CO-ADMINISTRATION AGREEMENT
TERMS AND CONDITIONS
This Agreement is made as of _______ _, 1997 by and between
Warburg, Xxxxxx Institutional Fund, Inc., a Maryland corporation (the "Fund"),
and PFPC Inc. ("PFPC"), a Delaware corporation, which is an indirect, wholly
owned subsidiary of PNC Bank Corp.
The Fund is registered as an open-end investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund wishes
to retain PFPC to provide certain administration and accounting services with
respect to the Small Company Value Portfolio and any subsequent series of the
Fund that may be offered from time to time (each, the "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:
Definitions.
"Authorized Person." The term "Authorized Person" shall mean any officer of
the Fund and any other person, who is duly authorized by the Board of
Directors, to give Oral and Written Instructions on behalf of the Fund.
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 Fund's designation of
Authorized Persons may vary by service.
"Board of Directors." The Term "Board of Directors" shall mean the Fund's
Board of Directors or, where duly authorized, a competent committee
thereof.
"CFTC." The term "CFTC" shall mean the Commodities Futures Trading
Commission.
"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.
"PNC." The term "PNC" shall mean PNC Bank or a subsidiary or affiliate of
PNC Bank.
"SEC." The term "SEC" shall mean the Securities and Exchange Commission.
"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.
"Services." The term "Services" shall mean the service provided to the Fund
by PFPC.
"Shares." The terms "Shares" shall mean the shares of common stock, par
value $.001 per share, of the Portfolio.
"Property." The term "Property" shall mean:
any and all securities and other investment items which the Fund may from time
to time deposit, or cause to be deposited, with PNC or which PNC may from time
to time hold for the Fund;
all income in respect of any of such securities or other investment items;
all proceeds of the sale of any of such securities or investment items; and
all proceeds of the sale of securities issued by the Fund, which are received by
PNC from time to time, from or on behalf of the Fund.
"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.
Appointment.
The Fund hereby appoints PFPC to provide administration and
accounting services with respect to the Portfolio, in accordance with the terms
set forth in this Agreement. PFPC accepts such appointment and agrees to furnish
such services.
Delivery of Documents.
The Fund has provided or, where applicable, will provide PFPC
with the following:
certified or authenticated copies of the resolutions of the Board of
Directors, approving the appointment of PNC or its affiliates to provide
services with respect to the Portfolio;
a copy of the Fund's most recent effective registration statement with
respect to the Portfolio;
a copy of the Fund's advisory agreement or agreements with respect to
the Portfolio;
a copy of the Fund's distribution agreement or agreements with respect
to the Portfolio;
a copy of the Fund's co-administration agreement with respect to the
Portfolio if PFPC is not providing the Fund with such services;
copies of any shareholder servicing agreements made in respect of the
Fund with respect to the Portfolio; and
certified or authenticated copies of any and all amendments or supplements
to the foregoing.
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 Fund.
Instructions.
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 Fund's Board of
Directors or of the Fund's shareholders.
The Fund 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 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 Fund further agrees that
PFPC shall incur no liability to the Fund in acting upon Oral or Written
Instructions provided such instructions reasonably appear to have been received
from an Authorized Person.
Right to Receive Advice.
Advice of the Fund. 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 Fund.
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 Fund, the Portfolio's investment adviser (the "Adviser") or
PFPC, at the option of PFPC).
Conflicting Advice. In the event of a conflict between directions, advice
or Oral or Written Instructions PNC receives from the Fund, and the advice
it receives from counsel, PFPC shall be entitled to rely upon and follow
the advice of counsel.
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 Fund 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.
Records.
The book and records pertaining to the Portfolio, which are in
the possession of PFPC, shall be the property of the Fund. Such books and
records shall be prepared and maintained as required by the 1940 Act and other
applicable securities laws, rules and regulations. The Fund, or the Fund'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 Fund,
copies of any such books and records shall be provided by PFPC to the Fund or to
an Authorized Person of the Fund, at the Fund's expense.
PFPC shall keep the following records:
all books and records with respect to the Portfolio's books of account;
records of the Portfolio's securities transactions; and
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.
Confidentiality.
PPFC agrees to keep confidential all records of the Portfolio
and information relative to the Portfolio and its shareholders (past, present
and potential), unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such consent shall
not be unreasonably withheld. The Fund 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 Fund's consent prior to
disclosing such information.
Liaison with Accountants.
PFPC shall act as liaison with the Portfolio's 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 Fund from time to time.
Disaster Recovery.
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 Portfolio, take reasonable steps to minimize service
interruptions but shall have no liability with respect thereto.
Compensation.
As compensation for services rendered by PFPC during the term
of this Agreement, the Portfolio will pay to PFPC a fee or fees as may be agreed
to in writing by the Fund and PFPC.
Indemnification.
The Portfolio agrees 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 (a) at the request or on the direction of or in reliance on the
advice of the Fund or (b) upon Oral or Written Instructions. Neither PFPC, nor
any of its nominees, shall be indemnified against any liability to the Portfolio
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.
Responsibility of PFPC.
PFPC shall be under no duty to take any action on behalf of
the Fund 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 Portfolio 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.
Notwithstanding anything in this Agreement to the contrary,
PFPC shall have no liability to the Fund for any consequential, special or
indirect losses or damages which the Fund 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.
Description of Accounting Services.
Services on a Continuing Basis. PFPC will perform the following
accounting functions if required:
Journalize the Portfolio's investment, capital share and income and expense
activities;
Verify investment buy/sell trade tickets when received from the Adviser and
transmit trades to the Portfolio's custodian for proper settlement;
Maintain individual ledgers for investment securities;
Maintain historical tax lots for each security;
Reconcile cash and investment balances of the Portfolio with the custodian, and
provide the Adviser with the beginning cash balance available for investment
purposes;
Update the cash availability throughout the day as required by the Adviser;
Post to and prepare the Portfolio's Statement of Assets and Liabilities and the
Statement of Operations;
Calculate various contractual expenses (e.g., advisory and custody fees);
Monitor the expense accruals and notify Portfolio's management of any proposed
adjustments;
Control all disbursements from the Fund and authorize such disbursements upon
Written Instructions;
Calculate capital gains and losses;
Determine the Portfolio's net income;
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 Portfolio's
investments;
Transmit or mail a copy of the daily portfolio valuation to the Adviser;
Compute the net asset value of the Portfolio;
As appropriate, compute the Portfolio's yields, total return, expense ratios,
portfolio turnover rate, and, if required, portfolio average dollar-weighted
maturity; and
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.
Description of Administration Services.
Services on a Continuing Basis.
Prepare quarterly broker security transactions summaries;
Prepare monthly security transaction listings;
Prepare for execution and file the Fund's federal and state tax returns;
Prepare and file the Portfolio's semi-annual reports with the SEC on Form N-SAR;
Prepare and file with the SEC the Portfolio's annual and semiannual shareholder
reports;
Assist with the preparation of registration statements and other filings
relating to the registration of Shares;
and
Monitor the Fund's status as a regulated investment company under Sub-Chapter M
of the Internal Revenue Code of 1986, as amended.
Duration and Termination.
This Agreement shall continue until terminated by the Fund or
by PFPC on sixty (60) days' prior written notice to the other party.
Notices.
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 Fund, at the address of the Fund; 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.
Amendments.
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.
Delegation.
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 (a) PFPC gives the Fund thirty (30) days' prior written notice;
(b) the delegate agrees with PFPC to comply with all relevant provisions of the
1940 Act; and (c) PFPC and such delegate promptly provide such information as
the Fund may request, and respond to such questions as the Fund may ask,
relative to the delegation, including (without limitation) the capabilities of
the delegate.
Counterparts.
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.
Further Actions.
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
Miscellaneous.
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.
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:__________________________
Name:
Title:
WARBURG, XXXXXX INSTITUTIONAL
FUND, INC.
By:__________________________
Name:
Title:
APPENDIX A
None.
_______ _, 1997
Warburg, Xxxxxx Institutional Fund, Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
RE: CO-ADMINISTRATION SERVICE FEES
Ladies and 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 "Fund"), on
behalf of the Small Company Value Portfolio (the "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 Portfolio, including, but not
limited to: postage and handling, telephone, telex, FedEx and outside pricing
service charges.
The annual administration and accounting fee with respect to
the Small Company Value Portfolio shall be .10% of the Portfolio's first $500
million in average daily net assets, .075% of the next $1 billion in average
daily net assets and .05% of average daily net assets over $1.5 billion.
In each month the Portfolio shall pay to PFPC the asset based
fee as calculated above. 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.
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:________________________
Name:
Title:
Accepted:
WARBURG, XXXXXX INSTITUTIONAL FUND, INC.
By:___________________________
Name:
Title:
