CO-ADMINISTRATION AGREEMENT
December 31, 1996
Counsellors Funds Service, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
Warburg, Xxxxxx Health Sciences Fund, Inc. (the "Fund"), a corporation
organized and existing under the laws of the State of Maryland, confirms its
agreement with Counsellors Funds Service, Inc. ("Counsellors Service") as
follows:
1. Investment Description; Appointment
-----------------------------------
The Fund desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in its
Articles of Incorporation, as amended from time to time (the "Articles"), in its
By-laws, as amended from time to time (the "By-laws"), in the Fund's prospectus
(the "Prospectus") and Statement of Additional Information (the "Statement of
Additional Information") as in effect from time to time, and in such manner and
to the extent as may from time to time be approved by the Board of Directors of
the Fund. Copies of the Prospectus, Statement of Additional Information and the
Articles and By-laws have been submitted to Counsellors Service. The Fund
employs Warburg, Xxxxxx Counsellors, Inc. (the "Adviser") as its investment
adviser and desires to employ and hereby appoints Counsellors Service as its
co-administrator. Counsellors Service accepts this appointment and agrees to
furnish the services for the compensation set forth below.
2. Services as Co-Administrator
----------------------------
Subject to the supervision and direction of the Board of Directors of
the Fund, Counsellors Service will:
(a) assist in supervising all aspects of the Fund's operations, except
those performed by other parties pursuant to written agreements with the Fund;
(b) provide various shareholder liaison services including, but not
limited to, responding to inquiries of
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shareholders regarding the Fund, providing information on shareholder
investments, assisting shareholders of the Fund in changing dividend options,
account designations and addresses, and other similar services;
(c) provide certain administrative services including, but not limited
to, providing periodic statements showing the account balance of a Fund
shareholder and integrating the statements with those of other transactions and
balances in the shareholder's other accounts serviced by the Fund's custodian or
transfer agent;
(d) supply the Fund with office facilities (which may be Counsellors
Service's own offices), data processing services, clerical, internal executive
and administrative services, and stationery and office supplies;
(e) furnish corporate secretarial services, including assisting in the
preparation of materials for Board of Directors' meetings and distributing those
materials and preparing minutes of meetings of the Fund's Board of Directors and
any committees thereof and of the Fund's shareholders;
(f) coordinate the preparation of reports to the Fund's shareholders
of record and filings with the Securities and Exchange Commission (the "SEC")
including, but not limited to, proxy statements; annual, semi-annual and
quarterly reports to shareholders; and post-effective amendments to the Fund's
Registration Statement on Form N-1A (the "Registration Statement");
(g) assist in the preparation of the Fund's tax returns and assist in
other regulatory filings as necessary;
(h) assist the Adviser, at the Adviser's request, in monitoring and
developing compliance procedures for the Fund which will include, among other
matters, procedures to assist the Adviser in monitoring compliance with the
Fund's investment objective, policies, restrictions, tax matters and applicable
laws and regulations; and
(i) acting as liaison between the Fund and the Fund's independent
public accountants, counsel, custodian or custodians, transfer agent and
co-administrator and taking all reasonable action in the performance of its
obligations under this Agreement to assure that all necessary information is
made available to each of them.
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In performing all services under this Agreement, Counsellors Service
shall act in conformity with applicable law, the Articles and By-laws, and the
investment objective, investment policies and other practices and policies set
forth in the Registration Statement, as such Registration Statement and
practices and policies may be amended from time to time.
3. Compensation
------------
In consideration of services rendered pursuant to this Agreement, the
Fund will pay Counsellors Service on the first business day of each month a fee
for the previous month at an annual rate of .10% of the Fund's average daily net
assets. The fee for the period from the date the Fund commences its investment
operations to the end of the month during which the Fund commences its
investment operations shall be prorated according to the proportion that 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 prorated
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 Counsellors Service, fees shall be
calculated monthly and the value of the Fund's net assets shall be computed at
the times and in the manner specified in the Prospectus and Statement of
Additional Information as from time to time in effect.
4. Expenses
--------
Counsellors Service will bear all expenses in connection with the
performance of its services under this Agreement; provided, however, that the
Fund will reimburse Counsellors Service for the out-of-pocket expenses incurred
by it on behalf of the Fund. Such reimbursable expenses shall include, but not
be limited to, postage, telephone, telex and FedEx charges. Counsellors Service
will xxxx the Fund as soon as practicable after the end of each calendar month
for the expenses it is entitled to have reimbursed.
The Fund will bear certain other expenses to be incurred in its
operation, including: taxes, interest, brokerage fees and commissions, if any;
fees of Directors of the Fund who are not officers, directors, or employees of
the Adviser or Counsellors Service; SEC fees and state blue sky qualification
fees; charges of custodians and transfer and dividend disbursing agents; certain
insurance premiums; outside auditing and legal expenses; costs of maintenance of
corporate existence; except as
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otherwise provided herein, costs attributable to investor services, including
without limitation, telephone and personnel expenses; costs of preparing and
printing prospectuses and statements of additional information for regulatory
purposes and for distribution to existing shareholders; costs of shareholders'
reports and meetings, and meetings of the officers of the Board of Directors of
the Fund; costs of any pricing services; and any extraordinary expenses.
5. Standard of Care
----------------
Counsellors Service shall exercise its best judgment in rendering the
services listed in paragraph 2 above. Counsellors Service shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which this Agreement relates provided that
nothing in this Agreement shall be deemed to protect or purport to protect
Counsellors Service against liability to the Fund or its shareholders to which
Counsellors Service would otherwise be subject by reason of willful misfeasance,
bad faith or negligence on its part in the performance of its duties or by
reason of Counsellors Service's reckless disregard of its obligations and duties
under this Agreement.
6. Term of Agreement
-----------------
This Agreement shall become effective as of the date the Fund
commences its investment operations and shall continue until April 17, 1998 and
shall continue automatically (unless terminated as provided herein) for
successive annual periods ending on April 17th of each year, provided that such
continuance is specifically approved at least annually by the Board of Directors
of the Fund, including a majority of the Board of Directors who are not
"interested persons" (as defined in the Investment Company Act of 1940, as
amended) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on sixty (60) days' written notice, by the Board of Directors
of the Fund or by vote of holders of a majority of the Fund's shares, or upon
sixty (60) days' written notice, by Counsellors Service.
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7. Service to Other Companies or Accounts
--------------------------------------
The Fund understands that Counsellors Service now acts, will continue
to act and may act in the future as administrator, co-administrator or
administrative services agent to one or more other investment companies, and the
Fund has no objection to Counsellors Service's so acting. The Fund understands
that the persons employed by Counsellors Service to assist in the performance of
Counsellors Service's duties hereunder will not devote their full time to such
service and nothing contained in this Agreement shall be deemed to limit or
restrict the right of Counsellors Service or any affiliate of Counsellors
Service to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
If the foregoing is in accordance with your understanding, kindly
indicate your acceptance hereof by signing and returning to us the enclosed copy
hereof.
Very truly yours,
WARBURG, XXXXXX HEALTH SCIENCES
FUND, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title:Vice President and
Secretary
Accepted:
WARBURG, XXXXXX COUNSELLORS, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Vice President
