a) The Custodian shall furnish the Trust the following reports:
(i) such periodic and special reports as the Trust may reasonably
request;
(ii) a monthly statement summarizing all transactions and entries for
the account of each Fund;
(iii) a monthly report of portfolio securities belonging to each Fund
showing the adjusted average cost of each issue and the market value at the
end of such month;
(iv) a monthly report of the cash account of each Fund showing
disbursements; and
(v) such other information as may be agreed upon from time to time
between the Trust and the Custodian.
(b) Unless the information necessary to perform the above functions is
furnished in writing or its electronic equivalent to the Custodian in a timely
manner prior to the next calculation of each Fund's net asset value, the
Custodian shall incur no liability and the Trust shall indemnify and hold the
Custodian harmless from and against any liability arising from any
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discrepancy between the information received by the Custodian and used in such
calculation and any subsequent information received from the Trust.
(c) The Custodian shall assist the Trust's independent auditors, or
upon approval of the Trust or upon demand, any regulatory body, in any requested
review of the Trust's accounts and records maintained by the Custodian but shall
be reimbursed by the Administrator for all expenses and employee time invested
in any such review outside of routine and normal periodic reviews.
(d) Upon receipt from the Trust of the necessary information, the
Custodian shall provide information for tax returns, questionnaires, or periodic
reports to shareholders and such other reports and information requests as the
Trust and the Custodian shall agree upon from time to time.
16. COOPERATION WITH ACCOUNTANTS. The Custodian shall cooperate with
the Trust's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion with respect to audits required each
year in connection with the preparation of the Trust's Form N-1A, and Form N-SAR
or other annual reports to the Securities and Exchange Commission and with
respect to any other requirements of such Commission and will endeavor to
require each sub-custodian appointed pursuant to Paragraph 6 hereof to grant
such access to the information to the Trust's independent certified public
accountant. The Custodian shall require any subcustodian it appoints with
respect to the Trust to comply with the provisions of this Paragraph 16.
17. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS. The Custodian
shall provide the Trust, on behalf of each of the Funds at such times as the
Trust may reasonably
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require, with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including securities
deposited and/or maintained in a Securities Depository and Book-Entry System
relating to the services provided by the Custodian under this Agreement; such
reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
18. CONFIDENTIALITY. The Custodian agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the
Trust all records and other information relative to the Trust and its prior,
present or potential shareholders and relative to the managers and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Custodian
is requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
19. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF TRUST. If the Custodian shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive, from the
Trust clarification or advice, including Instructions.
(b) ADVICE OF COUNSEL. If the Custodian shall be in doubt as to any
question of law involved in any action to be taken or omitted by the Custodian,
it may request and rely upon written advice from counsel of its own choosing
(who may be counsel for the Trust or the Custodian, at the option of the
Custodian).
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<PAGE>
(c) CONFLICTING ADVICE. In case of conflict between directions, advice
or Instructions received by the Custodian pursuant to subparagraph (a) of this
paragraph and advice received by the Custodian pursuant to subparagraph (b) of
this paragraph, the Custodian shall be entitled to rely on and follow the advice
received pursuant to the latter provision alone.
(d) PROTECTION OF THE CUSTODIAN. The Custodian shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions, advice or Instructions received pursuant to subparagraphs (a) or (b)
of this section which the Custodian, after receipt of any such directions,
advice or Instructions, in good faith reasonably believes to be consistent with
such directions, advice or Instructions, as the case may be. Nothing in this
paragraph shall be construed as imposing upon the Custodian any obligation to
seek such directions, advice or Instructions, or to act in accordance with such
directions, advice or Instructions when received, unless, under the terms or
another provision of this Agreement, the same is a condition to the Custodian's
properly taking or omitting to take such action. Nothing in this subparagraph
shall excuse the Custodian when an action or omission on the part of the
Custodian constitutes willful misfeasance, bad faith, negligence or reckless
disregard by the Custodian of its duties under this Agreement.
20. COMPENSATION. The Administrator agrees to pay the Custodian for
its services under this Agreement such amount as may be agreed upon in writing,
together with the Custodian's reasonable out-of-pocket or incidental expenses,
including, but not limited to, legal fees.
21. INDEMNIFICATION. The Trust, as sole owner of the Property, agrees
to indemnify and hold harmless the Custodian and its nominees from all taxes,
charges, expenses, assessments, claims, and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the
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<PAGE>
1934 Act, the 1940 Act, the Commodity Exchange Act and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including (without limitation) attorney's fees and disbursements,
arising directly or indirectly (a) from the fact that securities included in the
Property are registered in the name of any such nominee or (b) without limiting
the generality of the foregoing clause (a) from any action or thing which the
Custodian takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Trust, or (ii) upon
Instructions, PROVIDED, that neither the Custodian nor any of its nominees or
subcustodian shall be indemnified against any liability to any Fund of the Trust
or to its shareholders (or any expenses incident to such liability) arising out
of (a) the Custodian's or such nominee's or subcustodian's own willful
misfeasance, bad faith, negligence or reckless disregard of its duties under
this Agreement or (b) the Custodian's own negligent failure to perform its
duties under this Agreement. In the event of any advance of cash for any
purpose made by the Custodian resulting from Instructions of the Trust, or in
the event that the Custodian or its nominee or subcustodian shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Agreement, except such as may arise from
its or its nominee's or subcustodian's own negligent action, negligent failure
to act, willful misconduct, or reckless disregard, the Trust shall promptly
reimburse the Custodian for such advance of cash or such taxes, charges,
expenses, assessment claims or liabilities. Notwithstanding anything to the
contrary, any one Fund shall not provide indemnification to the Custodian for
any loss or liability resulting from actions with respect to any other Fund.
22. RECORDS. The Custodian shall with respect to each Fund create and
maintain all records relating to its activities and obligations under this
Agreement as agreed upon by the Trust
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<PAGE>
and the Custodian. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents of the Trust and
employees and agents of the Securities and Exchange Commission.
23. RESPONSIBILITY OF THE CUSTODIAN. The Custodian shall be under no
duty to take any action on behalf of the Trust except as specifically set forth
herein or as may be specifically agreed to by the Custodian in writing. In the
performance of its duties hereunder, the Custodian shall be obligated to
exercise reasonable care and diligence and to act in good faith to insure the
accuracy of all services performed under this Agreement. The Custodian shall be
responsible for its own negligent failure or that of any subcustodian it shall
appoint in its own discretion to perform its duties under this Agreement but to
the extent that duties, obligations and responsibilities are not expressly set
forth in this Agreement, the Custodian shall not be liable for any act or
omission which does not constitute willful misfeasance, bad faith, or negligence
on the part of the Custodian or reckless disregard of such duties, obligations
and responsibilities. Without limiting the generality of the foregoing or of
any other provision of this Agreement, the Custodian in connection with its
duties under this Agreement shall not be under any duty or obligation to inquire
into and shall not be liable for or in respect of (a) the validity or invalidity
or authority or lack thereof of any advice, direction, notice or other
instrument which conforms to the applicable requirements of this Agreement, if
any, and which the Custodian reasonably believes in good faith to be genuine,
(b) the validity of the issue of any securities purchased or sold by the Trust,
the legality of the purchase or sale thereof or the propriety of the amount paid
or received therefore, (c) the legality of the issue or sale of any Shares, or
the sufficiency of the amount to be received therefore, and (d) delays or errors
or loss of data occurring by reason of
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<PAGE>
circumstances beyond the Custodian's control, including acts of civil or
military authority, national emergencies, strikes or work stoppages, fire,
mechanical breakdown, flood or catastrophe, acts of God, insurrection, acts of
war or terrorism, rots, revolutions, nuclear fusion, fission or radiation, or
failure of the mail, transportation, communication or power supply. Without
limiting the foregoing, the Custodian shall not be liable for any loss which
results from: (1) the general risk of investing, or (2) investing or holding
Fund assets in a particular country including, but not limited to, losses
resulting from nationalization, expropriation or other governmental actions;
regulation of the banking or securities industry; currency restrictions,
devaluations or fluctuations; and market conditions which prevent the orderly
execution of securities transactions or affect the value of assets.
24. COLLECTION. All collections of monies or other property in respect
of, or which are to become part of the Property (but not the safekeeping thereof
upon receipt by the Custodian) shall be at the sole risk of the Trust. In any
case in which the Custodian does not receive any payment due the Trust within a
reasonable time after the Custodian has made proper demands for the same, it
shall so notify the Trust in writing, including copies of all demand letters,
any written responses thereto, and memoranda of all oral responses thereto, and
to telephonic demands, and await instructions from the Trust. The Custodian
shall not be obliged to take legal action for collection unless and until
reasonably indemnified to its satisfaction. The Custodian shall also notify the
Trust as soon as reasonably practicable whenever income due on securities is not
collected in due course.
25. ADDITIONAL FUNDS. In the event that the Trust establishes one or
more series of Shares in addition to the Large Company Index Fund, the Small
Company Index Fund, the Utility Index Fund and the U.S. Treasury Index Fund with
respect to which it desires to have the
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<PAGE>
Custodian render services as custodian in writing, and if the Custodian agrees
in writing to provide such services, such series of Shares shall become a Fund
hereunder.
26. LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS. A copy
of the Agreement and Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as Trustees
and not individually and that the Obligations of this instrument are not binding
upon any of the Trustees or Shareholders individually but are binding only upon
the assets and property of the Trust.
27. SYSTEM REDUNDANCY. The Custodian shall make reasonable efforts to
maintain telecommunication and computer system redundancy in order to facilitate
resumption of systems operations in the event of a systems failure to the extent
reasonably practicable.
28. DURATION AND TERMINATION. This Agreement shall be effective as of
the date hereof and shall continue until termination by the Trust or by the
Custodian on 60 days' written notice. Upon any termination of this Agreement,
pending appointment of a successor to the Custodian, the Custodian may deliver
cash, securities or other property of the Trust to a bank or trust company of
its own selection (which shall be a person qualified to so act under the 1940
Act), having aggregate capital, surplus and undivided profits, as shown by its
last published report of not less than twenty million dollars ($20,000,000) as a
custodian for the Trust to be held under terms similar to those of this
Agreement, PROVIDED, HOWEVER, that the Custodian shall not be required to make
any such delivery or payment until full payment shall have been made by the
Trust of all liabilities constituting a charge on or against the properties then
held by the Custodian or on or against the Custodian.
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<PAGE>
29. NOTICES. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed
(a) IF TO THE CUSTODIAN
The Chase Manhattan Bank, N.A.
Custodian for the Galaxy Fund II
4 Chase Metrotech Center 18th Fl.
Brooklyn, NY 11245
Attn: Nicholas Leone
Tel. No. (718) 242-3462
Fax No. (718) 242-1374
(b) IF TO THE TRUST
Galaxy Fund 11
c/o 440 Financial Group of Worcester, Inc.
440 Lincoln Street, Box 7
Worcester, MA 01653-1959
Attn: President
Tel. No. (800) 628-0413
Fax No. (508) 853-3317
(c) IF TO ADMINISTRATOR
Fleet National Bank
111 Westminster
Providence, RI 02903
Attn: Thomas N. Howe
Tel. No. (401) 278-5590
Fax No. (401) 621-9887
to, in either case, such other address as shall have been designated in writing
by the other party. Notice shall be deemed to have been given when actually
received by the other party. All postage, cable, telegram, telex and facsimile
sending device charges arising from the sending of a Notice hereunder shall be
paid by the sender.
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<PAGE>
30. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purpose
hereof.
31. AMENDMENTS. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
32. MISCELLANEOUS. This Agreement embodies the entire Agreement and
understanding between the parties hereto; and supersedes all prior agreements
and understandings relating to the subject matter hereof. 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. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. 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. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their officers designated below as of the day and year first
above written.
GALAXY FUND II
By:
--------------------------------
Title
ATTEST:
- --------------------------------
Title
With Respect to Section 19 Only
FLEET NATIONAL BANK
By: /S/ THOMAS N. HOWE
--------------------------------
Title: Senior Vice Pesident
ATTEST:
/S/ MARC C. LESLIE
- --------------------------------
Title
Marc C. Leslie
Assistant Secretary
THE CHASE MANHATTAN BANK, N.A.
By:
--------------------------------
Title
ATTEST:
- --------------------------------
Title
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below as of the day and year first
above written.
GALAXY FUND II
By:
--------------------------------
Title
ATTEST:
- --------------------------------
Title
FLEET NATIONAL BANK
By: /S/ NICHOLAS V. LEONE
--------------------------------
Title: Vice President
ATTEST:
/S/ ALLEN HAMLIN
- --------------------------------
Title
THE CHASE MANHATTAN BANK, N.A.
By:
--------------------------------
Title
Vice-President
ATTEST:
- --------------------------------
Title
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
GALAXY FUND II
By: /S/ JOHN T. O' NEILL
--------------------------------
Title
ATTEST:
/S/ W. BRUCE MCCONNEL, III
- --------------------------------
Title
FLEET NATIONAL BANK
By:
-------------------------------
Title
ATTEST:
- --------------------------------
Title
THE CHASE MANHATTAN BANK, N.A.
By:
-------------------------------
Title
ATTEST:
- --------------------------------
Title
-33-
<PAGE>
Exhibit (9)(a)
ADMINISTRATION AGREEMENT
Fleet National Bank
111 Westminster Street
Providence, Rhode Island 02903
October 25, 1994
Dear Sirs/Mesdames:
This Agreement supersedes the Administration Agreement dated June 30, 1994
between the parties hereto. This Agreement is identical to that Agreement
except that this Agreement correctly sets forth the fees payable hereunder in
Section 2 hereof.
Galaxy Fund II, a Massachusetts business trust ("Galaxy II"), herewith
confirms its agreement with Fleet National Bank ("Fleet") as follows:
Galaxy II desires to employ the capital held in the investment portfolios
listed on Schedule A attached hereto (referred to as the "Funds" or "Fund," as
appropriate) by investing and reinvesting the same in investments of the type
and in accordance with the limitations specified in its Declaration of Trust and
in its Prospectus and Statement of Additional Information with respect to each
Fund as from time to time in effect, copies of which have been or will be
submitted to Fleet, and in resolutions of Galaxy II's Board of Trustees with
respect to each Fund. Galaxy II has appointed Fleet Investment Advisors Inc. as
investment adviser of each Fund and intends to appoint Fleet as administrator of
each Fund.
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<PAGE>
1. SERVICES AS ADMINISTRATOR
Fleet hereby accepts its appointment as Administrator for the Funds, and
agrees to provide services hereunder subject to the direction and supervision of
Galaxy II's Board of Trustees for the fees set forth below.
With respect to each Fund, Fleet agrees to: compute the net asset value of
the Fund's shares and the net income available for dividends in accordance with
Galaxy II's current Prospectuses, the Statements of Additional Information and
the resolutions of the Board of Trustees; furnish statistical and research data,
clerical, accounting and bookkeeping services, and stationery and office
supplies; provide internal auditing and legal services and internal executive
and administrative services; prepare those portions of Galaxy II's semi-annual
reports to the Securities and Exchange Commission on form N-SAR that pertain to
each Fund, and coordinate and file such reports; compile data for and prepare
for execution by Galaxy II those portions of Galaxy II's Federal and state tax
returns and required tax filings that pertain to each Fund and to file such
returns and filings when completed (other than those filings required to be made
by Galaxy II's custodian and transfer agent); prepare filings pursuant to state
securities laws with the advice of Galaxy II's counsel; prepare those portions
of Galaxy II's Annual, Semi-Annual and other reports to shareholders that
pertain to each Fund, and coordinate and file such reports; compile data for and
assist with the preparation and timely filing of notices to the Securities and
Exchange Commission required with respect to the registration of each Fund's
shares pursuant to Rule 24f-2 under the Investment Company Act of 1940 (the
"1940 Act"); assist with the preparation and filing of Galaxy II's Registration
Statement and amendments and supplements thereto and proxy materials for
shareholder meetings with advice of Galaxy II's counsel; arrange
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<PAGE>
for and bear the cost of processing purchase and redemption orders with respect
to each Fund's shares; assist with the development of new or modified investment
products; provide document preparation and review services; provide support
services for Board of Trustees meetings including but not limited to preparation
of materials for review by the Trustees; provide support services for
shareholder meetings; provide compliance review and training services; provide
assistance in connection with examinations by regulatory agencies; keep and
maintain the Funds' financial accounts and records; monitor Galaxy II's
arrangements with respect to services provided by certain institutional
customers, who are the beneficial owners of any Class of Galaxy II's shares of
beneficial interest (including any series or sub-class thereof), pursuant to
agreements between Galaxy II and such institutional customers (herein called
"Servicing Agreements"), including, among other things, reviewing the
qualifications of institutional customers wishing to enter into Servicing
Agreements with Galaxy II, assisting in the execution and delivery of the
Servicing Agreements, reporting to the Board of Trustees with respect to the
amounts paid or payable to Galaxy II from time to time under the Servicing
Agreements and the nature of the services provided to the institutional
customers and maintaining appropriate records in connection with the foregoing
duties; and generally assist in all aspects of the Funds' operations.
Fleet also agrees to maintain office facilities for Galaxy II (which, to
the extent permitted by applicable law, may (but need not) be at the offices of
Fleet or a corporate affiliate and which shall be in such location as Galaxy II
may reasonably determine) and to supervise all aspects of the Funds' operations
except those performed by the Funds' investment adviser under its Advisory
Agreements.
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<PAGE>
In compliance with the requirements of Rule 3la-3 under the 1940 Act, Fleet
hereby agrees that all records which it maintains for Galaxy II are the property
of Galaxy II, and further agrees to surrender promptly to Galaxy II any of such
records upon Galaxy II's request. Fleet further agrees to preserve for the
periods prescribed by Rule 3la-2 under the 1940 Act the records required to be
maintained by Rule 3la-1 under the 1940 Act.
In computing the net asset value of each Fund's shares, Fleet may utilize
one or more independent pricing services approved from time to time by the Board
of Trustees of Galaxy II to obtain securities prices.
2. FEES; EXPENSES; EXPENSE REIMBURSEMENT
In consideration of services provided and expenses assumed with respect to
the Funds, Galaxy II will pay Fleet from the assets of each Fund on the first
business day of each month a fee for the previous month at the annual rate of
0.30% of the value of the average daily net assets of each of the Large Company
Index, Small Company Index, Utility Index and U.S. Treasury Index Funds, and
0.35% of the value of the average daily net assets of the Municipal Bond Fund.
The fee for the period from the day of the month this Agreement is effective
until the end of that month shall be prorated according to the proportion which
such period bears to the full monthly period. Upon any termination of this
Agreement before the end of any month, the fee for such part of a month shall be
pro-rated according to the proportion which such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
For the purpose of determining fees payable to Fleet, the value of the net
assets of the Funds shall be computed in the manner described in Galaxy II's
Registration Statement for the computation of the value of such net assets.
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<PAGE>
Fleet will from time to time employ or associate with itself such person or
persons as Fleet may believe to be particularly fitted to assist it in the
performance of the Agreement, and Fleet may also delegate to other organizations
the performance of any or all of Fleet's obligations hereunder; provided,
however, that in each case Fleet shall be responsible for all compensation
payable to such individuals or organizations. Fleet shall be liable for losses
or failures resulting from the actions or omissions of such agents.
Fleet will bear all expenses in connection with its provision of services
under this Agreement and all expenses incurred in the operation of Galaxy II
with the following exceptions ("Excepted Expenses"); brokerage fees and
commissions, fees and expenses of Trustees who are not officers, directors or
employees of Fleet or of Galaxy IIs principal underwriter or of any
sub-investment adviser to Galaxy II; taxes; interest; and any extraordinary
non-recurring expenses that may arise, including but not limited to expenses of
litigation to which Galaxy II may be a party. The Trust will bear all Excepted
Expenses.
If in any fiscal year of a Fund the aggregate expenses of a Fund (as
defined under the securities regulations of any state having jurisdiction over
such Fund) exceed the expense limitations of any such state, Fleet will
reimburse such Fund for such excess expense. The expense reimbursement
obligation of Fleet is limited to the amount of its fees hereunder for such
fiscal year, PROVIDED, HOWEVER, that notwithstanding the foregoing, Fleet shall
reimburse a Fund for such excess expense regardless of the amount of fees paid
to it during such fiscal year to the extent that the securities regulations of
any state having jurisdiction over the Fund so require. Such expense
reimbursement, if any, will be estimated, reconciled, and paid on a monthly
basis.
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<PAGE>
3. PROPRIETARY AND CONFIDENTIAL INFORMATION
Fleet agrees on behalf of itself and its employees to treat confidentially
and as proprietary information of Galaxy II all records and other information
relative to Galaxy II and prior, present or potential shareholders, and not to
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 II, which approval shall not be unreasonably
withheld and will be deemed granted where Fleet 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
II.
4. STANDARD OF CARE; LIMITATION OF LIABILITY
Fleet shall exercise its best judgment in rendering the services described
herein. Fleet shall not be liable for any error of judgment or mistake of law
or for any loss suffered by Galaxy II in connection with the matters to which
this Agreement relates, except for a loss resulting from willful misfeasance,
bad faith or negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Any person, even though also an officer, partner, employee or agent of Fleet,
who may be or become an officer, trustee, employee or agent of Galaxy II shall
be deemed, when rendering services to Galaxy II or acting on any business of
Galaxy II (other than services or business in connection with Fleet's duties as
administrator hereunder), to be rendering such services to or acting solely for
Galaxy II and not as an officer, partner, employee, or agent or one under the
control or direction of Fleet even though paid by it.
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<PAGE>
5. TERM
This Agreement shall become effective on June 30, 1994 and, unless sooner
terminated as provided herein, shall continue until June 30, 1996 and thereafter
shall continue automatically for successive annual periods ending on June 30 of
each year, provided, such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of Galaxy II's Board of Trustees
who are not interested persons of any party to this Agreement, cast in person at
a meeting called for the purpose of voting on such approval, and (b) by Galaxy
II's Board of Trustees. Notwithstanding the foregoing, this Agreement may be
terminated as to any Fund at any time without the payment of any penalty, by
Galaxy II by the vote of Galaxy II's Board of Trustees, or by Fleet on sixty
days written notice. (As used in this Agreement, the term "interested person"
shall have the same meaning as such term in the 1940 Act.) This Agreement shall
be governed by the laws of the Commonwealth of Massachusetts.
6. NAMES
The names "Galaxy Fund III" and "Trustees of Galaxy Fund III" 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 February 22, 1990 and as amended on April 6, 1990 and June 30, 1994
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 "Galaxy Fund III" entered into in the name or
on behalf thereof by any of the Trustees, representatives, agents, officers or
employees, nominees, whether past, present or future, are made not individually,
but in such capacities, and are not binding upon any of such individuals or the
shareholders personally, but bind only the property of Galaxy II, and all
-7-
<PAGE>
persons dealing with a Fund must look solely to the property of Galaxy II
belonging to such Fund for the enforcement of any claims against Galaxy II.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
GALAXY FUND II
By: /s/ Walter Laliberte
------------------------------------
(Title)
Accepted:
FLEET NATIONAL BANK
By: /s/ Thomas N. Howe
-------------------------------
(Title)
-8-
<PAGE>
SCHEDULE A
Large Company Index Fund
Small Company Index Fund
U.S. Treasury Index Fund
Utility Index Fund
Municipal Bond Fund
-9-
<PAGE>
Exhibit (9)(b)
SUB-ADMINISTRATION AGREEMENT
March 31, 1995
The Shareholder Services Group, Inc., d/b/a 440 Financial
440 Lincoln Street
Worcester, Massachusetts 01605
Dear Sirs/Mesdames:
Fleet National Bank ("Fleet") herewith confirms its agreement with The
Shareholder Services Group, Inc., d/b/a 440 Financial ("440 Financial") as
follows:
Fleet has entered into an Administrative Agreement dated June 30, 1994
(the "Administration Agreement") with Galaxy Fund II, a Massachusetts Business
Trust ("Galaxy II") wherein Fleet agrees to provide certain administration
services to the investment portfolios of Galaxy II listed on Exhibit A attached
hereto (referred to as the "Funds" or "Fund," as appropriate). 440 Financial
Group of Worcester, Inc.("440 Group") currently serves as Sub-administrator for
the Funds pursuant to a Sub-administration Agreement dated as of June 30, 1994.
All of the assets of 440 Group, including but not limited to all rights in and
to the name "440 Financial" are this day being acquired by 440 Financial (the
"Acquisition"). Fleet desires to retain 440 Financial to assist it to provide
administration services to the Funds. 440 Financial agrees to do so in
accordance with the limitations specified in this letter and in Galaxy II's
Declaration of Trust, its Prospectus and Statement of Additional Information
with respect to each fund as from time to time in effect, copies of which have
been or will be submitted to 440 Financial, and resolutions of Galaxy II's Board
of Trustees with respect to each Fund.
<PAGE>
1. SERVICES AS SUB-ADMINISTRATOR
440 Financial hereby accepts its appointment as Sub-Administrator for
the Funds, and agrees to provide services hereunder subject to the direction and
supervision of Fleet.
With respect to each Fund, 440 Financial agrees to: compute the net
asset value of the Fund's shares and net income available for dividends in
accordance with Galaxy II's current Prospectuses, the Statements of Additional
Information and the resolutions of the Board of Trustees; furnish statistical
and research data, clerical, accounting and bookkeeping services, and stationery
and office supplies; provide internal auditing and legal services and internal
executive and administrative services; prepare those portions of Galaxy II's
semi-annual reports on Form N-SAR that pertain to each Fund, and coordinate and
file such reports; compile data for and prepare for execution by Galaxy II those
portions of Galaxy II's Federal and state tax returns and required tax filings
that pertain to each Fund and to file such returns and filings when completed
(other than those filings required to be made by Galaxy II's custodian and
transfer agent); prepare filings pursuant to state securities laws with the
advice of Galaxy II's counsel; prepare those portions of Galaxy II's Annual,
Semi-Annual and other reports to shareholders that pertain to each Fund, and
coordinate and file such reports; compile data for and assist with the
preparation and timely filing of notices to the Securities and Exchange
Commission required with respect to the registration of each Fund's shares
pursuant to Rule 24f-2 under the Investment Company Act of 1940 (the "1940
Act"); assist with the preparation and filing of Galaxy II's Registration
Statement and amendments and supplements thereto and proxy materials for
shareholder meetings with advice of Galaxy II's counsel; arrange for and bear
the cost of processing purchase and redemption orders with respect to each
Fund's shares; assist with
-2-
<PAGE>
the development of new or modified investment products; provide document
preparation and review services; provide support services for Board of Trustees
meetings including but not limited to preparation of materials for review by the
Trustees; provide support services for shareholder meetings; provide compliance
review and training services; provide assistance in connection with examinations
by regulatory agencies; keep and maintain the Funds' financial accounts and
records; monitor Galaxy II's arrangements with respect to services provided by
certain institutional customers, who are the beneficial owners of any class of
Galaxy II's shares of beneficial interest (including any series or sub-class
thereof), pursuant to agreements between Galaxy II and such institutional
customers (herein called "Servicing Agreements"), including among other things,
reviewing the qualifications of institutional customers wishing to enter into
Servicing Agreements with Galaxy II, assisting in the execution and delivery of
the Servicing Agreements, reporting to the Board of Trustees with respect to the
amounts paid or payable to Galaxy II from time to time under the Servicing
Agreements and the nature of the services provided to the institutional
customers and maintaining appropriate records in connection with the foregoing
duties; and generally assist Fleet in all aspects of the Funds' operations.
440 Financial also agrees to maintain office facilities for Galaxy II
(which, to the extent permitted by applicable law, may (but need not) be at the
offices of Fleet or 440 Financial or a corporate affiliate and which shall be in
such location as Galaxy II may reasonably determine) and to supervise all
aspects of the Funds' operations except those performed by Fleet and the Funds'
investment adviser under its Advisory Agreements.
-3-
<PAGE>
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
440 Financial agrees that all records which it maintains for Galaxy II are the
property of Galaxy II, and further agrees to surrender promptly to Galaxy II any
of such records upon Galaxy II's request. 440 Financial 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.
In computing the net asset value of each Fund's shares, 440 Financial
may utilize one or more independent pricing services approved from time to time
by the Board of Trustees of Galaxy II to obtain securities prices.
2. FEES
In consideration of services provided with respect to the Funds, Fleet
will pay 440 Financial such fees as agreed to by Fleet and 440 Financial in
writing from time to time.
440 Financial agrees that if in any fiscal year of a Fund the
aggregate expenses of a Fund (as defined under the securities regulations of any
state having jurisdiction over such fund) exceed the expense limitations of any
such state, 440 Financial will reimburse such Fund for such excess expense. 440
Financial's obligation to reimburse the Fund is limited to its pro rata share of
the fees paid for such fiscal year.
-4-
<PAGE>
Upon any termination of the Agreement before the end of any month, the
fee for such part of a month shall be prorated according to the proportion which
such period bears to the full monthly period and shall be payable upon the date
of termination of the Agreement.
440 Financial agrees that it will not charge or cause the shareholders
of Galaxy II to be charged an annual account maintenance fee for a period of at
least two years from the date of this Agreement.
3. PROPRIETARY AND CONFIDENTIAL INFORMATION
440 Financial agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of Galaxy II and Fleet all records
and other information relative to Galaxy II and prior, present or potential
shareholders, and not to 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 II or Fleet, which
approval shall not be unreasonably withheld and will be deemed granted where 440
Financial 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 II or Fleet.
4. STANDARD OF CARE; LIMITATION OF LIABILITY
440 Financial shall exercise its best judgment in rendering the
services described herein. 440 Financial shall not be liable for any error or
judgment or mistake of law or for any
-5-
<PAGE>
loss suffered by Galaxy II or Fleet in connection with the matters to which this
Agreement relates, except for a loss resulting from willful misfeasance, bad
faith or negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Any person, even though also an officer, partner, employee, or agent of 440
Financial, who may be or become an officer, trustee, employee or agent of Galaxy
II, shall be deemed, when rendering services to Galaxy II or acting on any
business of Galaxy II (other than services or business in connection with 440
Financial's duties as Sub-Administrator hereunder), to be rendering such
services to or acting solely for Galaxy II and not as an officer, partner,
employee, or agent or one under the control or direction of 440 Financial even
though paid by it. Fleet agrees to indemnify and hold harmless 440 Financial
from and against any and all charges, expenses, assessments, claims, demands and
liabilities, including (without limitation) attorneys' fees and disbursements,
arising directly or indirectly from any action or thing which 440 Financial
takes or does or omits to take or do in connection with this Agreement,
provided, however, that 440 Financial shall not be indemnified against any
liability arising out of 440 Financial's negligence, willful misfeasance or bad
faith. 440 Financial agrees to indemnify and hold harmless Fleet from and
against any and all charges, expenses, assessments, claims, demands and
liabilities, including (without limitation) attorneys' fees and disbursements,
arising directly or indirectly from any action or thing which Fleet takes or
does or omits to take or do in connection with this Agreement, provided,
however, that Fleet shall not be indemnified against any liability arising out
of Fleet's negligence, willful misfeasance or bad faith.
-6-
<PAGE>
5. TERM
This Agreement shall become effective on the date of the consummation
of the Acquisition and shall continue thereafter unless terminated as provided
herein.
This Agreement may be terminated as to any Fund at any time without
the payment of any penalty by Fleet, or by 440 Financial, on sixty days' written
notice, and will terminate automatically upon termination of the Administration
Agreement. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
FLEET NATIONAL BANK
By: /s/ Thomas N. Howe
------------------------------------
(Title)
Accepted:
The Shareholder Services Group, Inc.
d/b/a 440 Financial
By: ILLEGIBLE
-------------------------------
(Title)
-7-
<PAGE>
EXHIBIT A
Large Company Index Fund
Small Company Index Fund
U.S. Treasury Index Fund
Utility Index Fund
Municipal Bond Fund
<PAGE>
Exhibit (13)(a)
IBM MUTUAL FUNDS
PURCHASE AGREEMENT
IBM Mutual Funds (the "Trust), a business trust organized under the laws of
The Commonwealth of Massachusetts, and IBM Credit Investment Management
Corporation (the "Manager"), a corporation organized under the laws of the State
of Delaware, hereby agree as follows:
1. The Trust offers the Manager and the Manager hereby purchases 5,000
shares of the investment fund offered by the Trust called the IBM Large Company
Index Fund and 5,000 shares of the investment fund offered by the Trust called
the IBM Small Company Index Fund, in each case having a par value of $.001 per
share (the "Shares") at a price of $10 per Share. The Manager hereby
acknowledges receipt of the Shares and the Trust hereby acknowledges receipt
from the Manager of $100,000 in full payment for the Shares.
2. The Manager represents and warrants to the Trust that the Shares are
being acquired for investment purposes and not with a view to resale or further
distribution.
3. The Manager's right under this Purchase Agreement to purchase the
Shares is not assignable.
4. The Trust represents that a copy of its Declaration of Trust dated
February 22, 1990, as amended from time to time (the "Trust Agreement"), is on
file with the Secretary of The Commonwealth of Massachusetts and with the Boston
City Clerk.
5. The Trust and the Manager agree that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, employees or agents, whether past, present or future, of the Trust,
individually, but are binding only upon the assets and property of the Trust, as
provided in the Trust Agreement. The execution and delivery of this Agreement
have been authorized by the Trustees of the Trust, and signed by an authorized
officer of the Trust, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them or any shareholder of the Trust individually or to
impose any liability on any of them or any shareholder of the Trust personally,
but shall bind only the trust property of the Trust as provided in the Trust
Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 31st day of July, 1990.
IBM MUTUAL FUNDS
By: /s/ HARRY L. KAVETAS
----------------------------------
Harry L. Kavetas
Chairman of the Board
ATTEST:
ILLEGIBLE
- --------------------------
IBM CREDIT INVESTMENT MANAGEMENT CORPORATION
By: /s/ JESSE J. GREENE, JR.
----------------------------------
Jesse J. Greene, Jr.
President
ATTEST:
ROSE WATSON GOODLEY
- --------------------------
-2-
<PAGE>
Exhibit (13)(b)
PURCHASE AGREEMENT
Purchase Agreement dated March 27, 1991 between IBM Mutual Funds, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), and IBM Credit Corporation, a corporation organized under the
laws of Delaware ("IBM Credit").
WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust proposes to issue and sell shares of beneficial
interest, par value $.001 per share (the "Shares"), of its IBM Treasury Bond
Index Fund (the "Fund") to the public pursuant to a Registration Statement on
Form N-1A filed with the Securities and Exchange Commission.
NOW THEREFORE, the Trust and IBM Credit agree as follows:
1. The Trust offers to sell to IBM Credit, and IBM Credit agrees to
purchase from the Trust, one (1) Share of the Fund at a price of
$10.00 per Share (the "Trust Purchased Shares") on the date hereof.
2. IBM Credit represents and warrants to the Trust that IBM Credit is
acquiring the Share of the Fund for investment purposes only and that
the Share will be sold only pursuant to a registration statement under
the Securities Act of 1933, as amended, or an applicable exemption
from those registration requirements.
3. IBM Credit's right under this Purchase Agreement to purchase the Share
is not assignable.
IN WITNESS WHEREOF, the Trust and IBM Credit have caused their duly
authorized officers to execute this Purchase Agreement as of the date first
above written.
IBM MUTUAL FUNDS
By: /s/ Gail G. Cleary
----------------------------------------
Name: Gail G. Cleary
Title: Vice President
IBM CREDIT CORPORATION
By: /s/ Jesse J. Greene
----------------------------------------
Name: Jesse J. Greene, Jr.
Title: Vice President
<PAGE>
Exhibit 13(c)
PURCHASE AGREEMENT
Purchase Agreement dated November 3, 1992 between IBM Mutual Funds, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), and IBM Credit Corporation, a corporation organized under the
laws of Delaware ("IBM Credit").
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust proposes to issue and sell shares of beneficial
interest, par value $.001 per share (the "Shares"), of its IBM Utility Index
Fund (the "Fund") to the public pursuant to a Registration Statement on Form
N-1A filed with the Securities and Exchange Commission.
NOW THEREFORE, the Trust and IBM Credit agree as follows:
1. The Trust offers to sell to IBM Credit, and IBM Credit agrees to
purchase from the Trust, one Share of the Fund at a price of
$10.00 per Share on the date hereof.
2. IBM Credit represents and warrants to the Trust that IBM Credit
is acquiring the Share of the Fund for investment purposes only
and that the Share will be sold only pursuant to a registration
statement under the Securities Act of 1933, as amended, or an
applicable exemption from those registration requirements.
3. IBM Credit's right under this Purchase Agreement to purchase the
Share is not assignable.
IN WITNESS WHEREOF, the Trust and IBM Credit have caused their duly
authorized officers to execute this Purchase Agreement as of the date first
above written.
IBM MUTUAL FUNDS
By: /s/ Gail G. Cleary
---------------------------------
Name: Gail G. Cleary
Title: Vice President
IBM CREDIT CORPORATION
By: /s/ Robert F. Talbot
---------------------------------
Name: Robert F. Talbot
Title: Vice President
<PAGE>
Exhibit (13)(d)
PURCHASE AGREEMENT
Purchase Agreement dated April 5, 1993 between IBM Mutual Funds, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), and IBM Credit Corporation, a corporation organized under the
laws of Delaware ("IBM Credit").
WHEREAS, the Trust is an investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust proposes to issue and sell shares of beneficial
interest, par value $.001 per share (the "Shares"), of its IBM Municipal Bond
Fund (the "Fund") to the public pursuant to a Registration Statement on Form
N-1A filed with the Securities and Exchange Commission.
NOW THEREFORE, the Trust and IBM Credit agree as follows:
1. The Trust offers to sell to IBM Credit, and IBM Credit
agrees to purchase from the Trust, one Share of the Fund at
a price of $10.00 per Share on the date hereof.
2. IBM Credit represents and warrants to the Trust that IBM
Credit is acquiring the Share of the Fund for investment
purposes only and that the Share will be sold only pursuant
to a registration statement under the Securities Act of
1933, as amended, or an applicable exemption from those
registration requirements.
<PAGE>
3. IBM Credit's right under this Purchase Agreement to purchase
the Share is not assignable.
IN WITNESS WHEREOF, the Trust and IBM Credit have caused their
duly authorized officers and to execute this Purchase Agreement as of the
date first above written.
IBM MUTUAL FUNDS
By: /s/ Gail G. Cleary
----------------------------
Name: Gail G. Cleary
Title: Vice President
IBM CREDIT CORPORATION
By: /s/ Robert F. Talbot
----------------------------
Name: Robert F. Talbot
Title: Vice President
-2-
<PAGE>
Exhibit (16)(a)
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
IBM MUTUAL FUNDS
IBM LARGE COMPANY INDEX FUND
1. Average Annual Total Return For The Period October 1, 1991 Through
September 30, 1992.
P(1 + T)^N = ERV
Where: P = initial investment
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
ONE YEAR EXAMPLE:*
P = $1,000.00
T = 10.42%
N = 1
ERV = $1,104.19
LIFE OF FUND EXAMPLE:*
P = $1,000
T = 19.12%
N = 2
ERV = $1,419.03
FIVE YEAR EXAMPLE:*
P =
T =
N =
ERV =
TEN YEAR EXAMPLE:*
P =
T =
N =
ERV =
* Inception date 10/01/90
<PAGE>
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
IBM MUTUAL FUNDS
IBM SMALL COMPANY INDEX FUND
1. Average Annual Total Return For The Period October 1, 1991 Through
September 30, 1992.
P(1 + T)^N = ERV
Where: P = initial investment
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
ONE YEAR EXAMPLE:*
P = $1,000.00
T = 11.66%
N = 1*
ERV = $1,116.56
LIFE OF FUND EXAMPLE:*
P = $1,000
T = 25.88%
N = 2
ERV = $1,584.54
FIVE YEAR EXAMPLE:*
P =
T =
N =
ERV =
TEN YEAR EXAMPLE:*
P =
T =
N =
ERV =
* Inception date 10/01/90
-2-
<PAGE>
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATIONS
IBM MUTUAL FUNDS
IBM U.S. TREASURY INDEX FUND
1. Average Annual Total Return For The Period October 1, 1991 Through
September 30, 1992.
P(1 + T)^N = ERV
Where: P = initial investment
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
ONE YEAR EXAMPLE:*
P = $1,000.00
T = 12.45%
N = 1
ERV = $1,124.52
LIFE OF FUND EXAMPLE:*
P = $1,000
T = 13.70%
N = 1.333
ERV = $1,186.69
FIVE YEAR EXAMPLE:*
P =
T =
N =
ERV =
TEN YEAR EXAMPLE:*
P =
T =
N =
ERV =
* Inception date 06/04/91
-3-
<PAGE>
Exhibit 16(b)
SCHEDULE FOR COMPUTATION OF TOTAL RETURN PERFORMANCE QUOTATIONS
IBM MUTUAL FUNDS
IBM UTILITY INDEX FUND
Average Annual Total Return For The Period January 5, 1993 Through March 31,
1993.
P(1+T)^N = ERV
Where:
P = initial investment
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
LIFE OF FUND EXAMPLE:*
P = $1,000.00
T = 9.85% (Cumulative)
N = 1*
ERV = $1,098.50
P = $1,000.00
T = 45.48% (Annualized)
N = 1*
ERV = $1,098.50
ONE YEAR EXAMPLE:*
P =
T =
N =
ERV =
FIVE YEAR EXAMPLE:*
P =
T =
N =
ERV =
TEN YEAR EXAMPLE:*
P =
T =
N =
ERV =
* Inception date January 5, 1993
<PAGE>
Exhibit 16(c)
SCHEDULE FOR COMPUTATION OF TOTAL RETURN PERFORMANCE QUOTATIONS
IBM MUTUAL FUNDS
IBM MUNICIPAL BOND FUND
Average Annual Total Return For The Period April 15, 1993 Through September 30,
1993.
P(1+T)^N = ERV
Where:
P = initial investment
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
LIFE OF FUND EXAMPLE:*
P = $1,000.00
T = 6.83% (Cumulative)
N = 1*
ERV = $1,068.32
P = $1,000.00
T = 15.34% (Annualized)
N = 1*
ERV = $1,153.40
ONE YEAR EXAMPLE:*
P =
T =
N =
ERV =
FIVE YEAR EXAMPLE:*
P =
T =
N =
ERV =
TEN YEAR EXAMPLE:*
P =
T =
N =
ERV =
* Inception date April 15, 1993
