Exhibit (d)(3)
Columbia Management Advisors, Inc.
One Financial Center
Boston, Massachusetts 02111
Xxxxx X. Xxxx February , 2005
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Interim Chairman of the Board of Trustees
The Galaxy Fund
One Financial Center
Boston, MA 02111
Re: Advisory Fee Waiver and Expense Caps
Dear Mr. Xxxx:
Reference is hereby made to the Advisory Agreement dated as of June 3, 2004
(the "Agreement") between The Galaxy Fund ("Galaxy") and Columbia Management
Advisors, Inc. ("Columbia"). Intending to be legally bound, Columbia hereby
agrees to waive a portion of the advisory fees which it is entitled to receive
pursuant to the Agreement with respect to Galaxy's Prime Reserves, Government
Reserves and Tax-Exempt Reserves (the "Reserve Funds") for the period February
28, 2005 through February 27, 2006 so that the advisory fees for each Reserve
Fund will not exceed 0.20% of each Reserve Fund's average daily net assets.
Xxxxxxxx acknowledges that it will not be entitled to collect on or make a claim
for waived advisory fees at any time in the future.
In addition to and not in limitation of the foregoing, in light of the
completed redemption of assets from the Reserve Funds as a result of actions by
affiliates of Columbia, Columbia hereby agrees to waive fees and/or reimburse
expenses with respect to the Reserve Funds so that the expense ratio for each
Reserve Fund will not exceed the percentage set forth on Exhibit A hereto of
each Reserve Fund's average daily net assets. In addition, Columbia hereby
agrees to waive fees and/or reimburse expenses with respect to all of the Galaxy
funds (other than the Reserve Funds, which will be handled in accordance with
the proceeding sentence) in the following manner: the expense ratio for each
share class of each Galaxy fund will be capped at an amount equal to the expense
ratio that exists on the day before the relevant fund has a significant amount
of assets redeemed out of the fund as a result of actions by a Columbia
affiliate.
Columbia's agreement to waive fees and/or reimburse expenses as set forth
in this agreement may not be modified or terminated without the approval of the
Board of Trustees of Galaxy. Columbia acknowledges that it will not be entitled
to collect on or make a claim for waived fees or reimbursed expenses at any time
in the future.
The names "The Galaxy Fund" and "Trustees of The Galaxy Fund" refer
respectively to the Trust created and the Trustees, as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated March 31, 1986 which is xxxxxx referred to and a copy of which is on
file at the office of the State Secretary of the Commonwealth of Massachusetts
and the principal office of Galaxy. The obligations of "The Galaxy Fund" entered
into the name or on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are not binding
upon any of the Trustees, shareholders,
or representatives of Galaxy personally, but bind only the property of Galaxy,
and all persons dealing with any class of shares of Galaxy must look solely to
the property of Galaxy belonging to such class for the enforcement of any claims
against Galaxy.
COLUMBIA MANAGEMENT ADVISORS, INC.
By:
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Title:
Your signature below acknowledges
your acceptance of the foregoing.
THE GALAXY FUND
By:
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Xxxxx X. Xxxx
Interim Chairman of the Board
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Exhibit A
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Fund Class Expense Cap
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Prime Reserves Reserve 1.02%
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Government Reserves Reserve 1.08%
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Tax-Exempt Reserves Reserve 1.11%
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