0032846.03
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SERVICES AGREEMENT
Gentlemen:
We have an agreement (the "Distribution Agreement") with each of
several open-end investment companies, or series thereof, for which Warburg,
Xxxxxx Counsellors, Inc. ("Counsellors") provides investment advisory services
(together with such other open-end investment companies, or series thereof, for
which Counsellors may provide advisory services in the future, the "Funds").
Pursuant to the Distribution Agreements, we act as the distributor of shares of
common stock of the Funds designated "Common Shares" (collectively, the
"Shares"). You provide recordkeeping and administrative services to certain
employee benefit plans and retirement plans (together, the "Plans") that include
or propose to include certain of the Funds as an investment alternative. The
terms "Prospectus" and "Statement" as used herein refer respectively to the then
current prospectus and statement of additional information relating to the
Shares forming parts of the Registration Statement on Form N-1A of a Fund under
the Securities Act of 1933, as amended (the "1933 Act").
As used herein, unless the context otherwise requires, "we," "ours"
and/or "us" refer to Counsellors Securities Inc. and "you", "your" and "yours"
refer to the company that is the counterparty to this Agreement.
1. Services. As applicable, you agree to provide the administrative,
shareholder and/or other services set forth on Schedule A hereto, as amended
from time to time. In providing such services, you shall not, except as
specifically provided herein, have any authority to act as agent for us or any
Fund, but shall act only as agent of the Plans and the Plan participants who
from time to time beneficially own Shares of one or more Funds and as an
independent contractor and not as an employee or agent of the Funds, Counsellors
or us.
You will maintain all records required by law, including records
detailing the services you provide in return for the fees to which you are
entitled under this Agreement. Such records shall be preserved, maintained and
made available to the extent required and in accordance with the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules thereunder. Upon
request by a Fund or us, you agree to promptly make copies or, if required,
originals of such of these records available to the Fund or us, as the case may
be. You also agree to promptly notify the Fund or us if you experience any
difficulty in maintaining the records described in the foregoing in an accurate
and complete manner. This provision shall survive the termination of this
Agreement.
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You agree to furnish the Funds, Counsellors and us with such
information as we may reasonably request (including, without limitation,
periodic certifications confirming the provision to Plans and Plan participants
of the services described herein). Moreover, you agree to provide to the Funds,
Counsellors and us access to you and your personnel at our reasonable request
during normal business hours to confirm compliance with the provisions of this
Agreement and applicable law. In performing services hereunder, you agree that
you will not engage in any activities set forth in Schedule B.
You shall take all steps necessary to ensure that the arrangements
provided for in this Agreement are properly disclosed to the Plans. You agree to
inform Plans and Plan participants that they are transacting business with you
and not with us, Counsellors or the Funds, and that they and Plan participants
may look only to you for resolution of problems or discrepancies in their
accounts or between those accounts and your omnibus accounts (the "Accounts") at
the Funds. You and your employees will, upon request, be available during normal
business hours to consult with the Funds, Counsellors and us or our designees
concerning the performance of your responsibilities under this Agreement.
In no way shall the provisions of this Agreement limit the authority of
any Fund or us to take such action as such entity may deem appropriate or
advisable in respect of all matters pertaining to the continuous offering of
Shares. We have full authority to take such action as we may deem advisable in
respect of all matters pertaining to the continuous offering of Shares. We
reserve the right in our sole discretion and without notice to you to suspend
sales or withdraw the offering of Shares. To the extent reasonably practicable,
we or the relevant Fund will provide you with notice of any such suspension or
withdrawal and you will use your best efforts to cause compliance with any such
notice.
You shall maintain at all times general liability and other insurance
coverage, including errors and omissions coverage, that is reasonable and
customary in light of your duties hereunder, with limits of not less than $5
million. Such insurance coverage shall be issued by a qualified insurance
carrier with a Best's rating of at least "A" or with the highest rating of a
nationally recognized statistical rating organization.
We may enter into other similar agreements with any other person or
persons without your consent.
2. Orders for Shares. Orders received from you for Shares of a Fund
will be accepted by us only at the public offering price applicable to each
order, as set forth in the relevant Prospectus and Statement. All orders by you
for a Fund's Shares will be held through the Accounts with the Fund; and you
agree to make available on a monthly basis to the Funds records necessary to
determine the number of Plans and Plan participants in each Account (indicating
the number of new accounts opened during the month, as well as the number of
ongoing accounts) and the times of receipt of Plan participant orders. You agree
to use your best efforts to assist us in identifying "market timers" or
investors who engage in a pattern of short-term trading.
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On each day on which a Fund calculates its net asset value (a "Business
Day"), you shall aggregate and calculate the net purchase and redemption orders
for each Account maintained by the Fund in which Plan participant assets are
invested. Net orders shall only reflect Plan participant orders that you have
received prior to the close of regular trading on the New York Stock Exchange,
Inc. (the "NYSE") (currently 4:00 p.m., Eastern time) on that Business Day.
Orders that you have received after the close of regular trading on the NYSE
shall be treated as though received on the next Business Day. Each communication
of orders by you shall constitute a representation that such orders were
received by you prior to the close of regular trading on the NYSE on the
Business Day on which the purchase or redemption order is priced in accordance
with Rule 22c-1 under the 1940 Act. Other procedures relating to the handling of
orders shall be in accordance with the Prospectus and Statement of the relevant
Fund or with oral or written instructions that we or the relevant Fund shall
forward to you from time to time.
Subject to the terms and conditions of this Agreement and the
procedures referred to above, you shall be appointed to act, and you by
indicating next to your signature below have agreed to act as agent of each Fund
for the purpose specifically set forth in this paragraph. Provided that you
comply with the foregoing, you shall be deemed to be an agent of each Fund to
the extent orders refer to such Fund for the sole purpose of receiving
instructions from yourself as Plan agent for the purchase and redemption of
Shares prior to the close of regular trading each Business Day and communicating
orders based on such instructions to the Fund's transfer agent, all as specified
herein, and the Business Day on which you receive such instructions prior to the
close of regular trading on the NYSE shall be the Business Day on which such
orders will be deemed to be received by us or the Fund's transfer agent as a
result of such instructions.
Dividends and capital gains distributions will be automatically
reinvested at net asset value in accordance with each Fund's prospectus.
Payment for Shares of a Fund ordered from us must be received together
with your order unless we agree otherwise. All orders are subject to acceptance
or rejection by us or the relevant Fund in the sole discretion of either, or by
the relevant Fund's transfer agent acting on our behalf, and orders shall be
effective only upon receipt in proper form. The Funds may, if necessary, delay
redemption of Shares to the extent permitted by the 1940 Act.
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3. Fees. For the services and facilities provided by you hereunder, we
agree to pay you beginning on the effective date indicated next to our signature
below an amount calculated at the rate and in the manner set forth in Schedule
C, as amended from time to time. We will provide you, at least monthly, a
written report detailing amounts so calculated with respect to each Fund.
You agree that during the term of this Agreement, you will not assess
against or collect from Plans or Plan participants any transaction fee upon the
purchase or redemption of any Fund's Shares that are considered in calculating
the fee due pursuant to this Agreement.
4. Counsellors Securities' Responsibilities; Limitation of Liability
for Claims. Any printed information that we furnish to you other than the
Prospectus, the Statement, information supplemental to the Prospectus and the
Statement, periodic reports and proxy solicitation materials are our sole
responsibility, and not the responsibility of any Fund, and you agree that the
Funds, the shareholders of the Funds and the officers and governing Boards of
the Funds shall have no liability or responsibility to you in these respects.
You also agree that the payment of compensation to you under this Agreement is,
except as set forth in Schedule C hereto, solely our responsibility and not that
of any Fund, and you agree that the Funds, the shareholders of the Funds and the
officers and governing Boards of the Funds shall have no liability or
responsibility to you with respect to any indebtedness, liability or obligation
hereunder. Further, it is understood, in the case of each Fund that is organized
as a Massachusetts business trust or series thereof, that the declarations of
trust for each trust refers to the trustees collectively as trustees and not as
individuals personally, and that the declaration of trust provides that no
shareholder, trustee, officer, employee or agent of the trust shall be subject
to claims against or obligations of the trust to any extent whatsoever, but that
the trust estate only shall be liable. No Fund shall be liable for the
obligations or liabilities of any other Fund. No series of any Fund, if any,
shall be liable for obligations of any other series.
5. Pricing Errors. In the event adjustments are required to correct any
error in the computation of the net asset value of a Fund's Shares, the Fund or
we shall notify you as soon as practicable after discovering the need for those
adjustments that result in an aggregate reimbursement of $150 or more to the
Accounts maintained by the Fund for Plan participants. Any such notice shall
state for each day for which an error occurred the incorrect price, the correct
price and, to the extent communicated to the Fund's shareholders, the reason for
the price change. You may send this notice or a derivation thereof (so long as
such derivation is approved in advance by Counsellors) to Plan participants and
Customers whose accounts are affected by the price change.
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If the Accounts maintained by the Fund for Plan participants received
amounts in excess of the amounts to which it otherwise would have entitled prior
to an adjustment for an error, you, at our request, will make a good faith
attempt to collect such excess amounts from Plan participants. In no event,
however, shall you be liable to the Funds or us for any such amounts.
If an adjustment is to be made in accordance with the first paragraph
of this section 5, the relevant Fund shall make all necessary adjustments
(within the parameters specified in that first paragraph) to the number of
Shares owned in the Accounts and distribute to you the amount of such
underpayment for credit to Plan participants' accounts.
6. Termination; Assignment. This Agreement shall be terminable without
penalty upon 30 days' written notice to us by you and upon 30 days' written
notice to you by us; provided, however, that any termination of this Agreement
shall not affect any unpaid obligations under this Agreement and you shall be
entitled to receive all fees earned up to and including the effective date of
termination.
This Agreement shall not be assignable by either us or you without the
prior written consent of the Funds. Nothing in this Agreement is intended to
confer upon any person other than the Funds and the parties hereto and their
permitted assigns and successors any rights or remedies under or by reason of
this Agreement.
7. Publicity. CSI will provide you on a timely basis with investment
performance information for each Fund, including total return for the preceding
calendar month and calendar quarter, the calendar year to date, and the prior
one-year, five-year, and ten-year (or life of the Fund) periods. You may, based
on the Securities and Exchange Commission-mandated information supplied by CSI,
prepare communications for Plan participants ("Participant Materials"). You
shall provide copies of all Participant Materials to CSI concurrently with their
first use for CSI's internal recordkeeping purposes. It is understood that
neither CSI nor any Fund shall be responsible for errors or omissions in, or the
content of, Participant Materials.
8. Standard of Care; Indemnification. In carrying out your and our
obligations under this Agreement, you and we each agree to act in good faith
and without negligence.
You agree to and do release, indemnify and hold each Fund, its
investment adviser and their and our respective officers, trustees, directors
and controlling persons harmless from and against any and all direct or indirect
claims, liabilities, expenses or losses resulting from requests, directions,
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actions or inactions of or by you or your officers, employees or agents
regarding your responsibilities hereunder. Without limiting the generality of
the foregoing, you agree that this provision will apply to claims, liabilities,
expenses or losses arising out of (a) your making any statement or
representation concerning the Shares that is not contained in the relevant
Prospectus or Statement or in such printed material issued by us or a Fund as
information supplemental to the Prospectus and Statement (including, without
limitation, any statement, representation or omission contained in Participant
Materials) and (b) a sale of Shares in any state or jurisdiction in which such
Shares are not qualified for sale or exempt from the requirements of the
relevant securities laws or in which you are not properly licensed or authorized
to make offers or sales. The Funds and CSI, in each case solely to the extent
relating to such party's responsibilities hereunder, agree to and do release,
indemnify and hold you and your officers, directors and controlling persons
harmless from and against any and all direct or indirect claims, liabilities,
expenses or losses resulting from requests, directions, actions or inactions of
or by us, any Fund or our respective officers, employees or agents.
This provision shall survive the termination of this Agreement.
9. Representations and Warranties. Each party hereby represents and
warrants to the other that it is duly authorized by all necessary action,
approval or authorization to enter into this Agreement and that it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized.
You further represent, warrant and agree that:
(i) you are fully authorized by applicable law and
regulation and by any agreement you may have with any Plan, Customer or
client for whom you may act pursuant to this Agreement to perform the
services and receive the compensation therefor described in this
Agreement;
(ii) in performing the services described in this
Agreement, you will comply with all applicable laws, rules and
regulations;
(iii) if you are not duly registered as a
broker-dealer under Section 15 of the Securities Exchange Act of
1934, as amended (the "1934 Act") and applicable state securities
laws and regulations, you are not required to be so registered and
will not be required to be so registered in order to perform this
Agreement;
(iv) neither you nor any of your "affiliates" (as
such term is defined in 29 C.F.R. Section 2510.3-21(e)) is a
"fiduciary" of any Plan as such term is defined in section 3(21) of the
Employment Retirement Income Security Act of 1974, as amended
("ERISA"), and section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code");
(v) the receipt of fees hereunder will not constitute
a "prohibited transaction" as such term is defined in section 406 of
ERISA and section 4975 of the Code; and
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(vi) you are duly registered as a transfer agent
under Section 17A of the 1934 Act and applicable state securities laws
and regulations, and such registrations shall continue to be in full
force and effect throughout the term of this Agreement.
10. Governing Law; Complete Agreement. This Agreement shall be
governed by and construed in accordance with the laws (except the conflict
of law rules) of the State of New York.
This Agreement contains the full and complete understanding of the
parties and supersedes all prior representations, promises, statements,
arrangements, agreements, warranties and understandings between the parties
with respect to the subject matter hereof, whether oral or written, express
or implied.
11. Amendment. This Agreement, including the Schedules thereto,
may be modified or amended and the terms of this Agreement may be waived only
by writings signed by each of the parties.
12. Notices. All notices and communications shall be mailed or
telecopied to you to the address set forth below and to us at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx (Fax No.:
000-000-0000), or in any case to such other address as a party may request by
giving written notice to the other.
COUNSELLORS SECURITIES INC.
Date:_____________ __, 1995 By:________________________________
Name:
Title:
Effective Date: _________, 1995
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WARBURG, XXXXXX INTERMEDIATE
MATURITY GOVERNMENT FUND
WARBURG, XXXXXX INTERMEDIATE MUNICIPAL
FUND
WARBURG, XXXXXX FIXED INCOME FUND
WARBURG, XXXXXX GLOBAL FIXED INCOME FUND
WARBURG, XXXXXX CAPITAL APPRECIATION FUND
WARBURG, XXXXXX INTERNATIONAL EQUITY FUND
WARBURG, XXXXXX EMERGING GROWTH FUND
WARBURG, XXXXXX EMERGING MARKETS FUND
WARBURG, XXXXXX JAPAN OTC FUND
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WARBURG, XXXXXX SHORT-TERM TAX-ADVANTAGED
BOND FUND
WARBURG, XXXXXX POST-VENTURE CAPITAL FUND
By: __________________________________
Name:
Title:
By: __________________________________
Name:
Title:
WARBURG, XXXXXX BALANCED FUND
WARBURG, XXXXXX GROWTH & INCOME FUND
By: ___________________________________
Name:
Title:
Please indicate your confirmation and acceptance of this Agreement as
of the date written above by signing below and returning one copy of this
Agreement to Counsellors Securities Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxxx X. Xxxxx.
Accepted and Agreed:
TOWERS XXXXXX
By:__________________________
Name (Print):___________________________
Title:_______________________________
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Address: Centre Square East
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
INDICATE INTENTION TO ACT AS AGENT
AS SET FORTH IN THIS AGREEMENT:
We agree to act as agent for the sole purpose of and to the extent set forth
in paragraph 2 of this Agreement. Yes ____ No ____
A-1
Capitalized terms used herein and not otherwise defined shall
have the meaning set forth in the body of the Services Agreement.
SCHEDULE A
Administrative Services
(i) receiving from the Plans and Plan participants, by the close of
regular trading on the New York Stock Exchange (currently 4:00 p.m., Eastern
time) on any business day (i.e., a day on which the New York Stock Exchange is
open for trading), instructions for the purchase and redemption of shares;
aggregating and processing purchase and redemption requests for Shares from Plan
participants and Customers and placing net purchase and redemption orders with
CSI or its designee; payment for net purchase orders must be received at the
time the order is placed; communicating orders in a timely manner to CSI or its
designee and promptly delivering, or instructing the Plans to deliver,
appropriate documentation to CSI or its designee;
(ii) providing Plan participants with a service that invests the
assets of their accounts in Shares;
(iii) providing information periodically to Plans and Plan
participants showing their positions in Shares;
(iv) arranging for bank wires;
(v) providing sub-accounting with respect to Shares
beneficially owned by Plans and Plan participants;
(vi) if required by law, forwarding shareholder communications
from the relevant Fund (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution and tax notices)
to Plans and Plan participants at your expense, with such material to be
provided to you by CSI to the extent reasonably practicable upon ten Business
Days' notice;
(vii) withholding taxes on non-resident alien accounts and
otherwise as appropriate;
A-2
(viii) maintaining records of dividends and distributions; and
disbursing dividends and distributions and reinvesting such in the relevant
Fund for Plans and Plan participants;
(ix) preparing and delivering to Plans, Plan participants and
state and federal regulatory authorities, including the U.S. Internal Revenue
Service, such information respecting dividends and distributions paid by the
relevant Fund as may be required by law;
(x) maintaining adequate records for each Plan reflecting Shares
purchased and redeemed, including dates and prices for all transactions, and
Share balances;
(xi) preparing and delivering to Plan participants periodic
account statements on a quarterly basis showing the total dollar amount
(contract value) of Shares held as of the statement closing date;
(xii) on behalf of and to the extent instructed by each Plan, at
your expense deliver to Plan participants (or deliver to the Plans for
distribution to Plan participants) and Customers prospectuses, statements of
additional information and other materials provided to you by CSI to the
extent reasonably practicable upon ten Business Days' notice;
(xiii) maintain quarterly purchase summaries (expressed in dollar
amounts) for each Plan;
(xiv) settle orders in accordance with the terms of the
Prospectus and Statement of the Funds; and
(xv) transmit to us, or to the Funds if so instructed by us, such
occasional and periodic reports as we shall reasonably request from time to
time to enable us or the Funds to comply with applicable laws and
regulations.
A-3
Shareholder Services
(i) responding to Plans, Plan participant and Customer
inquiries;
(ii) providing information on Plan, Plan participant and
Customer investments;
(iii) providing other shareholder liaison services;
(iv) providing office space and equipment, telephone facilities
and personnel (which may be any part of the space, equipment and facilities
currently used in your business, or any personnel employed by you) as may be
reasonably necessary or beneficial in order to provide services to Plans and
Customers under this Agreement;
(v) send confirmations of orders to the Plans and Plan
participants and Customers as required by Rule 10b-10 of the Securities
Exchange Act of 1934 (the "1934 Act") and paying any costs in connection
therewith;
(vi) using all reasonable efforts to ensure that taxpayer
identification numbers provided by you on behalf of the Plans, Plan
participants and Customers are correct; and
(vii) providing the Plans, Plan participants and Customers a
confirming Prospectus following an acquisition of Shares to the extent
required by law.
Other Services
(i) providing all other services as may be incidental to the
Administrative Services and Shareholder Services enumerated above;
(ii) providing such other services as may be normal or customary
for service providers performing substantially similar services; and
(iii) providing such other services as may be mutually agreed by
the parties to the extent permitted under applicable statutes, rules and
regulations.
B-1
SCHEDULE B
Prohibited Activities
(i) You shall not withhold placing orders for the Shares received
from Plan participants and Customers so as to profit yourself as a result of
such withholding.
(ii) You shall not place orders for Shares unless you have already
received purchase orders for Shares at the applicable public offering price
and subject to the terms hereof.
(iii) You agree that you will not offer or sell any Shares except
under circumstances that will result in compliance with applicable federal
and state securities laws and that in connection with sales and offers to
sell Shares you will furnish to each person to whom any such sale or offer is
made, at or prior to the time of offering or sale, a copy of the relevant
Prospectus and, if requested, the corresponding Statement (each as then
amended or supplemented) and will not furnish to any person any information
relating to a Fund that is inconsistent in any respect with the information
contained in the Prospectus and Statement (each as then amended or
supplemented).
(iv) You shall not make any representations concerning the Shares
except those contained in the relevant Prospectus and Statement and in such
printed information subsequently issued by us or a Fund as information
supplemental to the Prospectus and Statement.
C-1
SCHEDULE C
Total Annual Fee as % of Average
Net Assets of Plan Participants
held in the Account:
Name of Fund
-------------------------- ---------------------- ---------------------
Warburg Pincus
New York Intermediate Bond .15
Intermediate Maturity .15
Government
Short-Term Tax-Advantaged .15
Bond .15
Fixed Income .15
Global Fixed Income .15
Growth & Income .20
International Equity .20
Emerging Growth .20
Capital Appreciation .00
Xxxxx OTC .20
Balanced Fund .20
Emerging Markets .20
Post-Venture Capital .20
CSI or another of the Funds' designees shall pay the Fee to you, and
shall be reimbursed by each Fund for a portion of the Fee due with respect to
that Fund to be determined from time to time ("Fund Portion"). The difference
between the Fee due minus the Fund Portion shall not be reimbursed by the
Funds, but shall be borne by CSI or another of the Funds' designees.
These fees will be computed by CSI and paid monthly. For purposes of
determining the fees payable hereunder, the average net assets of the Plan
Pareticipants' Shares will be computed in the manner specified in the
relevant Fund's registration statement (as the same is in effect from time to
C-2
time) in connection with the computation of the net asset value of Shares for
purposes of purchases and redemptions.
In computing your fee, one-twelfth of the applicable fee rate set
forth above shall be applied to the average aggregate monthly net asset value
of shares of the applicable Funds in accounts for which you provide services
for the month in question. Each month's fee shall be determined independently
of every other month's fee. For the month in which this Agreement becomes
effective or terminates, there shall be an appropriate proration on the basis
of the number of days that the Agreement is in effect during the month. In
addition, if in any period the aggregate amount payable to you is less than
$200, we may, in our discretion, defer the payment of such amount until it,
together with a subsequent payment or payments, exceeds $200.
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WARBURG PINCUS ADVISOR FUNDS SERVICES AGREEMENT
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned open-end management investment company, or series
thereof (the "Fund"), has agreed that ________ (the "Service Organization")
shall provide certain distribution services in connection with the offer and
sale of shares of the Fund's common stock or beneficial interest, as the case
may be, par value $.001 per share, designated Series 2 Shares ("Advisor
Shares"), as well as certain shareholder servicing, administrative and
accounting services to certain of its customers who from time to time may
beneficially own Advisor Shares. The Fund acknowledges that Advisor Shares may
be sold by the Service Organization directly to [investors or/certain employee
benefit and retirement plans ("Plans") that include or propose to include the
Fund as an investment alternative or/a separate account of _______________
Insurance Company (each, a "Separate Account"), which will issue group annuity
contracts to qualified pension or profit-sharing plans ("Plans"), such investors
and separate accounts being referred to herein by the term "Customers"]. The
terms "Prospectus" and "Statement" as used herein refer respectively to the then
current prospectus and statement of additional information relating to the
Advisor Shares forming parts of the Registration Statement on Form N-1A of a
Fund under the Securities Act of 1933, as amended (the "1933 Act").
1. Services. Service Organization agrees to provide the distribution
and marketing, administrative, shareholder and/or other services set forth on
Schedule A hereto, as amended from time to time. In providing such services,
Service Organization shall not, except as specifically provided herein, have any
authority to act as agent for any Fund, but shall act only as agent of the
Plans, the Plan participants and Customers who from time to time beneficially
own Advisor Shares and as an independent contractor and not as an employee or
agent of the Fund, Warburg, Xxxxxx Counsellors, Inc. ("Counsellors"), the
investment adviser to the Fund, or Counsellors Securities Inc. ("CSI"), the
distributor of the Advisor Shares.
Service Organization will maintain all records required by law,
including records detailing the services it provides in return for the fees to
which it is entitled under this Agreement. Such records shall be preserved,
maintained and made available to the extent required by law and in accordance
with the Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules thereunder. Upon request by the Fund or CSI, Service Organization agrees
to promptly make copies or, if required, originals of such of these records
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available to the Fund or CSI, as the case may be. Service Organization also
agrees to promptly notify the Fund or CSI if it experiences any difficulty in
maintaining these records in an accurate and complete manner. This provision
shall survive the termination of this Agreement.
Service Organization agrees to furnish the Fund, Counsellors and CSI
with such information as they may reasonably request (including, without
limitation, periodic certifications confirming the provision to Plans, Plan
participants and Customers of the services described herein). Moreover, Service
Organization agrees to provide to the Fund, Counsellors and CSI access to it and
its personnel at their reasonable request during normal business hours to
confirm compliance with the provisions of this Agreement and applicable law. In
performing services hereunder, Service Organization agrees that it will not
engage in any activities set forth in Schedule B.
Service Organization shall take all steps necessary to ensure that the
arrangements provided for in this Agreement are properly disclosed to the Plans
and Customers. Service Organization agrees to inform Plans and Customers that
they are transacting business with Service Organization and not with CSI,
Counsellors or the Fund, and that they and Plan participants may look only to
Service Organization for resolution of problems or discrepancies in their
accounts or between those accounts and Service Organization's omnibus accounts
(the "Accounts") at the Fund. Service Organization and Service Organization's
employees will, upon request, be available during normal business hours to
consult with the Fund, Counsellors and CSI or their designees concerning the
performance of Service Organization's responsibilities under this Agreement.
Upon Service Organization's written request, CSI will inform Service
Organization as to the states and jurisdictions in which it believes the Advisor
Shares have been qualified for sale under, or are exempt from the requirements
of, the respective securities laws of such states and jurisdictions. However,
neither CSI, Counsellors nor the Fund assumes any responsibility or obligation
as to Service Organization's right to sell Advisor Shares in any state or
jurisdiction. Service Organization agrees that it will not offer or sell any
Advisor Shares to Plans, Customers or persons in any jurisdiction in which
Service Organization is not properly licensed and authorized to make such offers
or sales, or in which Advisor Shares are not qualified for sale. CSI has full
authority to take such action as it may deem advisable in respect of all matters
pertaining to the continuous offering of Advisor Shares. The Fund reserves the
right in its sole discretion and without notice to Service Organization to
suspend sales or withdraw the offering of Advisor Shares.
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Service Organization shall maintain at all times general liability and
other insurance coverage, including errors and omissions coverage, that is
reasonable and customary in light of its duties hereunder, with limits of not
less than $5 million. Such insurance coverage shall be issued by a qualified
insurance carrier with a Best's rating of at least "A" or with the highest
rating of a nationally recognized statistical rating organization.
The Fund may enter into other similar agreements with any other person
or persons without Service Organization's consent.
2. Orders for Advisor Shares. Orders received from Service Organization
for Advisor Shares of the Fund will be accepted by the Fund only at the public
offering price applicable to each order, as set forth in the relevant Prospectus
and Statement. All orders by Service Organization for Advisor Shares will be
held through the Accounts with the Fund; and Service Organization agrees to make
available on a monthly basis to the Fund records necessary to determine the
number of Plans, Plan participants and/or Customers in each Account and the
times of receipt of Plan participant and Customer orders. Service Organization
agrees to use its best efforts to assist the Fund in identifying "market timers"
or investors who engage in a pattern of short-term trading.
On each day on which the Fund calculates its net asset value (a
"Business Day"), Service Organization shall aggregate and calculate the net
purchase and redemption orders for each Account maintained by the Fund in which
Plan participant and Customer assets are invested. Net orders shall only reflect
Plan participant and Customer orders that Service Organization has received
prior to the close of regular trading on the New York Stock Exchange, Inc. (the
"NYSE") (currently 4:00 p.m., Eastern time) on that Business Day. Orders that
Service Organization has received after the close of regular trading on the NYSE
shall be treated as though received on the next Business Day. Each communication
of orders by Service Organization shall constitute a representation that such
orders were received by it prior to the close of regular trading on the NYSE on
the Business Day on which the purchase or redemption order is priced in
accordance with Rule 22c-1 under the 1940 Act. Other procedures relating to the
handling of orders shall be in accordance with the Prospectus and Statement of
the relevant Fund or with oral or written instructions that CSI or the Fund
shall forward to Service Organization from time to time.
Subject to the terms and conditions of this Agreement and the
procedures referred to above, Service Organization shall be appointed to act,
and Service Organization by indicating next to its signature below has agreed to
act as agent of the Fund for the purpose specifically set forth in this
paragraph. Provided that Service Organization complies with the foregoing, it
4
shall be deemed to be an agent of the Fund for the sole purpose of receiving
instructions as Plan agent for the purchase and redemption of Advisor Shares of
that Fund prior to the close of regular trading each Business Day and
communicating orders based on such instructions to the Fund's transfer agent,
all as specified herein. The Business Day on which Service Organization receives
such instructions prior to the close of regular trading on the NYSE shall be the
Business Day on which such orders will be deemed to be received by CSI or the
Fund's transfer agent as a result of such instructions.
Dividends and capital gains distributions will be automatically
reinvested at net asset value in accordance with the Fund's Prospectus.
Payment for Advisor Shares of the Fund must be received together with
Service Organization's order unless the Fund agrees otherwise. All orders are
subject to acceptance or rejection by CSI or the Fund in the sole discretion of
either, or by the Fund's transfer agent acting on its behalf, and orders shall
be effective only upon receipt in proper form. The Fund may, if necessary, delay
redemption of Advisor Shares to the extent permitted by the 1940 Act.
3. Fees. (a) In consideration of the shareholder services provided by
the Service Organization, the Fund may pay to the Service Organization, and the
Service Organization will accept as full payment therefor, a fee at the annual
rate of [up to .25%] of the average daily net assets of the Advisor Shares held
of record by the Service Organization from time to time on behalf of Plan
participants and Customers (the "Customers' Advisor Shares"), which fee will be
computed daily and payable quarterly.
(b) In consideration of the distribution, marketing,
administrative and accounting services and facilities provided by the Service
Organization, the Fund will pay to the Service Organization, and the Service
Organization will accept as full payment therefor, a fee at the annual rate of
[up to .50%] of the average daily net assets of the Customers' Advisor Shares,
which fee will be computed daily and payable quarterly.
(c) For purposes of determining the fees payable under this
Section 3, the average daily net assets of the Customers' Advisor Shares will be
computed in the manner specified in the relevant Fund's registration statement
(as the same is in effect from time to time) in connection with the computation
of the net asset value of Advisor Shares for purposes of purchases and
redemptions.
(d) Service Organization will provide to Plans, Plan
participants and Customers a schedule of fees showing the compensation payable
to the Service Organization hereunder, along with any other fees charged by it
to Plans, Plan participants and Customers relating to their assets that are
invested in Advisor Shares.
5
4. Counsellors Securities' Responsibilities; Limitation of Liability
for Claims. Any printed information that is furnished to Service Organization
other than the Prospectus, the Statement, information supplemental to the
Prospectus and the Statement, periodic reports and proxy solicitation materials
is CSI's sole responsibility, and not the responsibility of the Fund, and
Service Organization agrees that the Fund, the shareholders of the Fund and the
officers and governing Board of the Fund shall have no liability or
responsibility to Service Organization in these respects. Further, it is
understood, in the case of the Fund that is organized as a Massachusetts
business trust or series thereof, that the declarations of trust for each trust
refers to the trustees collectively as trustees and not as individuals
personally, and that the declaration of trust provides that no shareholder,
trustee, officer, employee or agent of the trust shall be subject to claims
against or obligations of the trust to any extent whatsoever, but that the trust
estate only shall be liable. No Fund shall be liable for the obligations or
liabilities of any other Fund. No series of any Fund, if any, shall be liable
for obligations of any other series.
5. Pricing Errors. In the event adjustments are required to correct any
error in the computation of the net asset value of a Fund's Advisor Shares, the
Fund or CSI shall notify Service Organization as soon as practicable after
discovering the need for those adjustments that result in an aggregate
reimbursement of $150 or more to any one Account maintained by the Fund for Plan
participants and/or Customers. Any such notice shall state for each day for
which an error occurred the incorrect price, the correct price and, to the
extent communicated to the Fund's shareholders, the reason for the price change.
Service Organization may send this notice or a derivation thereof (so long as
such derivation is approved in advance by CSI or Counsellors) to Plan
participants and Customers whose accounts are affected by the price change.
If an Account maintained by the Fund for Plan participants and
Customers received amounts in excess of the amounts to which it otherwise would
have entitled prior to an adjustment for an error, Service Organization, at the
Fund's request, will make a good faith attempt to collect such excess amounts
from Plan participants and Customers. In no event, however, shall Service
Organization be liable to the Fund or CSI for any such amounts.
If an adjustment is to be made in accordance with the first paragraph
of this section 5, the relevant Fund shall make all necessary adjustments
(within the parameters specified in that first paragraph) to the number of
Advisor Shares owned in the Accounts and distribute to Service Organization the
amount of such underpayment for credit to Plan participants' and Customers'
accounts.
6. Publicity. CSI will provide Service Organization on a timely basis
with investment performance information for the Fund in which Service
Organization maintains an Account, including total return for the preceding
6
calendar month and calendar quarter, the calendar year to date, and the prior
one-year, five-year, and ten-year (or life of the Fund) periods. Service
Organization may, based on the Securities and Exchange Commission-mandated
information supplied by CSI, prepare communications for Plan participants and
Customers ("Participant Materials"). Service Organization shall provide copies
of all Participant Materials to CSI concurrently with their first use for CSI's
internal recordkeeping purposes. It is understood that neither CSI nor any Fund
shall be responsible for errors or omissions in, or the content of, Participant
Materials.
7. Standard of Care; Indemnification. In carrying out Service
Organization's and CSI's obligations under this Agreement, Service
Organization and CSI each agree to act in good faith and without negligence.
Service Organization agrees to and does release, indemnify and hold the
Fund, its investment adviser(s), CSI and their respective officers, trustees,
directors, employees, agents and controlling persons harmless from and against
any and all direct or indirect claims, liabilities, expenses or losses resulting
from requests, directions, actions or inactions of or by Service Organization or
its officers, employees or agents regarding Service Organization's
responsibilities hereunder. Without limiting the generality of the foregoing,
Service Organization agrees that this provision will apply to claims,
liabilities, expenses or losses arising out of (a) Service Organization making
any statement or representation concerning the Advisor Shares that is not
contained in the relevant Prospectus or Statement or in such printed material
issued by CSI or a Fund as information supplemental to the Prospectus and
Statement (including, without limitation, any statement, representation or
omission contained in Participant Materials) and (b) a sale of Advisor Shares in
any state or jurisdiction in which such Advisor Shares are not qualified for
sale or exempt from the requirements of the relevant securities laws or in which
Service Organization is not properly licensed or authorized to make offers or
sales. CSI and the Fund, in each case solely to the extent relating to such
party's responsibilities hereunder, agree to and do release, indemnify and hold
Service Organization and its officers, directors and controlling persons
harmless from and against any and all direct or indirect claims, liabilities,
expenses or losses resulting from requests, directions, actions or inactions of
or by any Fund, its investment adviser(s), CSI or their respective officers,
trustees, directors, employees, agents or controlling persons.
This provision shall survive the termination of this Agreement.
8. Representations and Warranties. Each party hereby represents and
warrants to the other that it is duly authorized by all necessary action,
approval or authorization to enter into this Agreement and that it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized.
7
Service Organization further represents, warrants and agrees that:
(i) Service Organization is and, during the term of
this Agreement, will be fully authorized by applicable law and
regulation and by any agreement it may have with any Plan, Customer or
client for whom it may act in a manner covered by this Agreement to
perform the services and receive the compensation therefor described in
this Agreement;
(ii) in performing the services described in this
Agreement, Service Organization will comply with all applicable laws,
rules and regulations;
(iii) Service Organization is duly registered as a
broker-dealer under Section 15 of the Securities Exchange Act of 1934,
as amended (the "1934 Act") and applicable state securities laws and
regulations, and all such registrations are in full force and effect
and will remain in effect during the term of this Agreement;
(iv) neither Service Organization nor any of its
"affiliates" (as such term is defined in 29 C.F.R. Section
2510.3-21(e)) is or, during term of this Agreement, will become a
"fiduciary" of any Plan as such term is defined in section 3(21) of the
Employment Retirement Income Security Act of 1974, as amended
("ERISA"), and section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code");
(v) the receipt of fees hereunder will not
constitute a "prohibited transaction" as such term is defined in
section 406 of ERISA and section 4975 of the Code;
(vi) the compensation payable to Service
Organization hereunder, together with any other compensation it
receives from Plans, Plan participants and Customers for services
contemplated by this Agreement, will not be excessive or unreasonable
under the laws and instruments governing its relationships with Plans,
Plan participants and Customers; and
(vii) Service Organization is duly registered as a
transfer agent under Section 17A of the 1934 Act and applicable state
securities laws and regulations and such registrations are in full
force and effect and will remain in effect during the term of this
Agreement.
8
9. Reports. Service Organization will furnish the Fund or its designees
with such information as it or they may reasonably request (including, without
limitation, periodic certifications confirming the provision to Plans, Plan
participants and Customers of the services described herein), and will otherwise
cooperate with the Fund and its designees (including, without limitation, any
auditors designated by the Fund), in connection with the preparation of reports
to the Fund's governing Board concerning this Agreement and the monies paid or
payable by the Fund pursuant hereto, as well as any other reports or filings
that may be required by law. Service Organization will promptly notify the Fund
and CSI in the event it is no longer able to make the representations and
warranties set forth above.
10. Term. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by the Fund or their designee or on
such other date as the parties may determine. Unless sooner terminated, this
Agreement will continue until one year from the date hereof, and thereafter will
continue automatically for successive annual periods provided such continuance
is specifically approved at least annually by the Fund in the manner set forth
in the next paragraph. This Agreement is terminable with or without cause,
without penalty, at any time by the Fund, which termination may be by vote of a
majority of (a) the Disinterested Trustees/Directors (as defined below) or (b)
the outstanding Series 2 Advisor Shares of the Fund, or by Service Organization
upon 30 days' notice to the other party hereto.
Anything in this Agreement to the contrary notwithstanding, no
compensation may be paid under this Agreement until this Agreement has been
approved by vote of a majority of (i) the Fund's governing Board and (ii) those
Trustees/Directors who are not "interested persons" (as defined in the 0000 Xxx)
of the Fund and have no direct or indirect financial interest in the operation
of the Distribution Plan adopted by the Fund regarding the provision of
distribution and support services to the beneficial owners of the Advisor Shares
or in any agreements related thereto ("Disinterested Trustees/Directors"), cast
in person at a meeting for the purpose of voting on such approval.
11. Governing Law; Complete Agreement; Assignment. This Agreement
shall be governed by and construed in accordance with the laws (except the
conflict of law rules) of the State of New York.
This Agreement contains the full and complete understanding of the
parties and supersedes all prior representations, promises, statements,
arrangements, agreements, warranties and understandings between the parties with
respect to the subject matter hereof, whether oral or written, express or
implied.
9
This Agreement is non-assignable by the parties hereto and will
terminate automatically in the event of its assignment (as such term is defined
in the 1940 Act). Nothing in this Agreement is intended to confer upon any
person other than the Fund and the parties hereto and their permitted assigns
and successors any rights or remedies under or by reason of this Agreement.
12. Amendment. This Agreement, including the Schedules thereto, may be
modified or amended and the terms of this Agreement may be waived only by
writings signed by each of the parties.
13. Notices. All notices and communications shall be mailed or
telecopied to Service Organization to the address set forth below and to the
Fund or CSI at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxxx X. Xxxxx (Fax No.: 000-000-0000), or in any case to such other address
as a party may request by giving written notice to the other.
COUNSELLORS SECURITIES INC.
Date:_____________ __, 1995 By:________________________________
WARBURG, XXXXXX _________________ FUND
Please indicate Service Organization's confirmation and acceptance of
this Agreement as of the date written above by signing below and returning
one copy of this Agreement to Counsellors Securities Inc., 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx.
Accepted and Agreed:
[ ]
By:_________________________
Name (Print):________________________
Title:_______________________________
Address:__________________________________
10
Telephone No.:___________________________
Fax No.:__________________________________
INDICATE INTENTION TO ACT AS AGENT
AS SET FORTH IN THIS AGREEMENT:
We agree to act as agent for the sole purpose of and to the extent set forth
in paragraph 2 of this Agreement. Yes ____ No ____
Capitalized terms used
herein and not otherwise defined
shall have the meaning set forth in
the body of the Series 2 Account
Services Agreement.
A-1
42597
SCHEDULE A
Distribution and Marketing Services
(i) formulation and implementation of marketing and promotional
activities including, but not limited to, direct mail promotions and other
advertising, if appropriate;
(ii) printing and distributing Prospectuses, Statements and
reports of the Fund to prospective Plans, Plan sponsors and Customers;
(iii) preparing, printing and distributing sales literature
pertaining to the Fund; and
(iv) obtaining information, analyses and reports with respect to
marketing and promotional activities relating to the Fund.
Administrative Services
(i) receiving from the Plans, Plan participants and
Customers, by the close of regular trading on the New York Stock Exchange
(currently 4:00 p.m., Eastern time) on any business day (i.e., a day on which
the New York Stock Exchange is open for trading), instructions for the
purchase and redemption of shares; aggregating and processing purchase and
redemption requests for Advisor Shares from Plan participants and Customers
and placing net purchase and redemption orders with CSI or its designee;
payment for net purchase orders must be received at the time the order is
placed; communicating orders in a timely manner to CSI or its designee and
promptly delivering, or instructing the Plans to deliver, appropriate
documentation to CSI or its designee;
(ii) providing Plan participants and Customers with a service that
invests the assets of their accounts in Advisor Shares;
(iii) providing information periodically to Plans, Plan
participants and Customers showing their positions in Advisor Shares;
(iv) arranging for bank wires;
A-2
(v) providing sub-accounting with respect to Advisor Shares
beneficially owned by Plans, Plan participants and Customers;
(vi) if required by law, forwarding shareholder communications
from the relevant Fund (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution and tax notices)
to Plans, Plan participants and Customers at Service Organization's expense,
with such material to be provided to it by CSI to the extent reasonably
practicable upon ten Business Days' notice;
(vii) withholding taxes on non-resident alien accounts and
otherwise as appropriate;
(viii) maintaining records of dividends and distributions; and
disbursing dividends and distributions and reinvesting such in the relevant
Fund for Plans and Plan participants;
(ix) preparing and delivering to Plans, Plan participants and
Customers and state and federal regulatory authorities, including the U.S.
Internal Revenue Service, such information respecting dividends and
distributions paid by the relevant Fund as may be required by law;
(x) maintaining adequate records for each Plan and Customer
reflecting Advisor Shares purchased and redeemed, including dates and prices
for all transactions, and Share balances;
(xi) preparing and delivering to Plans and Customers periodic
account statements showing for each Plan and Customer, respectively, the
total number of Advisor Shares held as of the statement closing date,
purchases and redemptions of Advisor Shares during the statement period, and
dividends and other distributions paid during the statement period (whether
paid in cash or reinvested in Advisor Shares), including dates and prices for
all transactions;
(xii) on behalf of and to the extent instructed by each Plan and
Customer, at Service Organization's expense, delivering to Plan participants
(or delivering to the Plans for distribution to Plan participants) and
Customers Prospectuses, Statements and other materials provided to it by CSI
to the extent reasonably practicable upon ten Business Days' notice;
(xiii) maintain daily and monthly purchase summaries (expressed in
both Share and dollar amounts) for each Plan and Customer;
(xiv) settle orders in accordance with the terms of the
Prospectus and Statement of the Fund; and
A-3
(xv) transmit to CSI, or to the Fund if so instructed by CSI, such
occasional and periodic reports as CSI shall reasonably request from time to
time to enable CSI or the Fund to comply with applicable laws and
regulations.
Shareholder Services
(i) responding to Plans, Plan participant and Customer inquiries;
(ii) providing information on Plan, Plan participant and
Customer investments;
(iii) providing other shareholder liaison services;
(iv) providing office space and equipment, telephone facilities
and personnel (which may be any part of the space, equipment and facilities
currently used in Service Organization's business, or any personnel employed
by Service Organization) as may be reasonably necessary or beneficial in
order to provide services to Plans and Customers under this Agreement;
(v) send confirmations of orders to the Plans and Plan
participants and Customers as required by Rule 10b-10 of the Securities
Exchange Act of 1934 (the "1934 Act") and paying any costs in connection
therewith;
(vi) using all reasonable efforts to ensure that taxpayer
identification numbers provided by Service Organization on behalf of the
Plans, Plan participants and Customers are correct; and
(vii) providing the Plans, Plan participants and Customers a
confirming Prospectus following an acquisition of Advisor Shares to the
extent required by law.
A-4
Other Services
(i) providing all other services as may be incidental
to the Distribution and Marketing Services, Administrative Services and
Shareholder Services enumerated above;
(ii) providing such other services as may be normal or customary
for service providers performing substantially similar services; and
(iii) providing such other services as may be mutually agreed by
the parties to the extent permitted under applicable statutes, rules and
regulations.
B-1
84370324
SCHEDULE B
Prohibited Activities
(i) Service Organization shall not withhold placing orders
for the Advisor Shares received from Plan participants and Customers so as to
profit as a result of such withholding.
(ii) Service Organization shall not place orders for Advisor
Shares unless it has already received purchase orders for Advisor Shares at
the applicable public offering price and subject to the terms hereof.
(iii) Service Organization agrees that it will not offer or sell
any Advisor Shares except under circumstances that will result in compliance
with applicable federal and state securities laws and that in connection with
sales and offers to sell Advisor Shares Service Organization will furnish to
each person to whom any such sale or offer is made, at or prior to the time
of offering or sale, a copy of the relevant Prospectus and, if requested, the
corresponding Statement (each as then amended or supplemented) and will not
furnish to any person any information relating to a Fund that is inconsistent
in any respect with the information contained in the Prospectus and Statement
(each as then amended or supplemented).
(iv) Service Organization shall not make any representations
concerning the Advisor Shares except those contained in the relevant
Prospectus and Statement and in such printed information subsequently issued
by CSI or a Fund as information supplemental to the Prospectus and Statement.
