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CO-ADMINISTRATION AGREEMENT
TERMS AND CONDITIONS
This Agreement is made as of __________, 1997 by and between
Warburg, Xxxxxx Trust II (the "Trust"), a Massachusetts business trust, and PFPC
Inc. ("PFPC"), a Delaware corporation, which is an indirect, wholly owned
subsidiary of PNC Bank Corp.
The Trust is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"). The Trust wishes to
retain PFPC to provide certain administration and accounting services with
respect to series of the Trust that may be offered from time to time (each a
"Portfolio" and collectively the "Portfolios"), and PFPC wishes to furnish such
services.
In consideration of the promises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions.
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(a) "Authorized Person." The term "Authorized Person" shall mean any
officer of the Trust and any other person, who is duly authorized by the Trust's
Governing Board, to give Oral and Written Instructions on behalf of the Trust.
Such persons are listed in the Certificate attached hereto as the Authorized
Persons Appendix to each Services Attachment to this Agreement. If PFPC provides
more than one service hereunder, the Trust's designation of Authorized Persons
may vary by service.
(b) "CFTC." The term "CFTC" shall mean the Commodities Futures Trading
Commission.
(c) "Governing Board." The Term "Governing Board" shall mean the
Trust's Board of Directors if the Trust is a corporation or the Trust's Board of
Trustees if the Trust is a trust, or, where duly authorized, a competent
committee thereof.
(d) "Oral Instructions." The term "Oral Instructions" shall mean oral
instructions received by PFPC from an Authorized Person or from a person
reasonably believed by PFPC to be an Authorized Person.
(e) "PNC." The term "PNC" shall mean PNC Bank or a subsidiary or
affiliate of PNC Bank.
(f) "SEC." The term "SEC" shall mean the Securities and Exchange
Commission.
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(g) "Securities and Commodities Laws." The terms the "1933 Act" shall
mean the Securities Act of 1933, as amended, the "1934 Act" shall mean the
Securities Exchange Act of 1934, as amended, the "1940 Act" shall mean the
Investment Company Xxx 0000, as amended, and the "CEA" shall mean the
Commodities Exchange Act, as amended.
(h) "Services." The term "Services" shall mean the service provided to
the Trust by PFPC.
(i) "Shares." The terms "Shares" shall mean the shares of beneficial
interest of any series or class of the Trust.
(j) "Property." The term "Property" shall mean:
(i) any and all securities and other investment items which the
Trust may from time to time deposit, or cause to be
deposited, with PNC or which PNC may from time to time hold
for the Trust;
(ii) all income in respect of any of such securities or other
investment items;
(iii) all proceeds of the sale of any of such securities or
investment items; and
(iv) all proceeds of the sale of securities issued by the Trust,
which are received by PNC from time to time, from or on
behalf of the Trust.
(k) "Written Instructions." The term "Written Instructions" shall mean
written instructions signed by one Authorized Person and received by PFPC. The
instructions may be delivered by hand, mail, tested telegram, cable, telex or
facsimile sending device.
2. Appointment.
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The Trust hereby appoints PFPC to provide administration and accounting
services with respect to the Portfolios, in accordance with the terms set forth
in this Agreement. PFPC accepts such appointment and agrees to furnish such
services.
3. Delivery of Documents.
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The Trust has provided or, where applicable, will provide PFPC with the
following:
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(a) certified or authenticated copies of the resolutions of the
Trust's Governing Board, approving the appointment of PNC or its
affiliates to provide services with respect to the Portfolios;
(b) a copy of the Trust's most recent effective registration statement
with respect to the Portfolios;
(c) a copy of the Trust's advisory agreement or agreements with
respect to the Portfolios;
(d) a copy of the Trust's distribution agreement or agreements with
respect to the Portfolios;
(e) a copy of the Trust's administration or co-administration
agreement with respect to the Portfolios if PFPC is not providing
the Trust with such services;
(f) copies of any shareholder servicing agreements made in respect of
the Trust with respect to the Portfolios; and
(g) certified or authenticated copies of any and all amendments or
supplements to the foregoing.
4. Compliance with Government Rules and Regulations. PFPC undertakes to
comply with all applicable requirements of the 1933 Act, the 1934 Act, the 1940
Act, and the CEA, and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to all duties to be performed by
PFPC hereunder. Except as specifically set forth herein, PFPC assumes no
responsibility for such compliance by the Trust.
5. Instructions.
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Unless otherwise provided in this Agreement, PFPC shall act only upon
Oral and Written Instructions.
PFPC shall be entitled to rely upon any Oral and Written Instructions
it receives from an Authorized Person (or from a person reasonably believed by
PFPC to be an Authorized Person) pursuant to this Agreement. PFPC may assume
that any Oral or Written Instruction received hereunder is not in any way
inconsistent with the provisions of organizational documents or this Agreement
or of any vote, resolution or proceeding of the Trust's Governing Board or of
the Trust's shareholders.
The Trust agrees to forward to PFPC Written Instructions confirming
Oral Instructions so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact that
such
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confirming Written Instructions are not received by PFPC shall in no
way invalidate the transactions or enforceability of the transactions authorized
by the Oral Instructions. The Trust further agrees that PFPC shall incur no
liability to the Trust in acting upon Oral or Written Instructions provided such
instructions reasonably appear to have been received from an Authorized Person.
6. Right to Receive Advice.
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(a) Advice of the Trust. If PFPC is in doubt as to any action
it should or should not take, PFPC may request directions or advice, including
Oral or Written Instructions, from the Trust.
(b) Advice of Counsel. If PFPC shall be in doubt as to any questions of
law pertaining to any action it should or should not take, PFPC may request
advice at its own cost from such counsel of its own choosing (who may be counsel
for the Trust, the Portfolios' adviser (the "Adviser") or PFPC, at the option of
PFPC).
(c) Conflicting Advice. In the event of a conflict between directions,
advice or Oral or Written Instructions PNC receives from the Trust, and the
advice it receives from counsel, PFPC shall be entitled to rely upon and follow
the advice of counsel.
(d) Protection of PFPC. PFPC shall be protected in any action it takes
or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Trust or from counsel and which PFPC believes,
in good faith, to be consistent with those directions, advice and Oral or
Written Instructions.
Nothing in this paragraph shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not taking such
action.
7. Records.
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The book and records pertaining to the Portfolios, which are in the
possession of PFPC, shall be the property of the Trust. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Trust, or the Trust's
Authorized Persons, shall have access to such books and records at all times
during PFPC's normal business hours. Upon the reasonable request of the Trust,
copies of any such books and records shall be
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provided by PFPC to the Trust or to an Authorized Person of the Trust,
at the Trust's expense.
PFPC shall keep the following records:
(a) all books and records with respect to the Portfolios' books of
account;
(b) records of the Portfolios' securities transactions; and
(c) all other books and records as PFPC is required to maintain
pursuant to Rule 31a-1 of the 1940 Act and as specifically set
forth in Appendix A hereto.
8. Confidentiality.
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PPFC agrees to keep confidential all records of the Portfolios and
information relative to the Portfolios and its shareholders (past, present and
potential), unless the release of such records or information is otherwise
consented to, in writing, by the Trust. The Trust agrees that such consent shall
not be unreasonably withheld. The Trust further agrees that, should PFPC be
required to provide such information or records to duly constituted authorities
(who may institute civil or criminal contempt proceedings for failure to
comply), PFPC shall not be required to seek the Trust's consent prior to
disclosing such information.
9. Liaison with Accountants.
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PFPC shall act as liaison with the Portfolios' independent public
accountants and shall provide account analyses, fiscal year summaries, and other
audit-related schedules. PFPC 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
opinion, as such may be required by the Trust from time to time.
10. Disaster Recovery.
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PFPC shall enter into and shall maintain in effect with appropriate
parties one or more agreements making reasonable provision of emergency use of
electronic data processing equipment to the extent appropriate equipment is
available. In the event of equipment failures, PFPC shall, at no additional
expense to the Portfolios, take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
11. Compensation.
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As compensation for services rendered by PFPC during the term of this
Agreement, the Portfolios will pay to PFPC a fee or fees as may be agreed to in
writing by the Trust and PFPC.
12. Indemnification.
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The Portfolios agree to indemnify and hold harmless PFPC and its
nominees from all taxes, charges, expenses, assessments, claims and liabilities
(including, without limitation, liabilities arising under the 1933 Act, the 1934
Act, the 1940 Act, the CEA, and any state and foreign securities and blue sky
laws, and amendments thereto, and expenses, including (without limitation)
attorneys' fees and disbursements, arising directly or indirectly from any
action which PFPC takes or does not take (i) at the request or on the direction
of or in reliance on the advice of the Trust or (ii) upon Oral or Written
Instructions. Neither PFPC, nor any of its nominees, shall be indemnified
against any liability to the Portfolios or to its shareholders (or any expenses
incident to such liability) arising out of PFPC's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties and obligations under this
Agreement.
13. Responsibility of PFPC.
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PFPC 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
PFPC, in writing. PFPC shall be obligated to exercise care and diligence in the
performance of its duties hereunder, to act in good faith and to use its best
efforts, within reasonable limits, in performing services provided for under
this Agreement. PFPC shall be responsible for its own negligent failure to
perform its duties under this Agreement. Notwithstanding the foregoing, PFPC
shall not be responsible for losses beyond its control, provided that PFPC has
acted in accordance with the standard of care set forth above; and provided
further that PFPC shall only be responsible for that portion of losses or
damages suffered by the Portfolios that are attributable to the negligence of
PFPC.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC, in connection with its duties under this
Agreement, shall not be liable for (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (b) delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's control, including acts of
civil or military authority, national emergencies, labor difficulties, fire,
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
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Notwithstanding anything in this Agreement to the contrary, PFPC shall
have no liability to the Trust for any consequential, special or indirect losses
or damages which the Trust may incur or suffer by or as a consequence of PFPC's
performance of the services provided hereunder, whether or not the likelihood of
such losses or damages was known by PFPC.
14. Description of Accounting Services.
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(a) Services on a Continuing Basis. PFPC will perform the following
accounting functions if required:
(i) Journalize the Portfolios' investment, capital share and
income and expense activities;
(ii) Verify investment buy/sell trade tickets when received from
the Adviser and transmit trades to the Portfolios' custodian
for proper settlement;
(iii) Maintain individual ledgers for investment securities;
(iv) Maintain historical tax lots for each security;
(v) Reconcile cash and investment balances of the Portfolios
with the custodian, and provide the Adviser with the
beginning cash balance available for investment purposes;
(vi) Update the cash availability throughout the day as required
by the Adviser;
(vii) Post to and prepare the Portfolios' Statement of Assets and
Liabilities and the Statement of Operations;
(viii) Calculate various contractual expenses (e.q., advisory and
custody fees);
(ix) Monitor the expense accruals and notify Portfolios'
management of any proposed adjustments;
(x) Control all disbursements from the Trust and authorize such
disbursements upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine the Portfolios' net income;
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(xiii) Obtain security market quotes from independent pricing
services approved by the Adviser, or if such quotes are
unavailable, then obtain such prices from the Adviser, and
in either case calculate the market value of the Portfolios'
investments;
(xiv) Transmit or mail a copy of the daily portfolio valuation to
the Adviser;
(xv) Compute the net asset value of the Portfolios;
(xvi) As appropriate, compute the Portfolios' yields, total
return, expense ratios, portfolio turnover rate, and, if
required, portfolio average dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which will include
the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
15. Description of Administration Services.
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(a) Services on a Continuing Basis.
(i) Prepare quarterly broker security transactions summaries;
(ii) Prepare monthly security transaction listings;
(iii) Prepare for execution and file the Trust's federal and state
tax returns;
(iv) Prepare and file the Portfolios' semi-annual reports with
the SEC on Form N-SAR;
(v) Prepare and file with the SEC the Portfolios' annual and
semi-annual shareholder reports;
(vi) Assist with the preparation of registration statements and
other filings relating to the registration of Shares; and
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(vii) Monitor the Trust's status as a regulated investment company
under Sub-Chapter M of the Internal Revenue Code of 1986, as
amended.
16. Duration and Termination.
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This Agreement shall continue until terminated by the Trust or by PFPC
on sixty (60) days' prior written notice to the other party.
17. Notices.
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All notices and other communications, including Written Instructions,
shall be in writing or by confirming telegram, cable, telex or facsimile sending
device. If notice is sent by confirming telegram, cable, telex or facsimile
sending device, it shall be deemed to have been given immediately. If notice is
sent by first-class mail, it shall be deemed to have been given three days after
it has been mailed. If notice is sent by messenger, it shall be deemed to have
been given on the day it is delivered. Notices shall be addressed (a) if to PFPC
at PFPC's address, 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000; (b) if to
the Trust, at the address of the Trust; or (c) if to neither of the foregoing,
at such other address as shall have been notified to the sender of any such
notice or other communication.
18. Amendments.
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This Agreement, or any term thereof, may be changed or waived only by
written amendment, signed by the party against whom enforcement of such change
or waiver is sought.
19. Delegation.
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PFPC may assign its rights and delegate its duties hereunder to any
wholly owned direct or indirect subsidiary of PNC Bank or PNC Bank Corp.,
provided that (i) PFPC gives the Trust thirty (30) days' prior written notice;
(ii) the delegate agrees with PFPC to comply with all relevant provisions of the
1940 Act; and (iii) PFPC and such delegate promptly provide such information as
the Trust may request, and respond to such questions as the Trust may ask,
relative to the delegation, including (without limitation) the capabilities of
the delegate.
20. Counterparts.
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This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
21. Further Actions.
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Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
22. Limitation of Liability.
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The Trust and PFPC agree that the obligations of the Trust and the
Portfolios under this Agreement will not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past, present or
future, of the Trust or the Portfolios, individually, but are binding only upon
the assets and property of the Portfolios, as provided in the Trust's
Declaration of Trust. 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 the authorization by the Trustees nor the
execution and delivery by the officer will be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but will
bind only the trust property of the Trust as provided in the Declaration of
Trust. No series of the Trust, including the Portfolios, will be liable for any
claims against any other series.
23. Miscellaneous.
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This Agreement embodies the entire agreement and understanding between
the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof, provided that the parties may embody in one or more
separate documents their agreement, if any, with respect to delegated and/or
Oral Instructions.
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 Delaware and
governed by Delaware 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
and shall inure to the benefit of the parties hereto and their respective
successors.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below on the day and year
first above written.
PFPC INC.
By:
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Name:
Title:
WARBURG, XXXXXX TRUST II
By:
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Name: Xxxxxx X. Xxxxx
Title: Secretary
APPENDIX A
None.
__________, 1997
Warburg, Xxxxxx Trust II
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: CO-ADMINISTRATION SERVICE FEES
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Gentlemen:
This letter constitutes our agreement with respect to compensation to
be paid to PFPC Inc. ("PFPC") under the terms of a Co-Administration Agreement
dated __________, 1997 between you (the "Trust"), on behalf of the Fixed Income
Portfolio and the Global Fixed Income Portfolio (the "Portfolios" and each a
"Portfolio"), and PFPC. Pursuant to Paragraph 11 of that Agreement, and in
consideration of the services to be provided to you, you will pay PFPC an annual
co-administration fee, to be calculated daily and paid monthly. You will also
reimburse PFPC for its out-of-pocket expenses incurred on behalf of the
Portfolios, including, but not limited to: postage and handling, telephone,
telex, Federal Express and outside pricing service charges.
The annual administration and accounting fee with respect to the Fixed
Income Portfolio shall be .05% of the Portfolio's average daily net assets.
The annual administration and accounting fee with respect to the Global
Fixed Income Portfolio shall be .12% of the Portfolio's first $250 million in
average daily net assets, .10% of the next $250 million in average daily net
assets, .08% of the next $250 million in average daily net assets, and .05% of
average daily net assets over $750 million.
In each month each Portfolio shall pay to PFPC the greater of the asset
based fee as calculated above or the minimum fee. The fee for the period from
the day of the year this agreement is entered into until the end of that year
shall be pro-rated according to the proportion which such period bears to the
full annual period.
Warburg, Xxxxxx Trust
__________, 1997
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If the foregoing accurately sets forth our agreement, and you intend to
be legally bound thereby, please execute a copy of this letter and return it to
us.
Very truly yours,
PFPC INC.
By:
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Name:
Title:
Accepted: WARBURG, XXXXXX TRUST II
By:
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Name: Xxxxxx X. Xxxxx
Title: Vice President
