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")
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 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.
A-3
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:
Service Provider:_____________________
Approved By:_____________________
Name:_____________________
Title:_____________________
Date:_____________________
C-1
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.
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WARBURG PINCUS ADVISOR FUNDS SERVICES AGREEMENT
Gentlemen:
We, Counsellors Securities Inc. ("CSI"), have an agreement (the
"Distribution Agreement") with the several open-end management investment
companies, or series thereof, for which Warburg, Xxxxxx Counsellors, Inc.
("Counsellors") provides investment advisory services which are listed on
Appendix A hereto, as amended from time to time (the "Funds"). Pursuant to the
Distribution Agreements, we act as the distributor of shares of each Fund's
common stock or beneficial interest, as the case may be, par value $.001 per
share, designated Series 2 Shares or Advisor Shares (collectively, "Advisor
Shares"). This is to confirm that, in consideration of the agreements
hereinafter contained, we have agreed that the company that is the counterparty
to this Agreement (the "Service Organization") shall provide certain services in
connection with the Advisor Shares. We acknowledge that Advisor Shares may be
sold directly to certain employee benefit and retirement plans ("Plans") that
include or propose to include one or more 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
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 to investors in the
Funds ("Customers"), Plans and Plan participants the administrative, shareholder
and/or other services set forth on Schedule A hereto, as amended from time to
time. If Service Organization is not a banking organization that is prohibited
from performing such services (a "Bank"), Service Organization also agrees to
provide the distribution and marketing services set forth on Schedule A hereto.
In providing such services, Service Organization shall not, except as
specifically provided herein, have any authority to act as agent for CSI or any
Fund, but shall act only as agent of the Plans, 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 Funds, Counsellors or CSI.
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"), the
Securities Exchange Act of 1934 (the "1934 Act") and the rules thereunder. Upon
request by a Fund or CSI, Service Organization agrees to
promptly make copies or, if required, originals of such of these records
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 Funds, Counsellors and CSI
with 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 (including, without limitation, providing reports relating to blue
sky and other state securities laws and regulations) and with such other
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 Funds, 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 Funds, 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 Funds.
In the case of Service Organizations that are not banks, neither CSI,
Counsellors nor any Fund assumes any responsibility or obligation as to Service
Organization's right to sell Advisor Shares in any state or jurisdiction. Any
such Service Organization agrees that it will not offer or sell any Advisor
Shares to Plans, Customers or persons (i) 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, (ii) with respect
to whom such investment would not be suitable or appropriate under applicable
law or (iii) at any time after CSI or any Fund has provided you with written
notice that any Fund is not then currently offering Advisor Shares to the
public. 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.
CSI reserves the right in its sole discretion and without prior notice to
Service Organization to suspend sales or withdraw the offering of Advisor Shares
of each Fund.
Service Organization shall maintain at all times general liability and
other insurance coverage, including errors and omissions coverage, that is
reasonable and
-2-
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. In addition,
Service Organization shall promptly deliver to CSI such financial statements as
CSI may reasonably request concerning Service Organization's financial
condition; such statements shall fairly represent Service Organization's
financial condition as of the date thereof.
Each Fund and CSI 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 will be accepted by CSI 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 Funds; and Service Organization agrees to make available on a
monthly basis to CSI 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 CSI 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"), 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
Funds shall be in accordance with Schedule C, 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 CSI or a 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 HEREBY IS APPOINTED TO ACT, AND SERVICE
ORGANIZATION HEREBY AGREES TO ACT AS AGENT OF CSI FOR THE PURPOSE SPECIFICALLY
SET FORTH IN THIS
-3-
PARAGRAPH. Provided that Service Organization complies with
the foregoing, it shall be deemed to be an agent of CSI for the sole purpose of
receiving instructions as Plan and Customer 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 must be received at the time, and in the
manner, set forth in Schedule C, as amended from time to time. All orders are
subject to acceptance or rejection by CSI or the relevant 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. Each Fund may, if
necessary, delay redemption of Advisor Shares to the extent permitted by the
1940 Act.
3. Fees. (a) Each Fund has adopted a plan pursuant to Rule 12b-1
under the 1940 Act providing for paymnet of 12b-1 fee of up to .75% of the value
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"). In consideration of the services
and facilities provided by the Service Organization, CSI, on behalf of each
Fund, may pay to the Service Organization, and the Service Organization will
accept as full payment therefor, a fee in an amount obtained by multiplying the
applicable percentages set forth on Appendix A by the average daily net assets
of the Customers' Advisor Shares, which fee will be computed daily and payable
quarterly. The fee set forth above may include a service fee in the amount of
.25% of the average daily net assets of the Customers' Advisor Shares, which fee
will be computed daily and payable quarterly. Any such service fee shall be paid
to Service Organization solely for personal service and/or the maintenance of
shareholder accounts.
(b) 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. If in any period the aggregate amount payable to Service
Organization is less than $200, CSI may, in its discretion, defer the payment of
such amount until it, together with a subsequent payment or payments, exceeds
$200.
-4-
(c) 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.
(d) The fees paid pursuant to this Agreement shall be payable
only after, for so long as and to the extent that CSI has received an amount
equal to the fees payable to Service Organization from each Fund pursuant to
such Fund's Distribution Plan, as amended from time to time, adopted pursuant to
Rule 12b-1 under the 1940 Act.
4. Counsellors Securities' Responsibilities; Limitation of Liability for
Claims. Any printed information that is furnished to Service Organization other
than each Fund's Prospectus, 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 any Fund, and
Service Organization agrees that the Funds, the shareholders of the Funds and
the officers and governing Boards of the Funds shall have no liability or
responsibility to Service Organization in these respects. 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 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. 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 received amounts in excess of the amounts to which it
otherwise would have been 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
-5-
Plan participants and Customers. In no event, however,shall
Service Organization be liable to a 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 each Fund in which Service
Organization maintains an Account, 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. 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 each
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 or their 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), (b) a sale or offering of Advisor
Shares (i) 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, (ii) which is unsuited or otherwise inappropriate for any
Plan, Plan participant or Customer or (iii) at any time after CSI or any Fund
provides written notice that any Fund is not then currently offering Advisor
Shares to
-6-
the public. CSI agrees to and does 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 CSI or
its 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.
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 and receiving the
compensation 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 1934 Act and a transfer agent
under Section 17A of the 1934 Act and, in each case, 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; if Service Organization is not so registered, it is not
required to be so registered and will not be required to be so
registered in order to perform the services described in 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; and
-7-
(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.
9. Reports. Service Organization will furnish CSI, each 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 CSI, each Fund and its designees (including, without
limitation, any auditors designated by each Fund), in connection with the
preparation of reports to the Fund's governing Board concerning this Agreement
and the monies paid or payable by CSI, on behalf of 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 set forth
below. 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 respect to each Fund, with or without cause,
without penalty (i) 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 Advisor Shares of the Fund, or (ii) by CSI or 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 with respect to any Fund 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. Transactions Subject to Fund/SERV. Upon the execution of a
Fund/SERV Amendment to this Agreement, transactions in Fund shares may be
affected through Fund/SERV.
-8-
12. 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.
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.
13. 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.
14. 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:_____________ __, 199 By:________________________________
Name:
Title:
Effective as of:______________
-9-
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: ______________________
Telephone No.:__________________
Fax No.:
-10-
CAPITALIZED TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANING
SET FORTH IN THE BODY OF THE ADVISOR FUNDS SERVICES AGREEMENT.
APPENDIX A
Funds Fee Rate
Warburg Pincus Balanced Fund .50%
Warburg Pincus Capital Appreciation Fund .50%
Warburg Pincus Emerging Growth Fund .50%
Warburg Pincus Emerging Markets Fund .50%
Warburg Pincus Fixed Income Fund .25%
Warburg Pincus Health Sciences Fund .50%
Warburg Pincus Global Fixed Income Fund .50%
Warburg Pincus Growth & Income Fund .50%
Warburg Pincus Intermediate Maturity Government Fund .25%
Warburg Pincus International Equity Fund .50%
Warburg Pincus Japan Growth Fund .50%
Warburg Pincus Japan OTC Fund .50%
Warburg Pincus New York Intermediate Municipal Fund .25%
Warburg Pincus Post-Venture Capital Fund .50%
Warburg Pincus Small Comany Growth Fund .50%
Warburg Pincus Small Company Value Fund .50%
-11-
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) 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 positionsin Advisor Shares;
(iv) arranging for bank wires;
(v) providing sub-accounting with respect to Advisor Shares beneficially
owned by Plans, Plan participants and Customers;
A-1
(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
and as required by law, 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; and
(xiv) settle orders in accordance with the terms of the Prospectus and
Statement of the Fund.
A-2
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) sending confirmations of orders to the Plans and Plan participants and
Customers to the extent required by law 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-3
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.
A-4
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.
B-1
SCHEDULE C
Operating Procedures
1. Each Fund will make available its net asset value per share on a
daily basis as soon as reasonably practicable after the net asset value is
calculated. 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, each Business Day.
2. Each Fund will furnish notice of the declaration of any income,
dividends or capital gains distributions payable by it. This information will
include the ex, record and payable dates along with the Fund's 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.
3. Dividends and capital gains distributions will be automatically
reinvested at net asset value in accordance with the Fund's Prospectus.
4. For trades placed with a Fund the Business Day after a trade date
("T+1") for investment at the prior Business Day's net asset value:
(i) trade orders must be received before 4:00 p.m., Eastern time, by
the Service Organization on the trade date ("T"):
(ii) trade orders must be communicated to the relevant Fund by 10:00
a.m., Eastern time on T + 1, and
(iii) payment for such orders must be in federal funds transmitted by
wire. This wire must be initiated by 12:00 p.m., Eastern time on T + 1 by
either the Service Organization or CSI, as the case may be.
5. Issuance and transfer of the Fund's shares will be by book entry
only. Stock certificates will not be issued by the Funds unless specifically
requested by the Service Organization and agreed to by the relevant Fund.
6. CSI will make available reports as to the states and jurisdictions
in which we believe 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 as changes arise.
7. The Funds will make available confirmation of executed trades the
next Business Day following receipt of the trade from the Service Organization.
Confirmation may be in written or verbal form. If verbal, Service Organization
must promptly inform CSI of any discrepancies; silence will be deemed to
indicate agreement.
8. The Funds will make available account statements on a calendar
quarter basis.
C-1
