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SERVICES AGREEMENT
Ladies and 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 provides advisory services in the future, the
"Counsellors-advisor Funds"). Pursuant to the Distribution Agreements, we,
Counsellors Securities Inc. ("CSI"), 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 Counsellors-advisor Funds (as modified from time to time,
the "Funds") as an investment alternative or to other customers of yours who
from time to time beneficially own Shares (together with Plan participants,
"Customers"). We may enter into other similar agreements with any other person
or persons without your consent or notice to you.
As used herein, unless the context otherwise requires, "we," "our"
and/or "us" refer to CSI and "you," "your" and "yours" refer to the company that
is the counterparty to this Agreement (the "Service Organization"). 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").
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 Customers 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 Securities Exchange
Act of 1934 (the "1934 Act")
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and the respective 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.
You agree to furnish the Funds, Counsellors and us with such occasional
and periodic reports as we shall reasonably request from time to time to enable
the Funds or us to comply with applicable laws and regulations (including,
without limitation, providing reports relating to blue sky and other state
securities laws and regulations) and with such other information as we may
reasonably request (including, without limitation, periodic certifications
confirming the provision to Plans (and Customers 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.
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 Customers that they are transacting business with you and not
with the Funds, Counsellors or us, and that they 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.
Neither any Fund, Counsellors nor we assume any responsibility or
obligation as to your right to sell Shares in any state or jurisdiction. 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 prior notice to you to suspend sales or withdraw
the offering of Shares of any or all Funds. You agree that you will not offer or
sell any Shares except in compliance with applicable federal and state
securities laws. You agree that you will not offer or sell any Shares to Plans,
Customers or other persons (i) 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
such offers or sales, (ii) with respect to whom such investment would not be
suitable or otherwise appropriate, or (iii) at any time after CSI or any Fund
has provided you with written notice that any Fund is not then currently
offering Shares to the public.
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. In
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addition, you shall promptly deliver to us such financial statements as
we reasonably request concerning your financial condition; such statements shall
fairly represent your financial condition as of the date thereof. You shall
inform us of any subsequent material change in your financial condition that
would cause such statements to no longer fairly represent your financial
condition.
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 to the Funds on a monthly basis records necessary to
determine the number of Plans or Customers in each Account (indicating the
number of new Customer accounts opened during the month, as well as the number
of ongoing Customer accounts) and, if requested by us, the times of receipt of
Customer 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.
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. Net orders shall only reflect Customer 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 Funds,
including the timing and manner of payment for Shares, shall be in accordance
with Schedule B, as amended from time to time, as well as with the Prospectus
and Statement of the relevant Fund and 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 IN THE PRECEDING PARAGRAPH, YOU ARE HEREBY APPOINTED TO
ACT, AND YOU HEREBY AGREE TO ACT, AS AGENT OF EACH FUND FOR THE PURPOSE
SPECIFICALLY SET FORTH IN THIS PARAGRAPH. Provided that you comply with the
procedures referred to in the preceding paragraph, you shall be deemed to be an
agent of each Fund for the sole purpose of receiving instructions from Customers
for the purchase and redemption of Shares of the Fund prior to the close of
regular trading on the NYSE each Business Day and communicating orders based on
such instructions to us or the Fund's transfer agent, all as specified herein.
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
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orders will be deemed to be received by us or the Fund's transfer agent
as a result of such instructions.
You shall not withhold placing orders for the Shares received from
Customers so as to profit yourself as a result of such withholding. 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.
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.
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.
You agree that during the term of this Agreement, you will not assess
against or collect from Plans or Customers 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. CSI's 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 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, officer, trustee,
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 or series of a Fund shall be liable for the obligations or
liabilities of any other Fund or series of a Fund.
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
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in an aggregate reimbursement of $150 or more to the Accounts. Any such
notice shall state for each day for which an error was in effect 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 or us) to Customers whose accounts are affected by the price change.
If an adjustment is to be made in accordance with the preceding
paragraph, the relevant Fund shall make all necessary adjustments (within the
parameters specified therein) to the number of Shares owned in the Accounts and
distribute to you the amount of such underpayment for credit to Customers'
accounts.
If the Accounts received amounts in excess of the amounts to which they
otherwise would have been entitled, you, at our request, will make a good faith
attempt to collect such excess amounts from Customers. In no event, however,
shall you be liable to the Funds or us for any such amounts.
6. Termination; Assignment. This Agreement shall be terminable without
penalty upon 30 days' written notice to us by you and upon 10 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 parties hereto and their permitted assigns
and successors any rights or remedies under or by reason of this Agreement.
7. Fund Information. You agree that you will not offer or sell any
Shares except 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). You shall not make any representations
concerning the Shares or a Fund except those 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.
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-
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mandated information supplied by CSI, prepare communications for
Customers ("Customer Materials"). You shall provide copies of all Participant
Materials to CSI concurrently with their first use for CSI's internal
recordkeeping purposes; however, it is understood that neither CSI nor any Fund
shall be responsible for errors or omissions in, or the content of, Customer
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, Counsellors,
CSI and their and our respective employees, agents, trustees, directors,
officers 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 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 or a Fund 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
Customer Materials) and (b) an offering or sale of Shares (i) 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 such offers or sales, (ii) which is unsuitable or
otherwise inappropriate to any Plan or Customer or (iii) at any time after CSI
or any Fund has provided you with written notice that any Fund is not then
currently offering Shares to the public. The Funds and CSI, in each case solely
to the extent of such parties' 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 any Fund, CSI or its or our respective officers, employees or
agents regarding our responsibilities hereunder.
This provision shall survive the termination of this Agreement.
9. Representations and Warranties. Each party hereby represents and
warrants to each other party 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:
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(i) you are fully authorized by applicable law and
regulation and by any agreement you may have with any Plan, Customer or
other 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 and with the relevant Prospectus and Statement;
(iii) if you are not duly registered as a
broker-dealer under Section 15 of the 1934 Act or as a transfer agent
under Section 17A of the 1934 Act and, in either case, 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 the services and receive the compensation therefor described in
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"); and
(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.
10. Transactions Subject to Fund/SERV. Upon the execution of the Fund/SERV
Amendment to this Agreement, trades may be made through Fund/SERV.
11. Governing Law; Complete Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
reference to conflicts of laws principles.
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.
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.
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13. 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:_____________ __, 199_ By:________________________________
Name:
Title:
Effective as of: _________, 199_
WARBURG PINCUS STRATEGIC VALUE 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:
By:
Name (Print):
Title:
Address:
Telephone No.:
Fax No.:
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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) providing Customers with a service that invests the assets of
their accounts in Shares;
(ii) receiving from the Plans and Customers, in accordance with the
Services Agreement, instructions for the purchase and redemption of Shares;
aggregating and processing purchase and redemption requests for Shares from
Customers and placing net purchase and redemption orders for each Account with
CSI or its designee, communicating such orders in a timely manner to CSI or its
designee in accordance with Schedule D to the Services Agreement; promptly
delivering, or instructing the Plans to deliver, appropriate documentation to
CSI or its designee; and settling purchase and redemption orders in accordance
with the Services Agreement and the relevant Prospectus and Statement;
(iii) arranging for bank wires;
(iv) providing sub-accounting with respect to Shares beneficially
owned by Plans and Customers;
(v) to the extent required by law, at your expense, forwarding
shareholder communications from the relevant Fund (such as the Prospectus, the
Statement, information supplemental to the Prospectus and Statement, periodic
reports, proxy solicitation materials and dividend, distribution and tax
notices) to Plans and Customers, with such material to be provided to you by
CSI to the extent reasonably practicable upon 10 Business Days' notice;
(vi) withholding taxes on non-resident alien accounts and
otherwise as required by law;
(vii) maintaining records of dividends and other distributions;
including dates and prices for all transactions, reinvesting or disbursing in
cash such dividends and distributions in the relevant Fund for Plans and
Customers;
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(viii) preparing and delivering to Plans 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;
(ix) maintaining adequate records for each Plan and Customer,
including daily and monthly summaries, reflecting Shares purchased and
redeemed, including dates and prices for all transactions and Share balances;
and
(x) preparing and delivering to Plans and Customers periodic account
statements showing for each Plan and Customer, respectively, the total number
of Shares of a Fund held as of the statement closing date, purchases and
redemptions of Shares during the statement period and dividends and other
distributions paid during the statement period including dates and prices for
all transactions.
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Shareholder Services
(i) responding to Plan and Customer inquiries; providing information
on Plan and Customer investments; and providing other shareholder liaison
services;
(ii) 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 already employed by you) as
may be reasonably necessary or beneficial in order to provide services to Plans
and Customers under this Agreement;
(iii) sending confirmations of orders to the Plans and Customers to
the extent required by law and paying any expenses in connection therewith;
(iv) using all reasonable efforts to ensure that taxpayer
identification numbers provided by you on behalf of the Plans and Customers are
correct; and
(v) providing the Plans 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 law.
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SCHEDULE B
Operating Procedures
(i) Each Fund will make available its net asset value per Share each
Business Day as soon as reasonably practicable after calculation. The Fund will
use its best efforts to make such determination available by 6:00 p.m., Eastern
time, but in no event later than 7:00 p.m., Eastern time.
(ii) For orders placed with a Fund for investment at the prior
Business Day's net asset value per Share (the Business day of the order being
referred to as "T+1"):
(a) orders must be communicated to us or the Fund's transfer
agent by 9:00 a.m., Eastern time, on T + 1, and
(b) payment for such orders must be in federal funds
transmitted by wire initiated by 12:00 p.m., Eastern time, on T + 1 by either
you or us, as applicable.
(iii) Issuance and transfer of Shares will be by book entry only.
Share certificates will not be issued by the Funds unless specifically
requested by you and agreed to by the relevant Fund.
(iv) CSI will make available reports as to the states and
jurisdictions in which we believe Shares of the Funds are qualified for sale
under, or are exempt from the requirements of, the respective securities laws
of such states and jurisdictions. These reports will be updated periodically.
(v) The Funds will make available confirmation of executed orders the
next Business Day following receipt of the order from you. Confirmation may be
in written or verbal form. You must promptly inform CSI of any discrepancies;
silence will be deemed to indicate agreement.
(vi) Each Fund will furnish notice of the declaration of any dividends
or other distributions payable by it. This information will include the ex,
record and payable dates along with the Shares' reinvestment price. Typically,
this notice will be given by fax transmission, but may be given by other means
as may be reasonable under the circumstances.
(vii) Dividends and distributions of a Fund will be automatically
reinvested, unless otherwise indicated in writing by you, at net asset value
per Share of the Fund in accordance with the Fund's Prospectus.
(viii) The Funds will prepare Account statements on a calendar quarter
basis.
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SCHEDULE C
FEES
Total Annual Fee as % of
Average Daily Net Assets of
Name of Fund Customers held:
------------ ---------------------------
Warburg Pincus
Strategic Value
Service Provider:_____________________
Approved By:_____________________
Name:_____________________
Title:_____________________
Date:_____________________
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Fees will be computed by CSI and paid quarterly. 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.
For purposes of determining the Fees payable hereunder, the average
net assets of the Plans' and Customers' 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 Shares for purposes of purchases and redemptions. Fees payable
hereunder shall only be paid with respect to assets serviced by you and not by
any other financial institution and/or any of your affiliates. You will not at
any time include or permit to be included in the calculation of Customers' or
Plans' Shares or fees due from CSI or any affiliate thereof pursuant to this
Agreement, Shares with respect to which a fee is being paid by CSI to a party
other than you or which are otherwise the subject of a similar agreement,
whether such agreement is in place on the date hereof or entered into at some
future date.
In computing your fee, the applicable fee rate set forth above
(multiplied by the actual number of days elapsed during the period and divided
by 365) shall be applied to the average aggregate quarterly net asset value of
Shares of the applicable Funds in accounts for which you provide services for
the period in question. Each quarterly fee shall be determined independently of
every other quarterly fee. For the quarter 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 such quarter. 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.
