<PAGE> 1
As filed with the U.S. Securities and Exchange Commission
on August 14, 1998
Securities Act File No. 333-60677
Investment Company Act File No. 811-08937
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [x]
Pre-Effective Amendment No. 1 [x]
Post-Effective Amendment No.__ [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 [x]
Amendment No. 1 [x]
(Check appropriate box or boxes)
Warburg, Pincus Emerging Markets II Fund, Inc.
.......................................
(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue
New York, New York 10017-3147
........................................................
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 878-0600
Mr. Eugene P. Grace
Warburg, Pincus Emerging Markets II Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
......................................
(Name and Address of Agent for Service)
Copy to:
Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
<PAGE> 2
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement.
Title of Securities Being Registered
Common Stock, $.001 par value per share.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended (the "1933 Act"), or
until the Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
<PAGE> 3
WARBURG, PINCUS EMERGING MARKETS II FUND, INC.
FORM N-1A
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Part A
Item No. Prospectus Heading
- -------- ------------------
<S> <C>
1. Cover Page.................................................... Cover Page
2. Synopsis...................................................... The Funds' Expenses
3. Condensed Financial Information............................... Not applicable
4. General Description of
Registrant.................................................. Cover Page; Investment Objectives and
Policies; Risk Factors and Special
Considerations and Certain Investment
Strategies; Investment Guidelines;
General Information
5. Management of the Fund........................................ Management of the Funds
6. Capital Stock and Other
Securities.................................................. General Information
7. Purchase of Securities Being
Offered..................................................... How to Open an Account; How to
Purchase Shares; Management of the
Funds; Net Asset Value
8. Redemption or Repurchase...................................... How to Redeem and Exchange Shares
9. Pending Legal Proceedings..................................... Not applicable
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Part B
Item No.
- --------
<S> <C>
10. Cover Page.................................................... Cover Page
11. Table of Contents............................................. Contents
12. General Information and History............................... Directors and Officers
13. Investment Objectives
and Policies................................................ Common Investment Objectives and
Policies
14. Management of the Registrant.................................. Directors and Officers
15. Control Persons and Principal
Holders of Securities....................................... Directors and Officers; See
Prospectus -- "Management of the Funds"
16. Investment Advisory and
Other Services.............................................. Investment Advisory and Servicing
Arrangements; See Prospectus --
"Management of the Funds"
17. Brokerage Allocation
and Other Practices......................................... Common Investment Policies --
Portfolio Transactions; See
Prospectus -- "Portfolio Transactions
and Turnover Rate"
18. Capital Stock and Other
Securities.................................................. Additional Information Concerning the
Company Shares; See
Prospectus -- "General Information"
19. Purchase, Redemption and Pricing
of Securities Being Offered................................. Purchase and Redemption Information;
See
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
Prospectus -- "How to Open an
Account," "How to Purchase Shares,"
"How to Redeem and Exchange Shares,"
"Net Asset Value"
20. Tax Status.................................................... Taxes; See Prospectus -- "Dividends,
Distributions and Taxes"
21. Underwriters.................................................. Common Investment Policies -- Portfolio
Transactions; See Prospectus --
"Management of the Funds"
22. Calculation of Performance Data............................... Performance and Yield Information
23. Financial Statements.......................................... Financial Statements; Report of
PricewaterhouseCoopers LLP,
Independent Accountants
</TABLE>
Part C
Information required to be included in Part C is set forth after the appropriate
item, so numbered, in Part C to this Registration Statement.
<PAGE> 6
The Prospectuses and Statements of Additional Information are incorporated by
reference to the original registration statement filed on August 5, 1998.
<PAGE> 7
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements --
(1) Financial Statements included in Part B.(1)
(a) Report of PricewaterhouseCoopers LLP,
Independent Accountants. (1)
(b) Statement of Net Assets and Liabilities. (1)
(b) Exhibits:
Exhibit No. Description of Exhibit
1 Articles of Incorporation. (2)
2 By-Laws. (2)
3 Not applicable.
4 Registrant's Forms of Stock Certificates.
5(a) Form of Investment Advisory Agreement.
(b) Form of Sub-Investment Advisory Agreement
with Credit Suisse Asset Management
Limited.
6 Form of Distribution Agreement.
7 Not applicable.
8 Custodian Agreement with Brown Brothers
Harriman & Co.
9(a) Transfer Agency and Service Agreement.*
(b) Form of Co-Administration Agreement with
Counsellors Funds Service, Inc.
(c) Form of Co-Administration Agreement with
PFPC Inc.
10(a) Opinion and Consent of Willkie Farr &
Gallagher, counsel to the Fund.
(b) Opinion and Consent of Venable, Baetjer
and Howard, LLP, Maryland counsel to the
Fund.
11 Consent of PricewaterhouseCoopers LLP,
Independent Accountants.
[/R]
- --------
(1) To be filed by amendment.
(2) Incorporated by reference to Registrant's Registration Statement on Form
N-1A filed on August 5, 1998 (Securities Act File No. 333-60677.
<PAGE> 8
12 Not applicable.
13 Form of Purchase Agreement.
14 Not applicable
15(a) Form of Shareholder Servicing and
Distribution Plan.
(b) Form of Distribution Plan.
16 Not applicable.
17 Not applicable.
18 Form of 18f-3 Plan.
Item 25. Persons Controlled by or Under Common Control
with Registrant
From time to time, Warburg Pincus Asset Management, Inc.
("Warburg") may be deemed to control the Fund and other registered investment
companies it advises through it beneficial ownership of more than 25% of the
relevant fund's shares on behalf of discretionary advisory clients. Warburg has
seven wholly-owned subsidiaries: Counsellors Securities Inc., a New York
corporation; Counsellors Funds Service, Inc., a Delaware corporation;
Counsellors Agency Inc., a New York corporation; Warburg, Pincus Investments
International (Bermuda), Ltd., a Bermuda corporation; Warburg, Pincus Asset
Management International, Inc. a Delaware corporation; Warburg Pincus Asset
Management (Japan), Inc., a Japanese corporation; and Warburg Pincus Asset
Management (Dublin) Limited, an Irish corporation.
Item 26. Number of Holders of Securities
It is anticipated that Warburg will hold all Registrant's
shares of common stock, par value $.001 per share, on the date Registrant's
Registration Statement becomes effective.
Item 27. Indemnification
Registrant, officers and directors of Warburg, of Counsellors
Securities Inc. ("Counsellors Securities") and of Registrant are covered by
insurance policies indemnifying them for liability incurred in connection with
the operation of Registrant. Discussion of this coverage is incorporated by
reference to Item 27 of Part C of the Fund's initial Registration Statement on
Form N-1A on August 5, 1998.
<PAGE> 9
Item 28. (a) Business and Other Connections of
Investment Adviser
BEA Associates ("BEA") acts as investment adviser to
the Registrant. BEA renders investment advice to a wide variety of individual
and institutional clients. The list required by this Item 28 of officers and
directors of BEA,
<PAGE> 10
together with information as to their other business, profession, vocation or
employment of a substantial nature during the past two years, is incorporated by
reference to Schedules A and D of Form ADV filed by BEA (SEC File No.
801-37170).
(b) Business and Other Connections of Sub-Investment
Adviser and Administrator
Credit Suisse Asset Management Limited (London) ("Credit
Suisse") act as sub-investment adviser for the Registrant. Credit Suisse renders
investment advice and provides full-service private equity programs to clients.
The list required by this Item 28 of officers and partners of Credit Suisse,
together with information as to their other business, profession, vocation or
employment of a substantial nature during the past two years, is incorporated by
reference to schedules A and D of Form ADV filed by Credit Suisse (SEC File No.
801-40177).
Item 29. Principal Underwriter
(a) Counsellors Securities will act as distributor for
Registrant, as well as for Warburg Pincus Balanced Fund; Warburg Pincus Capital
Appreciation Fund; Warburg Pincus Cash Reserve Fund; Warburg Pincus Central and
Eastern Europe Fund; Warburg Pincus Emerging Growth Fund; Warburg Pincus
Emerging Markets Fund; Warburg Pincus Emerging Markets II Fund; Warburg Pincus
European Equity Fund; Warburg Pincus Fixed Income Fund; Warburg Pincus Global
Fixed Income Fund; Warburg Pincus Global Post-Venture Capital Fund; Warburg
Pincus Global Telecommunications Fund; Warburg Pincus Growth & Income Fund;
Warburg Pincus Health Sciences Fund; Warburg Pincus High Yield Fund; Warburg
Pincus Institutional Fund; Warburg Pincus Intermediate Maturity Government Fund;
Warburg Pincus International Equity Fund; Warburg Pincus International Growth
Fund; Warburg Pincus International Small Company Fund; Warburg Pincus Japan
Growth Fund; Warburg Pincus Japan OTC Fund; Warburg Pincus Long-Short Equity
Fund; Warburg Pincus Long-Short Market Neutral Fund; Warburg Pincus Major
Foreign Markets Fund; Warburg Pincus Money Market Fund; Warburg Pincus Municipal
Bond Fund; Warburg Pincus New York Intermediate Municipal Fund; Warburg Pincus
New York Tax Exempt Fund; Warburg Pincus Post-Venture Capital Fund; Warburg
Pincus Select Economic Value Equity Fund; Warburg Pincus Small Company Growth
Fund; Warburg Pincus Small Company Value Fund; Warburg Pincus Strategic Global
Fixed Income Fund; Warburg Pincus Strategic Value Fund; Warburg Pincus Tax Free
Money Market Fund; Warburg Pincus Trust; Warburg Pincus Trust II; Warburg Pincus
U.S. Core Fixed Income Fund and Warburg Pincus U.S. Core Equity Fund.
(b) For information relating to each director, officer
or partner of Counsellors Securities, reference is made to Form BD (SEC File No.
8-32482) filed by Counsellors Securities under the Securities Exchange Act of
1934.
<PAGE> 11
(c) None.
Item 30. Location of Accounts and Records
(1) Warburg, Pincus Emerging Markets II
Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(Fund's Articles of Incorporation, By-Laws and minute
books)
(2) BEA Associates
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(records relating to its functions as
investment adviser)
(3) PFPC Inc.
400 Bellevue Parkway
Wilmington, Delaware 19809
(records relating to its functions as
co-administrator)
(4) Counsellors Funds Service, Inc.
466 Lexington Avenue
New York, New York 10017-3147
(records relating to its functions as
co-administrator)
(5) State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
(records relating to its functions as transfer agent
and dividend disbursing agent)
(7) Boston Financial Data Services, Inc.
2 Heritage Drive
North Quincy, Massachusetts 02171
(records relating to its functions as transfer agent
and dividend disbursing agent)
(8) Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
(records relating to its functions as custodian)
(9) Counsellors Securities Inc.
466 Lexington Avenue
New York, New York 10017-3147
(records relating to its functions as distributor)
<PAGE> 12
(10) Credit Suisse Asset Management-London
Beaufort House, 15 St. Botolph Street,
London, Great Britain EC3A 7JJ
(records relating to its functions as sub-
investment adviser)
Item 31. Management Services
Not applicable.
Item 32. Undertakings.
(a) Registrant hereby undertakes to furnish each person to whom
a prospectus is delivered with a copy of the latest annual report to
shareholders for the Fund, upon request and without charge.
(b) Registrant hereby undertakes to call a meeting of its
shareholders for the purpose of voting upon the question of removal of a
director or directors of Registrant when requested in writing to do so by the
holders of at least 10% of Registrant's outstanding shares. Registrant
undertakes further, in connection with the meeting, to comply with the
provisions of Section 16(c) of the 1940 Act relating to communications with the
shareholders of certain common-law trusts.
(c) Registrant hereby undertakes not to sell its shares to the
public, except in connection with the reorganization, until the Fund files a
post-effective amendment to its registration statement including audited
financial statements.
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and the State of New York, on the 14th day of August, 1998.
WARBURG, PINCUS EMERGING MARKETS II
FUND, INC.
By:/s/Eugene L. Podsiadlo
----------------------
Eugene L. Podsiadlo
President
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment has been signed below by the following persons in the
capacities and on the date indicated:
@@
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/John L. Furth Chairman of the Board of August 14, 1998
- ----------------
John L. Furth Directors August 14, 1998
/s/Eugene L. Podsiadlo President August 14, 1998
- ----------------------
Eugene L. Podsiadlo
/s/Howard Conroy Vice President and Chief August 14, 1998
- ---------------- Financial Officer
Howard Conroy
/s/Daniel S. Madden Treasurer and Chief August 14, 1998
- ------------------- Accounting Officer
Daniel S. Madden
/s/Richard N. Cooper Director August 14, 1998
- --------------------
Richard N. Cooper
/s/Jack W. Fritz Director August 14, 1998
- ----------------
Jack W. Fritz
/s/Jeffrey E. Garten Director August 14, 1998
- --------------------
Jeffrey E. Garten
/s/Arnold M. Reichman Director August 14, 1998
- ---------------------
Arnold M. Reichman
/s/Alexander B. Trowbridge Director August 14, 1998
- --------------------------
Alexander B. Trowbridge
</TABLE>
@@
<PAGE> 14
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
4 Registrant's Forms of Stock Certificates.
5(a) Form of Investment Advisory Agreement.
5(b) Form of Sub-Investment Advisory Agreement with Credit
Suisse Asset Management Limited.
6 Form of Distribution Agreement.
8 Custodian Agreement with Brown Brothers Harriman &
Co.
9(a) Transfer Agency and Service Agreement.
9(b) Form of Co-Administration Agreement with Counsellors
Funds Service, Inc.
9(c) Form of Co-Administration Agreement with PFPC Inc.
10(a) Opinion and Consent of Willkie Farr & Gallagher,
counsel to the Fund.
10(b) Opinion and Consent of Venable, Baetjer and Howard,
LLP, Maryland counsel to the Fund.
11 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
13 Form of Purchase Agreement.
15(a) Form of Shareholder Servicing and Distribution Plan.
15(b) Form of Distribution Plan.
18 Form of 18f-3 Plan.
<PAGE> 1
Exhibit 4
<PAGE> 2
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
WARBURG, PINCUS EMERGING MARKETS II FUND, INC.
THE CORPORATION IS AUTHORIZED TO ISSUE THREE BILLION SHARES, PAR VALUE $.001.
SPECIMEN
<PAGE> 3
The Corporation is authorized to issue three or more classes of stock. The
Corporation will furnish to any stockholder on request and without charge a full
statement of the designation and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the stock of each class which the
Corporation is authorized to issue and, if the Corporation is authorized to
issue any preferred or special class in series, of the differences in the
relative rights and preferences between the shares of each series to the extent
they have been set and the authority of the Board of Directors to set the
relative rights and preferences of subsequent series.
<PAGE> 4
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
WARBURG, PINCUS EMERGING MARKETS II FUND, INC.
THE CORPORATION IS AUTHORIZED TO ISSUE ONE BILLION SHARES, PAR VALUE $.001.
DESIGNATED INSTITUTIONAL SHARES
SPECIMEN
<PAGE> 5
The Corporation is authorized to issue three or more classes of stock. The
Corporation will furnish to any stockholder on request and without charge a full
statement of the designation and any preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of the stock of each class which the
Corporation is authorized to issue and, if the Corporation is authorized to
issue any preferred or special class in series, of the differences in the
relative rights and preferences between the shares of each series to the extent
they have been set and the authority of the Board of Directors to set the
relative rights and preferences of subsequent series.
<PAGE> 1
Exhibit 5(a)
<PAGE> 2
INVESTMENT ADVISORY AGREEMENT
______________ ___, 1998
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Dear Sirs:
Warburg, Pincus [ ] Fund, Inc. (the "Fund"), a
corporation organized and existing under the laws of the State of Maryland,
herewith confirms its agreement with BEA Associates (the "Adviser"), a
partnership organized under the laws of New York, as follows:
1. Investment Description; Appointment
The Fund desires to employ the capital of the Fund by
investing and reinvesting in investments of the kind and in accordance with the
limitations specified in its Articles of Incorporation, as may be amended from
time to time, and in the Fund's Prospectus(es) and Statement(s) of Additional
Information as from time to time in effect (the "Prospectus" and "SAI,"
respectively), and in such manner and to such extent as may from time to time be
approved by the Board of Directors of the Fund. Copies of the Fund's Prospectus
and SAI have been or will be submitted to the Adviser. The Fund desires to
employ and hereby appoints the Adviser to act as investment adviser to the Fund.
The Adviser accepts the appointment and agrees to furnish the services for the
compensation set forth below.
2. Services as Investment Adviser
Subject to the supervision and direction of the Board of
Directors of the Fund, the Adviser will (a) act in strict conformity with the
Fund's Articles of Incorporation, the Investment Company Act of 1940 (the "1940
Act") and the Investment Advisers Act of 1940, as the same may from time to time
be amended (the "Advisers Act"), (b) manage the Fund's assets in accordance with
the Fund's investment objective and policies as stated in the Fund's Prospectus
and SAI, (c) make investment decisions for the Fund, (d) place purchase and sale
orders for securities on behalf of the Fund, (e) exercise voting rights in
respect of portfolio securities and other investments for the Fund, and (f)
monitor and evaluate the services provided by the Fund's investment
sub-adviser(s), if any, under the terms of the applicable investment
sub-advisory agreement. In providing those services, the Adviser will provide
investment research and supervision of the Fund's investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Fund's assets. In addition, the Adviser will furnish the
Fund with whatever statistical
<PAGE> 3
information the Fund may reasonably request with respect to the securities that
the Fund may hold or contemplate purchasing.
Subject to the approval of the Board of Directors of the Fund
and, where required by law, the Fund's shareholders, the Adviser may engage an
investment sub-adviser or sub-advisers to provide advisory services in respect
of the Fund and may delegate to such investment sub-adviser(s) the
responsibilities described in subparagraphs (b), (c), (d) and (e) above. In the
event that an investment sub-adviser's engagement has been terminated, the
Adviser shall be responsible for furnishing the Fund with the services required
to be performed by such investment sub-adviser(s) under the applicable
investment sub-advisory agreement(s) or arranging for a successor investment
sub-adviser(s) to provide such services on terms and conditions acceptable to
the Fund and the Fund's Board of Directors and subject to the requirements of
the 1940 Act.
3. Brokerage
In executing transactions for the Fund, selecting brokers or
dealers and negotiating any brokerage commission rates, the Adviser will use its
best efforts to seek the best overall terms available. In assessing the best
overall terms available for any portfolio transaction, the Adviser will consider
all factors it deems relevant including, but not limited to, breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and for transactions executed through
the broker or dealer in the aggregate. In selecting brokers or dealers to
execute a particular transaction and in evaluating the best overall terms
available, the Adviser may consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934,
as the same may from time to time be amended) provided to the Fund and/or other
accounts over which the Adviser or an affiliate exercises investment discretion.
4. Information Provided to the Fund
The Adviser will keep the Fund informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the Fund
from time to time with whatever information the Adviser believes is appropriate
for this purpose.
5. Disclosure Regarding the Adviser
(a) The Adviser has reviewed the disclosure about the Adviser
contained in the Fund's registration statement and represents and warrants that,
with respect to such disclosure about the Adviser or information related,
directly or indirectly, to the Adviser, such registration statement contains, as
of the
2
<PAGE> 4
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which is required to be stated therein or necessary
to make the statements contained therein not misleading.
(b) The Adviser agrees to notify the Fund promptly of (i) any
statement about the Adviser contained in the Fund's registration statement that
becomes untrue in any material respect, (ii) any omission of a material fact
about the Adviser in the Fund's registration statement which is required to be
stated therein or necessary to make the statements contained therein not
misleading, (iii) any reorganization or change in the Adviser, including any
change in its ownership or key employees, or (iv) any change in the membership
of the Adviser, as long as the Adviser is a partnership.
(c) Prior to the Fund or any affiliated person (as defined in
the 1940 Act, an "Affiliate") of the Fund using or distributing sales literature
or other promotional material referring to the Adviser ("Promotional Material"),
the Fund shall forward such material to the Adviser and shall allow the Adviser
reasonable time to review the material. The Adviser will not act unreasonably in
its review of Promotional Material and the Fund will use all reasonable efforts
to ensure that all Promotional Material used or distributed by or on behalf of
the Fund will comply with the requirements of the Advisers Act, the 1940 Act and
the rules and regulations promulgated thereunder.
(d) The Adviser has supplied the Fund copies of its Form ADV
with all exhibits and attachments thereto and will hereinafter supply the Fund,
promptly upon preparation thereof, copies of all amendments or restatements of
such document.
6. Compliance
(a) The Adviser agrees that it shall promptly notify the Fund
(i) in the event that the SEC or any other regulatory authority has censured its
activities, functions or operations; suspended or revoked its registration as an
investment adviser; or has commenced proceedings or an investigation that may
result in any of these actions, (ii) in the event that there is a change in the
Adviser, financial or otherwise, that adversely affects its ability to perform
services under this Agreement or (iii) upon having a reasonable basis for
believing that, as a result of the Adviser's investing the Fund's assets, the
Fund's investment portfolio has ceased to adhere to the Fund's investment
objectives, policies and restrictions as stated in the Prospectus or SAI or is
otherwise in violation of applicable law.
(b) The Fund agrees that it shall promptly notify the Adviser
in the event that the SEC has censured the Fund; placed
3
<PAGE> 5
limitations upon any of its activities, functions or operations; or has
commenced proceedings or an investigation that may result in any of these
actions.
(c) The Fund shall be given access to the records of the
Adviser at reasonable times solely for the purpose of monitoring compliance with
the terms of this Agreement and the rules and regulations applicable to the
Adviser relating to its providing investment advisory services to the Fund,
including without limitation records relating to trading by employees of the
Adviser for their own accounts and on behalf of other clients. The Adviser
agrees to cooperate with the Fund and its representatives in connection with any
such monitoring efforts.
7. Books and Records
(a) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records which it maintains for
the Fund are the property of the Fund and further agrees to surrender promptly
to the Fund any of such records upon request. The Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act and to preserve the
records required by Rule 204-2 under the Advisers Act for the period specified
therein.
(b) The Adviser agrees on behalf of itself and its employees
to treat confidentially and as proprietary information of the Fund all records
and other information relative to the Fund and prior, present or potential
shareholders and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder except after prior
notification to and approval in writing of the Fund, which approval shall not be
unreasonably withheld and may not be withheld where the Adviser may be exposed
to civil or criminal contempt proceedings for failure to comply or when
requested to divulge such information by duly constituted authorities.
(c) The Adviser hereby agrees to furnish to regulatory
authorities having the requisite authority any information or reports in
connection with services that the Adviser renders pursuant to this Agreement
which may be requested in order to ascertain whether the operations of the Fund
are being conducted in a manner consistent with applicable laws and regulations.
8. Standard of Care
The Adviser shall exercise its best judgment in rendering the
services listed in paragraphs 2, 3 and 4 above. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
in connection
4
<PAGE> 6
with the matters to which this Agreement relates, provided that nothing herein
shall be deemed to protect or purport to protect the Adviser against any
liability to the Fund or to shareholders of the Fund to which the Adviser would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Adviser's reckless disregard of its obligations and duties under this Agreement.
9. Compensation
In consideration of the services rendered pursuant to this
Agreement, the Fund will pay the Adviser an annual fee calculated at an annual
rate of [___%] of the Fund's average daily net assets. The fee for the period
from the date the Fund's initial registration statement is declared effective by
the Securities and Exchange Commission to the end of the year during which the
initial registration statement is declared effective shall be prorated according
to the proportion that such period bears to the full yearly period. Upon any
termination of this Agreement before the end of a year, the fee for such part of
that year shall be prorated according to the proportion that such period bears
to the full yearly period and shall be payable upon the date of termination of
this Agreement. For the purpose of determining fees payable to the Adviser, the
value of the Fund's net assets shall be computed at the times and in the manner
specified in the Fund's Prospectus or SAI.
10. Expenses
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement, including the fees payable to
any investment sub-adviser engaged pursuant to paragraph 2 of this Agreement.
The Fund will bear its proportionate share of certain other expenses to be
incurred in its operation, including: investment advisory and administration
fees; taxes, interest, brokerage fees and commissions, if any; fees of Directors
of the Fund who are not officers, directors, or employees of the Adviser or any
of its affiliates; fees of any pricing service employed to value shares of the
Fund; Securities and Exchange Commission fees and state blue sky qualification
fees; charges of custodians and transfer and dividend disbursing agents; the
Fund's proportionate share of insurance premiums; outside auditing and legal
expenses; costs of maintenance of the Fund's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings of the shareholders of
the Fund and of the officers or Board of Directors of the Fund; and any
extraordinary expenses.
5
<PAGE> 7
The Fund will be responsible for nonrecurring expenses which
may arise, including costs of litigation to which the Fund is a party and of
indemnifying officers and Directors of the Fund with respect to such litigation
and other expenses as determined by the Directors.
11. Services to Other Companies or Accounts
The Fund understands that the Adviser now acts, will continue
to act and may act in the future as investment adviser to fiduciary and other
managed accounts and to one or more other investment companies or series of
investment companies, and the Fund has no objection to the Adviser so acting,
provided that whenever the Fund and one or more other accounts or investment
companies or portfolios advised by the Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each entity. The Fund
recognizes that in some cases this procedure may adversely affect the size of
the position obtainable for the Fund. In addition, the Fund understands that the
persons employed by the Adviser to assist in the performance of the Adviser's
duties hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of the Adviser
or any affiliate of the Adviser to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature, provided that
doing so does not adversely affect the ability of the Adviser to perform its
services under this Agreement.
12. Term of Agreement
This Agreement shall continue until April 17, 2000 and
thereafter shall continue automatically for successive annual periods, provided
such continuance is specifically approved at least annually by (a) the Board of
Directors of the Fund or (b) a vote of a "majority" (as defined in the 1940 Act)
of the Fund's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the Board of Directors who are not
"interested persons" (as defined in said Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval. This Agreement is terminable, without penalty, on 60 days' written
notice, by the Board of Directors of the Fund or by vote of holders of a
majority of the Fund's shares, or upon 90 days' written notice, by the Adviser.
This Agreement will also terminate automatically in the event of its assignment
(as defined in said Act).
13. Representations by the Parties
(a) The Adviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act, a duly
6
<PAGE> 8
registered investment adviser in any and all states of the United States in
which the Adviser is required to be so registered and has obtained all necessary
licenses and approvals in order to perform the services provided in this
Agreement. The Adviser covenants to maintain all necessary registrations,
licenses and approvals in effect during the term of this Agreement.
(b) The Adviser represents that it has read and understands
the Prospectus and SAI and warrants that in investing the Fund's assets it will
use all reasonable efforts to adhere to the Fund's investment objectives,
policies and restrictions contained therein.
(c) The Adviser represents that it has adopted a written Code
of Ethics in compliance with Rule 17j-1 under the 1940 Act and will provide the
Fund with any amendments to such Code.
(d) The Fund represents that a copy of its Articles of
Incorporation, dated [ ], 1998, together with all amendments thereto, is
on file in the Department of Assessments and Taxation of the State of Maryland.
14. Miscellaneous
The Adviser represents that it is the sole owner of the name
and mark "BEA," as used with respect to investment vehicles or services. The
Adviser hereby grants to the Fund and its affiliates a non-exclusive license to
use the "BEA" name and mark in connection with the Fund, including, without
limitation, use of the "BEA" name and mark in any disclosure document,
advertisement, sales literature or other materials describing or promoting the
Fund. If the Adviser ceases to act as the investment adviser of the Fund's
shares, the Fund agrees that, at the Adviser's request, the Fund's license to
use the "BEA" name and mark will terminate and the Fund will take all necessary
action to discontinue any use of the "BEA" name and mark. The Adviser
acknowledges that the Fund has adopted the name "BEA Institutional Funds," in
connection with the offering of the Fund's Institutional Shares, with its
express permission.
The Adviser agrees that it will not use the name and mark
"Warburg Pincus" except in regulatory filings or as expressly permitted by the
Fund in writing.
7
<PAGE> 9
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, PINCUS [ ] FUND, INC.
By: _______________________
Name: _____________________
Title: ____________________
Accepted:
BEA ASSOCIATES
By: _______________________
Name: _____________________
Title: ____________________
8
<PAGE> 10
<TABLE>
<CAPTION>
- ------------------------------------- ------------------------------------------------------------------ -------------------------
FUND NAME INVESTMENT OBJECTIVE MANAGEMENT FEE+
- ------------------------------------- ------------------------------------------------------------------ -------------------------
<S> <C> <C>
International Growth Fund Seeks long-term appreciation of capital by investing primarily .80%
in equity securities of non-U.S. issuers.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Emerging Markets Growth Fund Seeks long-term appreciation of capital by investing primarily 1.00%*
in equity securities in emerging country markets.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
U.S. Core Equity Fund Seeks long-term appreciation of capital by investing primarily .75%
in U.S. equity securities.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
U.S. Core Fixed Income Fund Seeks high total return by investing primarily in domestic .375%
fixed-income securities consistent with comparable broad market
fixed income indices, such as the Lehman Brothers Aggregate Bond
Index.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
High Yield Fund Seeks high total return by investing primarily in high yield .70%
fixed income securities issued by corporations, governments and
agencies, both domestic and foreign.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Strategic Global Fixed Income Fund Seeks high total return by investing primarily in both foreign .50%*
and domestic fixed income securities.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Municipal Bond Fund Seeks high total return by investing primarily in municipal .70%
bonds issued by state and local authorities.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Global Telecommunications Fund Seeks long-term appreciation of capital by investing primarily 1.00%
in equity securities of telecommunications companies, both
foreign and domestic.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Select Economic Value Equity Fund Seeks long-term appreciation of capital by investing primarily .75%
in U.S. equity securities that the Adviser believes are
undervalued.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Long-Short Market Neutral Fund Seeks long-term capital appreciation while minimizing exposure 1.50%**
to general equity market risk by taking long positions in stocks
that the Adviser has identified as undervalued and short
positions in such stocks that the Adviser has identified as
overvalued.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
Long-Short Equity Fund Seeks a total return greater than that of the Standard & Poor's .10%
500 Composite Stock Price Index (the "S&P Index") by investing
in shares of the Long-Short Market Neutral Fund while
simultaneously utilizing S&P Index futures, options on S&P
Index futures and equity swap contracts to gain exposure to
the equity market as measured by the S&P Index.
- ------------------------------------- ------------------------------------------------------------------ -------------------------
</TABLE>
- ----------------------
+ As a percentage of average daily net assets.
* BEA will pay Credit Suisse Asset Management Limited, as sub-adviser to
the Emerging Markets Growth Fund and the Strategic Global Fixed Income
Fund, a quarterly fee equal to 30% of the net quarterly amount received
by BEA from each Fund for its services as the Fund's investment adviser.
** Represents a basic management fee that may be increased or decreased,
after the first year of operations, by applying a performance adjustment
formula ("Performance Adjustment"). The Performance Adjustment is
calculated monthly by comparing the Fund's investment performance to that
of the Salomon Smith Barney U.S. 1-Month Treasury Bill Index plus 5
percentage points. The maximum annualized Performance Adjustment is .50%.
For additional information regarding calculation of the Performance
Adjustment, see the Fund's Prospectus under "Management of the Funds."
<PAGE> 1
Exhibit 5(b)
<PAGE> 2
SUB-INVESTMENT ADVISORY AGREEMENT
_____________ ____, 1998
Credit Suisse Asset Management Limited
Beaufort House
15 St Botolph Street
London EC3A7JJ
Dear Sirs:
Warburg, Pincus [ ] Fund, Inc. (the "Fund"), a
corporation organized and existing under the laws of the State of Maryland, and
BEA Associates, as investment adviser to the Fund ("BEA"), herewith confirms
their agreement with Credit Suisse Asset Management Limited (the "Sub-Adviser"),
a corporation organized under the laws of England, as follows:
1. Investment Description; Appointment
The Fund desires to employ the capital of the Fund by
investing and reinvesting in securities of the kind and in accordance with the
limitations specified in the Fund's Articles of Incorporation, as may be amended
from time to time (the "Articles of Incorporation"), and in the Fund's
Prospectus(es) and Statement(s) of Additional Information, as from time to time
in effect (the "Prospectus" and "SAI," respectively), and in such manner and to
such extent as may from time to time be approved by the Board of Directors of
the Fund. Copies of the Prospectus, SAI and Articles of Incorporation have been
or will be submitted to the Sub-Adviser. The Fund agrees to provide the
Sub-Adviser copies of all amendments to the Prospectus and SAI on an on-going
basis. The Fund employs BEA as its investment adviser. BEA desires to employ and
hereby appoints the Sub-Adviser to act as its sub-investment adviser upon the
terms set forth in this Agreement. The Sub-Adviser accepts the appointment and
agrees to furnish the services set forth below for the compensation provided for
herein.
2. Services as Sub-Investment Adviser
(a) Subject to the supervision and direction of BEA, the
Sub-Adviser will assist BEA in providing investment advisory and portfolio
management advice to the Fund in accordance with (a) the Articles of
Incorporation, (b) the Investment Company Act of 1940, as amended (the "1940
Act"), and the Investment Advisers
<PAGE> 3
Act of 1940, as amended (the "Advisers Act"), and all applicable Rules and
Regulations of the Securities and Exchange Commission (the "SEC") and all other
applicable laws and regulations, and (c) the Fund's investment objective and
policies as stated in the Prospectus and SAI and investment parameters provided
by BEA from time to time. In connection therewith, the Sub-Adviser will assist
BEA in:
(i) providing a continuous investment program for
the Fund, including investment research and management with respect to
securities, investments, cash and cash equivalents in the Fund's
portfolio;
(ii) determining whether to purchase, retain or sell
securities and other investments (collectively, "Investments") on
behalf of the Fund. The Sub-Adviser is hereby authorized to execute, or
place orders for the execution of, Investments on behalf of the Fund;
(iii) assisting the custodian and accounting agent
for the Fund in determining or confirming, consistent with the
procedures and policies stated in the Prospectus and SAI, the value of
any Investments for which the custodian and accounting agent seek
assistance from or identify for review by the Sub-Adviser;
(iv) monitoring the execution of orders for the
purchase or sale of Investments and the settlement and clearance of
those orders;
(v) exercising voting rights in respect of
Investments; and
(vi) providing reports to the Fund's Board of
Directors for consideration at quarterly meetings of the Board on
Investments and furnishing the Fund's Board of Directors with such
periodic and special reports as the Fund may reasonably request.
(b) In connection with the performance of the services of
the Sub-Adviser provided for herein, the Sub-Adviser: (i) will furnish BEA with
such periodic and special reports as BEA may reasonably request, and (ii) may
contract at its own expense with third parties for the acquisition of research,
clerical services and other administrative services that would not require such
parties to be required to register as an investment adviser under the Advisers
Act; provided that the Sub-Adviser shall remain liable for the performance of
its duties hereunder.
2
<PAGE> 4
3. Execution of Transactions
(a) The Sub-Adviser will execute transactions for the Fund
only through brokers or dealers appearing on a list of brokers and dealers
approved by BEA. In executing transactions for the Fund, selecting brokers or
dealers and negotiating any brokerage commission rates, the Sub-Adviser will use
its best efforts to seek the best overall terms available. In assessing the best
overall terms available for any portfolio transaction, the Sub-Adviser will
consider all factors it deems relevant including, but not limited to, the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer and the
reasonableness of any commission for the specific transaction and for
transactions executed through the broker or dealer in the aggregate. In
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, to the extent that the execution
and price offered by more than one broker or dealer are comparable the
Sub-Adviser may consider any brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Sub-Adviser or to BEA for use on behalf of the Fund or other clients of the
Sub-Adviser or BEA.
(b) The Sub-Adviser will not effect orders for the purchase or
sale of securities on behalf of the Fund through brokers or dealers as agents.
(c) It is understood that the services of the Sub-Adviser are
not exclusive, and nothing in this Agreement shall prevent the Sub-Adviser from
providing similar services to other investment companies or from engaging in
other activities, provided that those activities do not adversely affect the
ability of the Sub-Adviser to perform its services under this Agreement. The
Fund and BEA further understand and acknowledge that the persons employed by the
Sub-Adviser to assist in the performance of its duties under this Agreement will
not devote their full time to that service. Nothing contained in this Agreement
will be deemed to limit or restrict the right of the Sub-Adviser or any
affiliate of the Sub-Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature, provided that doing
so does not adversely affect the ability of the Sub-Adviser to perform its
services under this Agreement.
(d) On occasions when the Sub-Adviser deems the purchase or
sale of a security to be in the best interest of the Fund as well as of other
investment advisory clients of the Sub-Adviser, the Sub-Adviser may, to the
extent permitted by applicable laws and regulations, but shall not be obligated
to, aggregate the securities to be so sold or purchased with those of its other
clients. In such event, allocation of the securities
3
<PAGE> 5
so purchased or sold, as well as the expenses incurred in the transaction, will
be made by the Sub-Adviser in a manner that is fair and equitable, in the
judgment of the Sub-Adviser, in the exercise of its fiduciary obligations to the
Fund and to such other clients. The Sub-Adviser shall provide to BEA and the
Fund all information reasonably requested by BEA and the Fund relating to the
decisions made by the Sub-Adviser regarding allocation of securities purchased
or sold, as well as the expenses incurred in a transaction, among the Fund and
the Sub-Adviser's other investment advisory clients.
(e) In connection with the purchase and sale of securities for
the Fund, the Sub-Adviser will provide such information as may be reasonably
necessary to enable the custodian and co-administrators to perform their
administrative and recordkeeping responsibilities with respect to the Fund.
4. Disclosure Regarding the Sub-Adviser
(a) The Sub-Adviser has reviewed the disclosure about the
Sub-Adviser contained in the Fund's registration statement and represents and
warrants that, with respect to such disclosure about the Sub-Adviser or
information related, directly or indirectly, to the Sub-Adviser, such
registration statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material fact which is
required to be stated therein or necessary to make the statements contained
therein not misleading.
(b) The Sub-Adviser agrees to notify BEA and the Fund promptly
of (i) any statement about the Sub-Adviser contained in the Fund's registration
statement that becomes untrue in any material respect, (ii) any omission of a
material fact about the Sub-Adviser in the Fund's registration statement which
is required to be stated therein or necessary to make the statements contained
therein not misleading, or (iii) any reorganization or change in the
Sub-Adviser, including any change in its ownership or key employees.
(c) Prior to the Fund or BEA or any affiliated person (as
defined in the 1940 Act, an "Affiliate") of either using or distributing sales
literature or other promotional material referring to the Sub-Adviser
("Promotional Material"), the Fund or BEA, where applicable, shall forward such
material to the Sub-Adviser and shall allow the Sub-Adviser reasonable time to
review the material. The Sub-Adviser will not act unreasonably in its review of
Promotional Material and the Fund or BEA, where applicable, will use all
reasonable efforts to ensure that all Promotional Material used or distributed
by or on behalf of the Fund or BEA will comply with the requirements of the
Advisers
4
<PAGE> 6
Act, the 1940 Act and the rules and regulations promulgated thereunder.
(d) The Sub-Adviser has supplied BEA and the Fund copies of
its Form ADV with all exhibits and attachments thereto and will hereinafter
supply BEA and the Fund, promptly upon preparation thereof, copies of all
amendments or restatements of such document.
5. Certain Representations and Warranties of the Sub-Adviser
(a) The Sub-Adviser represents and warrants that it is a duly
registered investment adviser under the Advisers Act, a duly registered
investment adviser in any and all states of the United States in which the
Sub-Adviser is required to be so registered and has obtained all necessary
licenses and approvals in order to perform the services provided in this
Agreement. The Sub-Adviser covenants to maintain all necessary registrations,
licenses and approvals in effect during the term of this Agreement.
(b) The Sub-Adviser represents that it has read and
understands the Prospectus and SAI and warrants that in investing the Fund's
assets it will use all reasonable efforts to adhere to the Fund's investment
objectives, policies and restrictions contained therein.
(c) The Sub-Adviser represents that it has adopted a written
Code of Ethics in compliance with Rule 17j-1 under the 1940 Act and will provide
the Fund with any amendments to such Code.
6. Compliance
(a) The Sub-Adviser agrees that it shall promptly notify BEA
and the Fund (i) in the event that the SEC or any other regulatory authority has
censured its activities, functions or operations; suspended or revoked its
registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions, (ii) in the event that
there is a change in the Sub-Adviser, financial or otherwise, that adversely
affects its ability to perform services under this Agreement or (iii) upon
having a reasonable basis for believing that, as a result of the Sub-Adviser's
investing the Fund's assets, the Fund's investment portfolio has ceased to
adhere to the Fund's investment objectives, policies and restrictions as stated
in the Prospectus or SAI or is otherwise in violation of applicable law.
5
<PAGE> 7
(b) BEA agrees that it shall promptly notify the Sub-Adviser
in the event that the SEC has censured BEA or the Fund; placed limitations upon
any of their activities, functions or operations; suspended or revoked BEA's
registration as an investment adviser; or has commenced proceedings or an
investigation that may result in any of these actions.
(c) The Fund and BEA shall be given access to the records of
the Sub-Adviser at reasonable times solely for the purpose of monitoring
compliance with the terms of this Agreement and the rules and regulations
applicable to the Sub-Adviser relating to its providing investment advisory
services to the Fund, including without limitation records relating to trading
by employees of the Sub-Adviser for their own accounts and on behalf of other
clients. The Sub-Adviser agrees to cooperate with the Fund and BEA and their
representatives in connection with any such monitoring efforts.
7. Books and Records
(a) In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Fund are the property of the Fund and further agrees to surrender
promptly to the Fund any of such records upon request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act and to
preserve the records required by Rule 204-2 under the Advisers Act for the
period specified therein.
(b) The Sub-Adviser hereby agrees to furnish to regulatory
authorities having the requisite authority any information or reports in
connection with services that the Sub-Adviser renders pursuant to this Agreement
which may be requested in order to ascertain whether the operations of the Fund
are being conducted in a manner consistent with applicable laws and regulations.
8. Provision of Information; Proprietary and Confidential
Information
(a) BEA agrees that it will furnish to the Sub-Adviser
information related to or concerning the Fund that the Sub-Adviser may
reasonably request.
(b) The Sub-Adviser agrees on behalf of itself and its
employees to treat confidentially and as proprietary information of the Fund all
records and other information relative to the Fund, BEA and prior, present or
potential shareholders and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder
except
6
<PAGE> 8
after prior notification to and approval in writing of the Fund, which approval
shall not be unreasonably withheld and may not be withheld where the Sub-Adviser
may be exposed to civil or criminal contempt proceedings for failure to comply
or when requested to divulge such information by duly constituted authorities.
(c) The Sub-Adviser represents and warrants that neither it
nor any affiliate will use the name of the Fund, BEA or any of their affiliates
in any prospectus, sales literature or other material in any manner without the
prior written approval of the Fund or BEA, as applicable.
9. Standard of Care
The Sub-Adviser shall exercise its best judgment in rendering
the services described herein. The Sub-Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Fund or BEA in
connection with the matters to which this Agreement relates, except that the
Sub-Adviser shall be liable for a loss resulting from a breach of fiduciary duty
by the Sub-Adviser with respect to the receipt of compensation for services;
provided that nothing herein shall be deemed to protect or purport to protect
the Sub-Adviser against any liability to the Fund or BEA or to shareholders of
the Fund to which the Sub-Adviser would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's reckless disregard
of its obligations and duties under this Agreement. The Fund and BEA understand
and agree that the Sub-Adviser may rely upon information furnished to it
reasonably believed by the Sub-Adviser to be accurate and reliable and, except
as herein provided, the Sub-Adviser shall not be accountable for loss suffered
by the Fund by reason of such reliance of the Sub-Adviser.
10. Compensation
In consideration of the services rendered pursuant to this
Agreement, BEA will pay the Sub-Adviser a quarterly fee equal to 30% of the net
quarterly amount received by BEA from the Fund for its services as the Fund's
investment adviser. The fee for the period from the date of this Agreement to
the end of the quarter during which this Agreement commenced shall be prorated
according to the proportion that such period bears to the full quarterly period.
Such fee shall be paid by BEA to the Sub-Adviser within ten (10) business days
after the last day of each quarter or, upon termination of this Agreement before
the end of a quarter, within ten (10) business days after the effective date of
such termination. Upon any termination of this Agreement before the end of a
quarter, the fee for such part of that
7
<PAGE> 9
quarter shall be prorated according to the proportion that such period bears to
the full quarterly period. For the purpose of determining fees payable to the
Sub-Adviser, the net quarterly advisory fee received by BEA from the Fund shall
be the advisory fee set forth in the Investment Advisory Agreement between BEA
and the Fund reduced by any applicable fee waivers or expense reimbursements
provided by BEA. The Sub-Adviser shall have no right to obtain compensation
directly from the Fund for services provided hereunder and agrees to look solely
to BEA for payment of fees due.
11. Expenses
(a) The Sub-Adviser will bear all expenses in connection with
the performance of its services under this Agreement, which shall not include
the Fund's expenses listed in paragraph 11(b).
(b) The Fund will bear certain other expenses to be incurred
in its operation, including: investment advisory and administration fees; taxes,
interest, brokerage fees and commissions, if any; fees of Directors of the Fund
who are not officers, directors, or employees of the Fund, BEA or the
Sub-Adviser or affiliates of any of them; fees of any pricing service employed
to value shares of the Fund; SEC fees, state Blue Sky qualification fees and any
foreign qualification fees; charges of custodians and transfer and dividend
disbursing agents; the Fund's proportionate share of insurance premiums; outside
auditing and legal expenses; costs of maintenance of the Fund's existence; costs
attributable to investor services, including, without limitation, telephone and
personnel expenses; costs of preparing and printing prospectuses and statements
of additional information for regulatory purposes and for distribution to
existing shareholders; costs of shareholders' reports and meetings of the
shareholders of the Fund and of the officers or Board of Directors of the Fund;
and any extraordinary expenses.
12. Term of Agreement
This Agreement shall commence on the date first written above
and shall continue until April 17, 2000, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (a) the Board of Directors of the
Fund or (b) a vote of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities, provided that in either event the continuance is
also approved by a majority of the Board of Directors who are not "interested
persons" (as defined the 1940 Act) of any party to this Agreement, by vote cast
in person at a meeting called for the purpose of voting on such approval. This
Agreement is terminable, without penalty, (i) by BEA on 60
8
<PAGE> 10
(sixty) days' written notice to the Fund and the Sub-Adviser, (ii) by the Board
of Directors of the Fund or by vote of holders of a majority of the Fund's
shares on 60 (sixty) days' written notice to BEA and the Sub-Adviser, or (iii)
by the Sub-Adviser upon 60 (sixty) days' written notice to the Fund and BEA.
This Agreement will also terminate automatically in the event of its assignment
(as defined in the 1940 Act) by any party hereto. In the event of termination of
this Agreement for any reason, all records relating to the Fund kept by the
Sub-Adviser shall promptly be returned to BEA or the Fund, free from any claim
or retention of rights in such records by the Sub-Adviser. In the event this
Agreement is terminated or is not approved in the foregoing manner, the
provisions contained in paragraph numbers 4(c), 7, 8 and 9 shall remain in
effect.
13. Amendments
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (a) the holders of a majority of the
outstanding voting securities of the Fund and (b) the Board of Directors of the
Fund, including a majority of Directors who are not "interested persons" (as
defined in the 1940 Act) of the Fund or of either party to this Agreement, by
vote cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
14. Notices
All communications hereunder shall be given (a) if to the
Sub-Adviser, to Credit Suisse Asset Management Limited, Beaufort House, 15 St
Botolph Street, London EC3A7JJ (Attention: [INSERT]), telephone: [INSERT],
telecopy: [INSERT], (b) if to BEA, to BEA Associates, One Citicorp Center, 153
East 53rd Street, New York, New York 10022 (Attention: [INSERT]), telephone:
[INSERT], telecopy: [INSERT], and (c) if to the Fund, c/o Warburg Pincus Funds,
466 Lexington Avenue, New York, New York 10017-3147, telephone: (212) 878-0600,
telecopy: (212) 878-9351 (Attention: President).
15. Choice of Law
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York in the United States,
including choice of law principles; provided that nothing herein shall be
construed in a manner inconsistent with the 1940 Act, the Advisers Act or any
applicable rules, regulations or orders of the SEC.
9
<PAGE> 11
16. Miscellaneous
(a) The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions herein or
otherwise affect their construction or effect.
(b) If any provision of this Agreement shall be held or made
invalid by a court decision, by statute or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(c) Nothing herein shall be construed to make the Sub-Adviser
an agent of BEA or the Fund.
(d) This Agreement may be executed in counterparts, with the
same effect as if the signatures were upon the same instrument.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
BEA ASSOCIATES
By: _________________________________
Name:
Title:
WARBURG, PINCUS [ ] FUND, INC.
By: _________________________________
Name:
Title:
CREDIT SUISSE ASSET
MANAGEMENT LIMITED
By: _______________________________
Name:
Title:
10
<PAGE> 1
Exhibit 6
<PAGE> 2
DISTRIBUTION AGREEMENT
_____________ ___, 1998
Counsellors Securities Inc.
466 Lexington Avenue
New York, New York 10017-3147
Ladies and Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, Warburg Pincus Fund (the "Fund") has
agreed that Counsellors Securities Inc. ("Counsellors Securities") shall be, for
the period of this Agreement, the distributor of shares of common stock of each
Fund, par value $.001 per share. The Fund's classes of common stock shall be
designated as in the Fund's Articles of Incorporation.
1. Services as Distributor
1.1 Counsellors Securities will act as agent for the
distribution of the Common Shares, Institutional Shares and Advisor Shares (the
"Shares") covered by the Fund's registration statement on Form N-1A, under the
Securities Act of 1933, as amended (the "1933 Act"), and the Investment Company
Act of 1940, as amended (the "1940 Act") (the registration statement, together
with the prospectuses (the "prospectus") and statements of additional
information (the "statement of additional information") included as part of the
registration statement, any amendments to the registration statement, and any
supplements to, or material incorporated by reference into the prospectus or
statement of additional information, being referred to collectively in this
Agreement as the "registration statement").
1.2 Counsellors Securities agrees to use appropriate efforts
to solicit orders for the sale of the Shares at such prices and on the terms and
conditions set forth in the registration statement and will undertake such
advertising and promotion as it believes is reasonable in connection with such
solicitation.
1.3 All activities by Counsellors Securities as distributor of
the Shares shall comply with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations made or adopted by the
Securities and Exchange Commission (the "SEC") or by any securities association
registered under the Securities Exchange Act of 1934, as amended.
1.4 Counsellors Securities agrees to (a) provide one or more
persons during normal business hours to respond to telephone questions
concerning the Fund and its performance, (b) provide prospectuses of other
Warburg Pincus Funds to shareholders considering exercising the exchange
privilege and
<PAGE> 3
(c) perform such other services as are described in the registration statement
and in the Shareholder Servicing and Distribution Plan (with respect to Common
Shares, the "12b-1 Plan") and in the Distribution Plan (with respect to Advisor
Shares, the "Distribution Plan"), each adopted by the Fund pursuant to Rule
12b-1 under the 1940 Act ("Rule 12b-1") to be performed by Counsellors
Securities, including, without limitation, distributing and receiving
subscription order forms and receiving written redemption requests.
1.5 Pursuant to the 12b-1 Plan, the Fund will pay Counsellors
Securities on the first business day of each quarter a fee for the previous
quarter calculated at an annual rate of .25% of the average daily net assets of
the Common Shares of the Fund as compensation for the services provided by
Counsellors Securities to the Common Shares pursuant to this Agreement.
Counsellors Securities serves without compensation as distributor for the
Institutional Shares and the Advisor Shares pursuant to this Agreement. Amounts
paid to Counsellors Securities under the 12b-1 Plan may be used by Counsellors
Securities to cover expenses that are primarily intended to result in, or that
are primarily attributable to, (a) the sale of the Common Shares, as set forth
in the 12b-1 Plan ("Selling Services"), (b) ongoing servicing and/or maintenance
of the accounts of holders of Common Shares, as set forth in the 12b-1 Plan
("Shareholder Services"), and/or (c) sub-transfer agency services, subaccounting
services or administrative services with respect to the Common Shares, as set
forth in the 12b-1 Plan ("Administrative Services" and collectively with Selling
Services and Administrative Services, "Services") including, without limitation,
(i) payments reflecting an allocation of overhead and other office expenses of
Counsellors Securities related to providing Services; (ii) payments made to, and
reimbursement of expenses of, persons who provide support services in connection
with the distribution of the Common Shares including, but not limited to, office
space and equipment, telephone facilities, answering routine inquiries regarding
the Fund, and providing any other Shareholder Services; (iii) payments made to
compensate selected dealers or other authorized persons for providing any
Services; (iv) costs relating to the formulation and implementation of marketing
and promotional activities for the Common Shares, including, but not limited to,
direct mail promotions and television, radio, newspaper, magazine and other mass
media advertising, and related travel and entertainment expenses; (v) costs of
printing and distributing prospectuses, statements of additional information and
reports of the Fund to prospective holders of Common Shares; and (vi) costs
involved in obtaining whatever information, analyses and reports with respect to
marketing and promotional activities for the Common Shares that the Fund may,
from time to time, deem advisable.
1.6 Counsellors Securities acknowledges that, whenever in the
judgment of the Fund's officers such action is warranted for any reason,
including, without limitation, market, economic
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<PAGE> 4
or political conditions, those officers may decline to accept any orders for, or
make any sales of, the Shares until such time as those officers deem it
advisable to accept such orders and to make such sales.
1.7 Counsellors Securities will act only on its own behalf as
principal should it choose to enter into selling agreements with selected
dealers or others.
1.8 Counsellors Securities will transmit any orders received
by it for purchase or redemption of the Shares to State Street Bank and Trust
Company ("State Street"), the Fund's transfer and dividend disbursing agent, or
its successor of which Counsellors Securities is notified in writing. The Fund
will promptly advise Counsellors Securities of the determination to cease
accepting orders or selling Common Shares, Institutional Shares or Advisor
Shares or to recommence accepting orders or selling Common Shares, Institutional
Shares or Advisor Shares. The Fund (or its agent) will confirm orders for the
Shares placed through Counsellors Securities upon their receipt, or in
accordance with any exemptive order of the SEC, and will make appropriate book
entries pursuant to the instructions of Counsellors Securities. Counsellors
Securities agrees to cause payment for the Shares and instructions as to book
entries to be delivered promptly to the Fund (or its agent).
1.9 The outstanding Shares are subject to redemption as set
forth in the prospectus. The price to be paid to redeem the Shares will be
determined as set forth in the prospectus.
1.10 Counsellors Securities will prepare and deliver reports
to the Treasurer of the Fund on a regular, at least quarterly, basis, showing
the distribution expenses incurred pursuant to this Agreement, the 12b-1 Plan
and the Distribution Plan adopted by the Fund pursuant to Rule 12b-1 and the
purposes therefor, as well as any supplemental reports as the Directors from
time to time may reasonably request.
2. Duties of the Fund
2.1 The Fund agrees at its own expense to execute any and all
documents, to furnish any and all information and to take any other actions that
may be reasonably necessary in connection with the sale of the Shares in those
states that Counsellors Securities may designate.
2.2 The Fund shall furnish from time to time, for use in
connection with the sale of the Shares, such informational reports with respect
to the Fund and the Shares as Counsellors Securities may reasonably request, all
of which shall be signed by one or more of the Fund's duly authorized officers;
and the Fund warrants that the statements contained in any such reports, when so
signed by one or more of the Fund's officers, shall be true and correct. The
Fund shall also furnish Counsellors
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<PAGE> 5
Securities upon request with: (a) annual audits of the Fund's books and accounts
made by independent public accountants regularly retained by the Fund, (b)
semiannual unaudited financial statements pertaining to the Fund, (c) quarterly
earnings statements prepared by the Fund, (d) a monthly itemized list of the
securities held by the Fund, (e) monthly balance sheets as soon as practicable
after the end of each month and (f) from time to time such additional
information regarding the Fund's financial condition as Counsellors Securities
may reasonably request.
3. Representations and Warranties
The Fund represents to Counsellors Securities that all
registration statements, prospectuses and statements of additional information
filed by the Fund with the SEC under the 1933 Act and the 1940 Act with respect
to the Common Shares, Institutional Shares and/or Advisor Shares have been
carefully prepared in conformity with the requirements of the 1933 Act, the 1940
Act and the rules and regulations of the SEC thereunder. As used in this
Agreement the terms "registration statement", "prospectus" and "statement of
additional information" shall mean any registration statement, prospectus and
statement of additional information filed by the Fund with respect to the Common
Shares, Institutional Shares and/or Advisor Shares with the SEC and any
amendments and supplements thereto which at any time shall have been filed with
the SEC. The Fund represents and warrants to Counsellors Securities that any
registration statement with respect to the Common Shares, Institutional Shares
and/or Advisor Shares, or prospectus and statement of additional information
contained therein, when such registration statement becomes effective, will
include all statements required to be contained therein in conformity with the
1933 Act, the 1940 Act and the rules and regulations of the SEC; that all
statements of fact contained in any registration statement with respect to the
Common Shares, Institutional Shares and/or Advisor Shares, prospectus or
statement of additional information will be true and correct when such
registration statement becomes effective; and that neither any registration
statement nor any prospectus or statement of additional information with respect
to the Common Shares, Institutional Shares and/or Advisor Shares when such
registration statement becomes effective will include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a purchaser of the
Common Shares, Institutional Shares and/or Advisor Shares. Counsellors
Securities may, but shall not be obligated to, propose from time to time such
amendment or amendments to any registration statement and such supplement or
supplements to any prospectus or statement of additional information as, in the
light of future developments, may, in the opinion of Counsellors Securities'
counsel, be necessary or advisable. If the Fund shall not propose such amendment
or amendments and/or supplement or supplements within fifteen (15) days after
receipt by the Fund of
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<PAGE> 6
a written request from Counsellors Securities to do so, Counsellors Securities
may, at its option, terminate this Agreement. The Fund shall not file any
amendment to any registration statement or supplement to any prospectus or
statement of additional information without giving Counsellors Securities
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Fund's right to file at any time
such amendments to any registration statement and/or supplements to any
prospectus or statement of additional information with respect to the Common
Shares, Institutional Shares and/or Advisor Shares, of whatever character, as
the Fund may deem advisable, such right being in all respects absolute and
unconditional.
4. Indemnification
4.1 The Fund agrees to indemnify, defend and hold Counsellors
Securities, its several officers and directors, and any person who controls
Counsellors Securities within the meaning of Section 15 of the 1933 Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims, demands
or liabilities and any counsel fees incurred in connection therewith) which
Counsellors Securities, its officers and directors, or any such controlling
person, may incur under the 1933 Act, the 1940 Act or common law or otherwise,
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any registration statement, any prospectus or any
statement of additional information with respect to the Common Shares,
Institutional Shares and/or Advisor Shares, or arising out of or based upon any
omission or alleged omission to state a material fact required to be stated in
any registration statement, any prospectus or any statement of additional
information with respect to the Common Shares, Institutional Shares and/or
Advisor Shares, or necessary to make the statements in any of them not
misleading; provided, however, that the Fund's agreement to indemnify
Counsellors Securities, its officers or directors, and any such controlling
person shall not be deemed to cover any claims, demands, liabilities or expenses
arising out of or based upon any statements or representations made by
Counsellors Securities or its representatives or agents other than such
statements and representations as are contained in any registration statement,
prospectus or statement of additional information with respect to the Common
Shares, Institutional Shares and/or Advisor Shares and in such financial and
other statements as are furnished to Counsellors Securities pursuant to
paragraph 2.2 hereof; and further provided that the Fund's agreement to
indemnify Counsellors Securities and the Fund's representations and warranties
hereinbefore set forth in paragraph 3 shall not be deemed to cover any liability
to the Fund or its shareholders to which Counsellors Securities would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of Counsellors
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<PAGE> 7
Securities' reckless disregard of its obligations and duties under this
Agreement. The Fund's agreement to indemnify Counsellors Securities, its
officers and directors, and any such controlling person, as aforesaid, is
expressly conditioned upon the Fund's being notified of any action brought
against Counsellors Securities, its officers or directors, or any such
controlling person, such notification to be given by letter or by telegram
addressed to the Fund at its principal office in New York, New York and sent to
the Fund by the person against whom such action is brought, within ten (10) days
after the summons or other first legal process shall have been served. The
failure to so notify the Fund of any such action shall not relieve the Fund from
any liability that the Fund may have to the person against whom such action is
brought by reason of any such untrue or alleged untrue statement or omission or
alleged omission otherwise than on account of the Fund's indemnity agreement
contained in this paragraph 4.1. The Fund's indemnification agreement contained
in this paragraph 4.1 and the Fund's representations and warranties in this
Agreement shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of Counsellors Securities, its officers and
directors, or any controlling person, and shall survive the delivery of any of
the Fund's shares. This agreement of indemnity will inure exclusively to
Counsellors Securities' benefit, to the benefit of its several officers and
directors, and their respective estates, and to the benefit of the controlling
persons and their successors. The Fund agrees to notify Counsellors Securities
promptly of the commencement of any litigation or proceedings against the Fund
or any of its officers or directors in connection with the issuance and sale of
any of the Common Shares, Institutional Shares and/or Advisor Shares.
4.2 Counsellors Securities agrees to indemnify, defend and
hold the Fund, its several officers and directors, and any person who controls
the Fund within the meaning of Section 15 of the 1933 Act, free and harmless
from and against any and all claims, demands, liabilities and expenses
(including the costs of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection therewith) that the
Fund, its officers or directors or any such controlling person may incur under
the 1933 Act, the 1940 Act or common law or otherwise, but only to the extent
that such liability or expense incurred by the Fund, its officers or directors
or such controlling person resulting from such claims or demands shall arise out
of or be based upon (a) any unauthorized sales literature, advertisements,
information, statements or representations or (b) any untrue or alleged untrue
statement of a material fact contained in information furnished in writing by
Counsellors Securities to the Fund specifically for use in the registration
statement and used in the answers to any of the items of the registration
statement or in the corresponding statements made in the prospectus or statement
of additional information, or shall arise out of or be based upon any omission
or alleged omission to state a material fact in connection with
-6-
<PAGE> 8
such information furnished in writing by Counsellors Securities to the Fund and
required to be stated in such answers or necessary to make such information not
misleading. Counsellors Securities' agreement to indemnify the Fund, its
officers and directors, and any such controlling person, as aforesaid, is
expressly conditioned upon Counsellors Securities' being notified of any action
brought against the Fund, its officers or directors, or any such controlling
person, such notification to be given by letter or telegram addressed to
Counsellors Securities at its principal office in New York, New York and sent to
Counsellors Securities by the person against whom such action is brought, within
ten (10) days after the summons or other first legal process shall have been
served. The failure to so notify Counsellors Securities of any such action shall
not relieve Counsellors Securities from any liability that Counsellors
Securities may have to the Fund, its officers or directors, or to such
controlling person by reason of any such untrue or alleged untrue statement or
omission or alleged omission otherwise than on account of Counsellors
Securities' indemnity agreement contained in this paragraph 4.2. Counsellors
Securities agrees to notify the Fund promptly of the commencement of any
litigation or proceedings against Counsellors Securities or any of its officers
or directors in connection with the issuance and sale of any of the Common
Shares, Institutional Shares and/or Advisor Shares.
4.3 In case any action shall be brought against any
indemnified party under paragraph 4.1 or 4.2, and it shall timely notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall wish to do so, to
assume the defense thereof with counsel satisfactory to such indemnified party.
If the indemnifying party opts to assume the defense of such action, the
indemnifying party will not be liable to the indemnified party for any legal or
other expenses subsequently incurred by the indemnified party in connection with
the defense thereof other than (a) reasonable costs of investigation or the
furnishing of documents or witnesses and (b) all reasonable fees and expenses of
separate counsel to such indemnified party if (i) the indemnifying party and the
indemnified party shall have agreed to the retention of such counsel or (ii) the
indemnified party shall have concluded reasonably that representation of the
indemnifying party and the indemnified party by the same counsel would be
inappropriate due to actual or potential differing interests between them in the
conduct of the defense of such action.
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<PAGE> 9
5. Effectiveness of Registration
None of the Shares shall be offered by either Counsellors
Securities or the Fund under any of the provisions of this Agreement and no
orders for the purchase or sale of the Common Shares, Institutional Shares or
Advisor Shares shall be accepted by the Fund if and so long as the effectiveness
of the registration statement shall be suspended under any of the provisions of
the 1933 Act or if and so long as the prospectus is not on file with the SEC;
provided, however, that nothing contained in this paragraph 5 shall in any way
restrict or have an application to or bearing upon the Fund's obligation to
repurchase its shares from any shareholder in accordance with the provisions of
the prospectus or statement of additional information.
6. Notice to Counsellors Securities
The Fund agrees to advise Counsellors Securities immediately
in writing:
(a) of any request by the SEC for amendments to the
registration statement, prospectus or statement of additional
information then in effect with respect to the Common Shares,
Institutional Shares and/or Advisor Shares or for additional
information;
(b) in the event of the issuance by the SEC of any
stop order suspending the effectiveness of the registration statement,
prospectus or statement of additional information then in effect with
respect to the Common Shares, Institutional Shares and/or Advisor
Shares or the initiation of any proceeding for that purpose;
(c) of the happening of any event that makes untrue
any statement of a material fact made in the registration statement,
prospectus or statement of additional information then in effect with
respect to the Common Shares, Institutional Shares and/or Advisor
Shares or that requires the making of a change in such registration
statement, prospectus or statement of additional information in order
to make the statements therein not misleading; and
(d) of all actions of the SEC with respect to any
amendment to any registration statement, prospectus or statement of
additional information with respect to the Common Shares, Institutional
Shares or Advisor Shares which may from time to time be filed with the
SEC.
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<PAGE> 10
7. Term of Agreement
This Agreement shall continue until April 17, 2000 with
respect to each of the Shares, and thereafter shall continue automatically for
successive annual periods ending on April 17th of each year, provided such
continuance is specifically approved at least annually by (a) a vote of a
majority of the Fund's Board of Directors or (b) a vote of a majority (as
defined in the 1940 Act) of each of the outstanding Common Shares, Institutional
Shares and Advisor Shares, respectively, provided that the continuance is also
approved by a vote of a majority of the Fund's Directors who are not interested
persons (as defined in the 1940 Act) of the Fund and who have no direct or
indirect financial interest in the operation of the 12b-1 Plan or the
Distribution Plan, in this Agreement or in any agreement related to the 12b-1
Plan or Distribution Plan ("Qualified Directors"), by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable with respect to the Common Shares, Institutional Shares or Advisor
Shares without penalty (a) on sixty (60) days' written notice, by a vote of a
majority of the Fund's Qualified Directors or by vote of a majority (as defined
in the 1940 Act) of the outstanding Common Shares, Institutional Shares or
Advisor Shares, as applicable, or (b) on ninety (90) days' written notice by
Counsellors Securities. This Agreement will also terminate automatically in the
event of its assignment (as defined in the 1940 Act).
8. Amendments
This Agreement may not be amended to increase materially the
amount of the fee with respect to the Common Shares described in Section 1.5
above without approval of at least a majority (as defined in the 1940 Act) of
the outstanding Common Shares. In addition, all material amendments to this
Agreement must be approved by vote of the Fund's Board of Directors, and by a
vote of a majority of the Qualified Directors, cast in person at a meeting
called for the purpose of voting on the approval.
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<PAGE> 11
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place below indicated,
whereupon it shall become a binding agreement between us.
Very truly yours,
WARBURG, PINCUS [ ]
FUND, INC.
By:
Name: __________________________
Title: _________________________
Accepted:
COUNSELLORS SECURITIES INC.
By:
Name: _____________________
Title: ____________________
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<PAGE> 1
Exhibit 8
<PAGE> 2
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
THE RBB FUND, INC.
<PAGE> 3
TABLE OF CONTENTS
1. Employment of Custodian 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian 1
2.1 Safekeeping 2
2.2 Manner of Holding Securities 2
2.3 Registration 2
2.4 Purchases 2
2.5 Exchanges 4
2.6 Sales of Securities 4
2.7 Depositary Receipts 5
2.8 Exercise of Rights; Tender Offers 6
2.9 Stock Dividends, Rights, Etc. 6
2.10 Options 6
2.11 Borrowings 7
2.12 Demand Deposit Bank Accounts 8
2.13 Interest Bearing Call or Time Deposits 9
2.14 Futures Contracts 10
2.15 Foreign Exchange Transactions 11
2.16 Stock Loans 13
2.17 Collections 13
2.18 Dividends, Distributions and Redemptions 14
2.19 Proxies, Notices, Etc. 15
2.20 Nondiscretionary Details 15
2.21 Bills 16
2.22 Deposit of Fund Assets in Securities Systems 16
2.23 Other Transfers 18
2.24 Investment Limitations 19
2.25 Custodian Advances 19
2.26 Restricted Securities 20
2.27 Proper Instructions 22
2.28 Segregated Account 23
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 24
4. Assistance by the Custodian as to Certain Matters 28
5. Powers and Duties of the Custodian with
Respect to its Role as Recordkeeping Agent 29
5.1 Records 29
5.2 Accounts 29
5.3 Access to Records 29
<PAGE> 4
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6. Standard of Care and Related Matter 30
6.1 Liability of the Custodian with Respect to Proper
Instructions;
Evidence of Authority; Etc. 30
6.2 Liability of the Custodian with
Respect to Use of Securities Systems
and Foreign Depositories 31
6.3 Standard of Care; Liability;
Indemnification 31
6.4 Reimbursement of Disbursements, Etc. 33
6.5 Security for Obligations to Custodian 33
6.6 Appointment of Agents 34
6.7 Powers of Attorney 34
7. Compensation of the Custodian 35
8. Termination; Successor Custodian 35
9. Amendment 36
10. Governing Law 36
11. Notices 36
12. Binding Effect 37
13. Counterparts 37
<PAGE> 5
CUSTODIAN AGREEMENT
AGREEMENT made this 29th day of November, 1993, between THE RBB FUND,
INC. (the "Fund") and each of the Funds listed in Appendix B attached hereto as
said Exhibit may from time to time be revised (collectively, the "Funds"
individually, a "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians appointed pursuant
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<PAGE> 6
to the provisions of Section 3 hereof or held by any Foreign Depositories (as
said term is defined in Section 3) utilized by a Subcustodian, the Custodian
shall have and perform the following powers and duties:
2.l Safekeeping - To keep safely the securities and other assets of the
Fund that have been delivered to the Custodian and, on behalf of the Fund, from
time to time to receive delivery of securities for safekeeping.
2.2 Manner of Holding Securities - To hold securities of the Fund (1)
by physical possession of the share certificates or other instruments
representing such securities in registered or bearer form, or (2) in book-entry
form by a Securities System (as said term is defined in Section 2.22) or a
Foreign Depository.
2.3 Registration - To hold registered securities of the Fund, with or
without any indication of fiduciary capacity, provided that securities are held
in an account of the Custodian containing only assets of the Fund or only assets
held as fiduciary or custodian for customers.
2.4 Purchases - Upon receipt of proper instructions, as defined in
Section 2.27, insofar as funds are available for the purpose, to pay for and
receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, or (3) by a Securities System or a Foreign Depository. However, (i) in
the case of repurchase agreements entered into by
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<PAGE> 7
the Fund, the Custodian (as well as an Agent) may release funds to a Securities
System, a Foreign Depository or a Subcustodian prior to the receipt of advice
from the Securities System, Foreign Depository or Subcustodian that the
securities underlying such repurchase agreement have been transferred by book
entry into the Account (as defined in Section 2.22) of the Custodian (or such
Agent) maintained with such Securities System or to the Foreign Depository or
Subcustodian, so long as such payment instructions to the Securities System,
Foreign Depository or Subcustodian include a requirement that delivery is only
against payment for securities, (ii) in the case of foreign exchange contracts,
options, time deposits, call account deposits, currency deposits, and other
deposits, contracts or options pursuant to Sections 2.10, 2.12, 2.13, 2.14 and
2.15, the Custodian may make payment therefor without receiving an instrument
evidencing said deposit, contract or option so long as such payment instructions
detail specific securities to be acquired, and (iii) in the case of securities
as to which payment for the security and receipt of the instrument evidencing
the security are under generally accepted trade practice or the terms of the
instrument representing the security expected to take place in different
locations or through separate parties, such as commercial paper which is indexed
to foreign currency exchange rates, derivatives and similar securities, the
Custodian may make payment for such securities prior to receipt thereof in
accordance with such generally accepted trade practice or the terms of the
instrument representing such security.
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<PAGE> 8
2.5 Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into an account as permitted in Section
2.3, and may surrender securities for a different number of certificates or
instruments representing the same number of shares or same principal amount of
indebtedness, provided the securities to be issued are to be delivered to the
Custodian.
2.6 Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System or a Foreign
Depository; provided, however, that (i) in the case of delivery of physical
certificates or instruments representing securities, the Custodian may make
delivery to the broker buying the securities,
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<PAGE> 9
against receipt therefor, for examination in accordance with "street delivery"
custom, provided that the payment therefor is to be made to the Custodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Custodian, and (ii) in the case of securities referred to in
clause (iii) of the last sentence of Section 2.4, the Custodian may make
settlement, including with respect to the form of payment, in accordance with
generally accepted trade practice relating to such securities or the terms of
the instrument representing said security.
2.7 Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory
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<PAGE> 10
to the Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depositary to deliver the securities underlying such
ADRs to a Subcustodian or an Agent.
2.8 Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
2.9 Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
2.10 Options - Upon receipt of proper instructions or upon receipt of
instructions given pursuant to any agreement relating to an option or as
otherwise provided in any such agreement to (i) receive and retain, to the
extent provided to the Custodian, confirmations or other documents evidencing
the purchase, sale or writing of an option of any type on or in respect of a
security, securities index or similar form of property by the Fund; (ii) deposit
and maintain in a segregated account, either physically or by book-entry in a
Securities System or Foreign Depository or
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<PAGE> 11
with a broker, dealer or other entity, securities, cash or other assets in
connection with options transactions entered into by the Fund; (iii) transfer
securities, cash or other assets to a Securities System, Foreign Depository,
broker, dealer or other entity, as margin (including variation margin) or other
security for the Fund's obligations in respect of any option; and (iv) pay,
release and/or transfer such securities, cash or other assets in accordance with
a notice or other communication evidencing the expiration, termination or
exercise of or default under any such option furnished by The Options Clearing
Corporation, by the securities or options exchange on which such option is
traded or by such broker, dealer or other entity as may be responsible for
handling such options transaction or have authority to give such notice or
communication. The Custodian shall not be responsible for the sufficiency of
assets held in any segregated account established in compliance with applicable
margin maintenance requirements or the performance of the other terms of any
agreement relating to an option. Notwithstanding the foregoing, options on
futures contracts and options to purchase and sell foreign currencies shall be
governed by Sections 2.14 and 2.15.
2.11 Borrowings - Upon receipt of proper instructions, to deliver
securities of the Fund to lenders or their agents as collateral for borrowings
effected by the Fund, provided that such borrowed money is payable to or upon
the Custodian's order as Custodian for the Fund.
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<PAGE> 12
2.12 Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund, subject only to draft or order by the
Custodian, and to hold in such account or accounts as a deposit accepted on the
Custodian's books cash, including foreign currency, received for the account of
the Fund other than cash held as deposits with Banking Institutions in
accordance with the following paragraph. The responsibilities of the Custodian
for cash, including foreign currency, of the Fund accepted on the Custodian's
books as a deposit shall be that of a U. S. bank for a similar deposit.
If and when authorized by proper instructions, the Custodian may open
and operate an additional account(s) in such other banks or trust companies as
may be designated by the Fund in such instructions (any such bank or trust
company so designated by the Fund being referred to hereafter as a "Banking
Institution"), and may deposit cash, including foreign currency, of the Fund in
such account or accounts, provided that such account(s) (hereinafter
collectively referred to as "demand deposit bank accounts") shall be in the name
of the Custodian or a nominee of the Custodian for the account of the Fund or
for the account of the Custodian's customers generally and shall be subject only
to the Custodian's draft or order; provided that any such demand deposit bank
account shall contain only assets held by the Custodian as a fiduciary or
custodian for the Fund and/or other customers and that the records of the
Custodian shall indicate at all times the Fund and/or other customers for which
such funds are held in such
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<PAGE> 13
account and the respective interests therein. Such demand deposit accounts may
be opened with Banking Institutions in the United States and in other countries
and may be denominated in either U. S. Dollars or other currencies as the Fund
may determine. The records for each such account will be maintained by the
Custodian but the deposits in any such account shall not constitute a deposit
liability of the Custodian. All such deposits, including with Subcustodians,
shall be deemed to be portfolio securities of the Fund and accordingly the
responsibility of the Custodian therefor shall be the same as and no greater
than the Custodian's responsibility in respect of other portfolio securities of
the Fund. The authorization by the Fund to appoint a Subcustodian as such shall
also constitute a proper instruction to open a demand deposit bank account
subject to the provisions of this paragraph with such Subcustodian.
2.13 Interest Bearing Call or Time Deposits - To place interest bearing
fixed term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
determine, in the name of the Custodian or a nominee of the Custodian for the
account of the Fund or the account of the Custodian's customers generally and
subject only to the Custodian's draft or order; provided that any such deposit
shall be held in an account containing only assets held by the Custodian as a
fiduciary or custodian for the Fund and/or other
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<PAGE> 14
customers and that the records of the Custodian shall indicate at all times the
Fund and/or other customers for which such funds are held in such account and
the respective interests therein. Deposits may be denominated in U. S. Dollars
or other currencies and need not be evidenced by the issuance or delivery of a
certificate to the Custodian, provided that the Custodian shall include in its
records with respect to the assets of the Fund appropriate notation as to the
amount and currency of each such deposit, the accepting Banking Institution and
other appropriate details, and shall retain such forms of advice or receipt
evidencing the deposit, if any, as may be forwarded to the Custodian by the
Banking Institution. Funds, other than those accepted on the Custodian's books
as a deposit, but including those placed with Subcustodians, shall be deemed
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks, as described in the second paragraph of Section 2.12 of this
Agreement. The responsibility of the Custodian for funds accepted on the
Custodian's books as a deposit shall be that of a U. S. bank for a similar
deposit.
2.14 Futures Contracts. Upon receipt of proper instructions or upon
receipt of instructions given pursuant to any agreement relating to a futures
contract or an option thereon or as otherwise provided in any such agreement, to
(i) receive and retain, to the extent provided to the Custodian, confirmations
or other documents evidencing the purchase or sale
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<PAGE> 15
of a futures contract or an option on a futures contract by the Fund; (ii)
deposit and maintain in a segregated account, either physically or by book-entry
in a Securities System or Foreign Depository, for the benefit of any futures
commission merchant, or pay to such futures commission merchant, securities,
cash or other assets designated by the Fund as initial, maintenance or variation
"margin" deposits intended to secure the Fund's performance of its obligations
under any futures contract purchased or sold or any option on a futures contract
written, purchased or sold by the Fund, in accordance with the provisions of any
agreement relating thereto or the rules of the Commodity Futures Trading
Commission and/or any contract market or any similar organization on which such
contract or option is traded; and (iii) pay, release and/or transfer securities,
cash or other assets into or out of such margin accounts only in accordance with
any such agreement or rules. The Custodian shall not be responsible for the
sufficiency of assets held in any segregated account established in compliance
with applicable margin maintenance requirements or the performance of the other
terms of any agreement relating to a futures contract or an option thereon.
2.15 Foreign Exchange Transactions - Pursuant to proper instructions,
to settle foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account of the
Fund with such currency brokers or Banking Institutions, including
Subcustodians, as the
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<PAGE> 16
Fund may direct pursuant to proper instructions. The Custodian shall be
responsible for the transmission of cash and instructions to and from the
currency broker or Banking Institution with which the contract or option is
made, the safekeeping of all certificates and other documents and agreements
evidencing or relating to such foreign exchange transactions as the Custodian
may receive and the maintenance of proper records as set forth in Section 5.1.
In connection with such transactions, the Custodian is authorized to make free
outgoing payments of cash in the form of U. S. Dollars or foreign currency
without receiving confirmation of a foreign exchange contract or option or
confirmation that the countervalue currency completing the foreign exchange
contract has been delivered or received or that the option has been delivered or
received. The Fund accepts full responsibility for its use of third-party
foreign exchange dealers and for execution of said foreign exchange contracts
and options and understands that the Fund shall be responsible for any and all
costs and interest charges which may be incurred by the Fund or the Custodian as
a result of the failure or delay of third parties to deliver foreign exchange.
Alternatively, such transactions may be undertaken by the Custodian as
principal, if instructed by the Fund.
Foreign exchange contracts and options, other than those executed with
the Custodian as principal, but including those executed with Subcustodians,
shall be deemed to be portfolio
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<PAGE> 17
securities of the Fund and the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's responsibility in respect of
other portfolio securities of the Fund. The responsibility of the Custodian with
respect to foreign exchange contracts and options executed with the Custodian as
principal shall be that of a U. S. bank with respect to a similar contract or
option.
2.16 Stock Loans - Upon receipt of proper instructions, to deliver
securities of the Fund, in connection with loans of securities by the Fund, to
the borrower thereof prior to receipt of the collateral, if any, for such
borrowing, provided that for stock loans secured by cash collateral the
Custodian's instructions to any Securities System holding such securities
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
2.17 Collections - (i) To collect and receive all income, payments of
principal and other payments with respect to the securities held hereunder, and
in connection therewith to deliver the certificates or other instruments
representing the securities to the issuer thereof or its agent when securities
are called, redeemed, retired or otherwise become payable; provided, that the
payment is to be made in such form and manner and at such time, which may be
after delivery by the Custodian of the instrument representing the security, as
is in accordance with the terms of the instrument representing the security, or
such proper
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<PAGE> 18
instructions as the Custodian may receive, or governmental regulations, the
rules of Securities Systems, Foreign Depositories or other U.S. or foreign
securities depositories and clearing agencies or, with respect to securities
referred to in clause (iii) of the last sentence of Section 2.4, in accordance
with generally accepted trade practice; (ii) to execute ownership and other
certificates and affidavits for all federal and state tax purposes in connection
with receipt of income, principal or other payments with respect to securities
of the Fund or in connection with transfer of securities; and (iii) pursuant to
proper instructions to take such other actions with respect to collection or
receipt of funds or transfer of securities which involve an investment decision.
2.18 Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent
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<PAGE> 19
as the Fund shall have authorized), the Custodian shall release funds or
securities, insofar as available, to the Shareholder Servicing Agent or as such
Agent shall otherwise instruct for payment to Fund shareholders who have
delivered to such Agent a request for repurchase or redemption of their shares
of the Fund.
2.19 Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund
all forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
2.20 Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Fund held by the
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
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<PAGE> 20
2.21 Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
2.22 Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) the Participants Trust Company, (iii) any book-entry system as
provided in Subpart O of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31
CFR Part 350, or the book-entry regulations of federal agencies substantially in
the form of Subpart O, or (iv) any other domestic clearing agency registered
with the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and whose use the
Fund has previously approved in writing (each of the foregoing being referred to
in this Agreement as a "Securities System"). Utilization of a Securities System
shall be in accordance with applicable Federal Reserve Board and Securities and
Exchange Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian (provided that
any such agent shall be qualified to act as a custodian of the Fund pursuant to
the
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<PAGE> 21
Investment Company Act of 1940 and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than assets held as a
fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to
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<PAGE> 22
the Fund copies of daily transaction sheets reflecting each day's transactions
in the Securities System for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
2.23 Other Transfers - To deliver securities, funds and other property
of the Fund to a Subcustodian or another custodian as necessary to effect
transactions authorized by proper instructions and upon receipt of proper
instructions, to deliver securities, funds and other property of the Fund to a
Subcustodian or another custodian of the Fund; and, upon receipt of proper
instructions, to make such other disposition of securities, funds or other
property of the Fund in a manner other than or for purposes other than as
enumerated elsewhere in this Agreement, provided that the instructions relating
to such disposition shall state the amount of securities to be delivered and the
name of the person or persons to whom delivery is to be made.
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<PAGE> 23
2.24 Investment Limitations - In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
securities made by or for the Fund, the Custodian may assume unless and until
notified in writing to the contrary that proper instructions received by it are
not in conflict with or in any way contrary to any provisions of the Fund's
Declaration of Trust or Certificate of Incorporation or By-Laws (or comparable
documents) or votes or proceedings of the shareholders or Trustees or Directors
of the Fund. The Custodian shall in no event be liable to the Fund and shall be
indemnified by the Fund for any violation which occurs in the course of carrying
out instructions given by the Fund of any investment limitations to which the
Fund is subject or other limitations with respect to the Fund's powers to make
expenditures, encumber securities, borrow or take similar actions affecting the
Fund.
2.25 Custodian Advances. - In the event that the Custodian is directed
by proper instructions to make any payment or transfer of funds on behalf of the
Fund for which there would be, at the close of business on the date of such
payment or transfer, insufficient funds held by the Custodian on behalf of the
Fund, the Custodian may, in its discretion without further proper instructions,
provide an advance ("Advance") to the Fund in an amount sufficient to allow the
completion of the transaction by reason of which such payment or transfer of
funds is to be made. In addition, in the event the Custodian is directed by
proper instructions to make any payment or transfer
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<PAGE> 24
of funds on behalf of the Fund as to which it is subsequently determined that
the Fund has overdrawn its cash account with the Custodian as of the close of
business on the date of such payment or transfer, said overdraft shall
constitute an Advance. Any Advance shall be payable on demand by Custodian,
unless otherwise agreed by the Fund and the Custodian, and shall accrue interest
from the date of the Advance to the date of payment by the Fund at a rate agreed
upon from time to time by the Custodian and the Fund. It is understood that any
transaction in respect of which the Custodian shall have made an Advance,
including but not limited to a foreign exchange contract or transaction in
respect of which the Custodian is not acting as a principal, is for the account
of and at the risk of the Fund, and not, by reason of such Advance, deemed to be
a transaction undertaken by the Custodian for its own account and risk. The
Custodian and the Fund acknowledge that the purpose of Advances is to finance
temporarily the purchase or sale of securities for prompt delivery in accordance
with the settlement terms of such transactions or to meet emergency expenses not
reasonably foreseeable by the Fund.
2.26 Restricted Securities. - In the case of a "restricted security",
the Fund shall have the responsibility to provide to or obtain for the
Custodian, the issuer of the security or other appropriate third party any
necessary documentation, including without limitation, legal opinions or
consents, and to take any necessary actions required in
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connection with the registration of restricted securities in the manner provided
in Section 2.3 upon acquisition thereof by the Fund or required in connection
with any sale or other disposition thereof by the Fund. Upon acquisition and
until so registered, the Custodian shall have no duty to service such restricted
securities, including without limitation, the receipt and collection of cash and
stock dividends, rights and other items of like nature, nor shall the Custodian
have responsibility for the inability of the Fund to exercise in a timely manner
any right in respect of any restricted security or to take any action in a
timely manner in respect of any other type of corporate action relating to a
restricted security. Similarly, the Custodian shall not have responsibility for
the inability of the Fund to sell or otherwise transfer in a timely manner any
restricted security in the absence of any such documentation or action to be
provided, obtained or taken by the Fund. At such time as the Custodian shall
receive any restricted security, regardless of when it shall be registered as
aforesaid, the Fund shall also deliver to the Custodian a term sheet summarizing
those rights, restrictions or other matters of which the Custodian should have
knowledge, such as exercise periods, expiration dates and payment dates, in
order to assist the Custodian in servicing such securities. As used herein, the
term "restricted security" shall mean a security which is subject to
restrictions on transfer, whether by reason of contractual restrictions or
federal, state or foreign securities or similar laws, or a security which has
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<PAGE> 26
special rights or contractual features which do not apply to publicly-traded
shares of, or comparable interests representing, such security.
2.27 Proper Instructions - Proper instructions shall mean a tested
telex from the Fund or a written request, direction, instruction or
certification signed or initialled on behalf of the Fund by one or more person
or persons as the Board of Trustees or Directors of the Fund shall have from
time to time authorized, provided, however, that no such instructions directing
the delivery of securities or the payment of funds to an authorized signatory of
the Fund shall be signed by such person. Those persons authorized to give proper
instructions may be identified by the Board of Trustees or Directors by name,
title or position and will include at least one officer empowered by the Board
to name other individuals who are authorized to give proper instructions on
behalf of the Fund. Telephonic or other oral instructions or instructions given
by facsimile transmission may be given by any one of the above persons and will
be considered proper instructions if the Custodian reasonably believes them to
have been given by a person authorized to give such instructions with respect to
the transaction involved. Oral instructions will be confirmed by tested telex or
in writing in the manner set forth above but the lack of such confirmation shall
in no way affect any action taken by the Custodian in reliance upon such oral
instructions. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral
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<PAGE> 27
instructions given to the Custodian by or on behalf of the Fund (including any
of its officers, Directors, Trustees, employees or agents or any investment
manager or adviser or person or entity with similar reponsibilities which is
authorized to give proper instructions on behalf of the Fund to the Custodian).
Proper instructions may relate to specific transactions or to types or classes
of transactions, and may be in the form of standing instructions.
Proper instructions may include communications effected directly
between electro-mechanical or electronic devices or systems, in addition to
tested telex, provided that the Fund and the Custodian agree to the use of such
device or system.
2.28 Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2.22 hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. (or any futures commission
merchant registered under the Commodity Exchange Act) relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or any similar
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<PAGE> 28
organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or securities in connection with options purchased, sold or written by the Fund
or commodity futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies, and (iv) as mutually
agreed from time to time between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment
of Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved
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<PAGE> 29
in writing by the Fund to hold securities, cash and other property of the Fund
(a "Foreign Depository"). Upon such approval by the Fund, the Custodian is
authorized on behalf of the Fund to notify each Subcustodian of its appointment
as such.
Those Subcustodians, and the countries where and the Foreign
Depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or Foreign Depositories are changed, added
or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
for the Fund to give the approval required by the preceding paragraph and for
the Custodian to put the appropriate arrangements in place with such
Subcustodian, including negotiation of a subcustodian agreement and submission
of such subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund,
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<PAGE> 30
Custodian agrees to remove any securities held on behalf of the Fund by such
agent, if practical, to an approved Subcustodian. Under such circumstances the
Custodian will collect income and respond to corporate actions on a best efforts
basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a Foreign Depository or foreign clearing
agency) or by a Foreign Depository or foreign clearing agency utilized by the
Custodian, notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of Foreign Depositories and foreign clearing agencies, or generally
accepted trade practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, (including by a securities depository or a clearing
agency) including demand and interest bearing deposits, currencies or other
deposits and foreign exchange contracts as referred to in Sections 2.12, 2.13,
2.14 or 2.15, the Custodian shall be liable to the Fund for any loss or damage
to the Fund caused by or resulting from the acts and omissions of any
Subcustodian to the extent that under the terms set forth in the subcustodian
agreement between the Custodian and the Subcustodian (or in the subcustodian
agreement between a Subcustodian and any secondary Subcustodian), the
Subcustodian
-26-
<PAGE> 31
(or secondary Subcustodian) has failed to perform in accordance with the
standard of conduct imposed under such subcustodian agreement as determined in
accordance with the law which is adjudicated to govern such agreement and in
accordance with any determination of any court as to the duties of said
Subcustodian pursuant to said agreement. The Custodian shall nevertheless be
liable to the Fund for its own negligence in transmitting any instructions
received by it from the Fund and for its own negligence in connection with the
delivery of any securities or funds held by it to any such Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
-27-
<PAGE> 32
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian
may assist generally in the preparation of reports
-28-
<PAGE> 33
to Fund shareholders and others, audits of accounts, and other ministerial
matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Recordkeeping Agent: The Custodian shall have and perform the following duties
with respect to recordkeeping:
5.l Records - To create, maintain and retain such records relating to
its activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 31a-1 and 31a-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
5.2 Accounts - To keep books of account and render statements,
including interim monthly and complete quarterly financial statements, or copies
thereof, from time to time as reasonably requested by proper instructions.
5.3 Access to Records - The books and records maintained by the
Custodian pursuant to Sections 5.1 and 5.2 shall at all times during the
Custodian's regular business hours be open to inspection and audit by officers
of, attorneys for and auditors employed by the Fund and by employees and agents
of the Securities and Exchange Commission, provided that all such individuals
shall observe all security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as may be reasonably imposed by the Custodian.
-29-
<PAGE> 34
6. Standard of Care and Related Matters:
6.1 Liability of the Custodian with Respect to Proper Instructions;
Evidence of Authority, Etc. The Custodian shall not be liable for any action
taken or omitted in reliance upon proper instructions believed by it to be
genuine or upon any other written notice, request, direction, instruction,
certificate or other instrument believed by it to be genuine and signed by the
proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund,
-30-
<PAGE> 35
to receive and act upon advice of (i) counsel regularly retained by the
Custodian in respect of custodian matters, (ii) counsel for the Fund, or (iii)
such other counsel as the Fund and the Custodian may agree upon, with respect to
all matters, and the Custodian shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
6.2 Liability of the Custodian with Respect to Use of Securities
Systems and Foreign Depositories - With respect to the portfolio securities,
cash and other property of the Fund held by a Securities System or by a Foreign
Depository utilized by the Custodian or any Subcustodian, the Custodian shall be
liable to the Fund only for any loss or damage to the Fund resulting from use of
the Securities System or Foreign Depository if caused by any negligence,
misfeasance or misconduct of the Custodian or any of its Agents (as said term is
defined in Section 6.6) or of any of its or its Agents' employees or from any
failure of the Custodian or any such Agent to enforce effectively such rights as
it may have against the Securities System or Foreign Depository. At the election
of the Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the Securities System, Foreign
Depository or any other person which the Custodian may have as a consequence of
any such loss or damage to the Fund if and to the extent that the Fund has not
been made whole for any such loss or damage.
6.3 Standard of Care; Liability; Indemnification - The Custodian shall
be held only to the exercise of reasonable care
-31-
<PAGE> 36
and diligence in carrying out the provisions of this Agreement, provided that
the Custodian shall not thereby be required to take any action which is in
contravention of any applicable law, rule or regulation or any order or judgment
of any court of competent jurisdiction.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominees from all claims and liabilities (including counsel fees) incurred or
assessed against it or its nominees in connection with the performance of this
Agreement, except such as may arise from its or its nominee's breach of the
relevant standard of conduct set forth in this Agreement. Without limiting the
foregoing indemnification obligation of the Fund, the Fund agrees to indemnify
the Custodian and any nominee in whose name portfolio securities or other
property of the Fund is registered against any liability the Custodian or such
nominee may incur by reason of taxes assessed to the Custodian or such nominee
or other costs, liability or expense incurred by the Custodian or such nominee
resulting directly or indirectly from the fact that portfolio securities or
other property of the Fund is registered in the name of the Custodian or such
nominee.
In no event shall the Custodian incur liability under this Agreement if
the Custodian or any Subcustodian, Securities System, Foreign Depository,
Banking Institution or any agent or entity utilized by any of them is prevented,
forbidden or delayed from performing, or omits to perform, any act or thing
which this Agreement provides shall be performed or omitted to be performed,
-32-
<PAGE> 37
by reason of (i) any Sovereign Risk or (ii) any provision of any present or
future law or regulation or order of the United States of America or any state
thereof, or of any foreign country or political subdivision thereof, or of any
securities depository or clearing agency which operates a central system for
handling of securities or equivalent book-entries in a country or which operates
a transnational system for the central handling of securities or equivalent
book-entries, or (iii) any provision of any order or judgment of any court of
competent jurisdiction. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
6.4 Reimbursement of Disbursements, Etc. - The Custodian shall be
entitled to receive reimbursement from the Fund on demand, in the manner
provided in Section 7, for its cash disbursements, expenses and charges
(including the fees and expenses of any Subcustodian or any Agent) in connection
with this Agreement, but excluding salaries and usual overhead expenses.
6.5 Security for Obligations to Custodian - If the
-33-
<PAGE> 38
Custodian or any nominee thereof shall incur or be assessed any taxes, charges,
expenses, assessments, claims or liabilities in connection with the performance
of this Agreement (collectively a "Liability"), except such as may arise from
its or such nominee's breach of the relevant standard of conduct set forth in
this Agreement, or if the Custodian shall make any Advance to the Fund, then in
such event any property at any time held for the account of the Fund by the
Custodian or a Subcustodian shall be security for such Liability or for such
Advance and the interest thereon, and if the Fund shall fail to pay such Advance
or interest when due or shall fail to reimburse or indemnify the Custodian
promptly in respect of a Liability, the Custodian shall be entitled to utilize
available cash and to dispose of the Fund's property, including securities, to
the extent necessary to obtain repayment, reimbursement or indemnification.
6.6 Appointment of Agents - The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or trust
company as its agent (an "Agent") to carry out such of the provisions of this
Agreement as the Custodian may from time to time direct, provided, however, that
the appointment of such Agent (other than an Agent appointed pursuant to the
third paragraph of Section 3) shall not relieve the Custodian of any of its
responsibilities under this Agreement.
6.7 Powers of Attorney - Upon request, the Fund shall deliver to the
Custodian such proxies, powers of attorney or
-34-
<PAGE> 39
other instruments as may be reasonable and necessary or desirable in connection
with the performance by the Custodian or any Subcustodian of their respective
obligations under this Agreement or any applicable subcustodian agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6.4,
shall be billed to the Fund and be paid in cash to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6.4 and 7, and all Advances and Liabilities,
upon receipt by the Fund of a statement setting forth such fees, expenses,
Advances and Liabilities.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate
-35-
<PAGE> 40
with the Fund in execution of documents and performance of other actions
necessary or desirable in order to substitute the successor custodian for the
Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This Agreement is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or
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<PAGE> 41
mailed postage prepaid to the Fund addressed to the Fund at Bellevue Park
Corporate Center, 103 Bellevue Parkway, Suite 152, Wilmington, DE 19809 or to
such other address as the Fund may have designated to the Custodian in writing,
or to the Custodian at 40 Water Street, Boston, Massachusetts 02109, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
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<PAGE> 42
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
THE RBB FUND, INC. BROWN BROTHERS HARRIMAN & CO.
By /s/ Edward J. Roach per pro /s/ Douglas A. Donahue, Jr.
------------------------------ ------------------------------
-38-
<PAGE> 43
APPENDIX "B"
TO
CUSTODIAN AGREEMENT
BETWEEN
THE RBB FUND, INC. and BROWN BROTHERS HARRIMAN & CO.
Dated as of November 29, 1993
The following is a list of Portfolios for which the Custodian shall serve under
a Custodian Agreement dated as of November 29, 1993 (the "Agreement"):
BEA EMERGING MARKETS EQUITY PORTFOLIO
BEA INTERNATIONAL EQUITY PORTFOLIO
BEA STRATEGIC FIXED INCOME PORTFOLIO
BEA INTERNATIONAL FIXED INCOME PORTFOLIO
IN WITNESS WHEREOF, each of the parties hereto has caused this Appendix to be
executed in its name and on behalf of each such Portfolio.
THE RBB FUND, INC. BROWN BROTHERS HARRIMAN & CO.
By: /s/ Edward J. Roach By: /s/ Douglas A. Donahue , Jr.
---------------------------- ----------------------------
Name: Edward J. Roach Name: Douglas A. Donahue, Jr.
Title: President Title: Partner
<PAGE> 44
May, 1997
BROWN BROTHERS HARRIMAN & CO.
GLOBAL CUSTODY FEE SCHEDULE FOR THE RBB FUND, INC.
(INCLUDES ALL RBB PORTFOLIOS LISTED IN EXHIBIT 1)
Custody - Payable Quarterly on the Value of Assets:
COUNTRY BASIS POINTS TRANSACTION CHARGES
Argentina 30 b.p. $75
Australia 6 b.p. $35
Austria 33 b.p. (Bonds) $70
6 b.p. (Equities)
Bahrain 55 b.p. $175
Bangladesh 45 b.p. $150
Belgium 8 b.p. $60
Botswana 45 b.p. $150
*Brazil 18 b.p. $50
Canada 6 b.p. $20
Chile 25 b.p. $75
China 30 b.p. $100
Colombia 45 b.p. (First $10 million) $100
40 B.P. (All over)
Czech Republic 45 b.p. $150
Ecuador 55 b.p. $175
Egypt 50 b.p. $175
Denmark 8 b.p. $65
Finland 15 b.p. $60
France 6 b.p. $60
Germany 6 b.p. $25
Ghana 55 b.p. $175
Greece 20 b.p. (Bonds) $150 (on-premises)
50 b.p. (Equities) $350 (off-premises)
Hong Kong 12 b.p. $80
Hungary 50 b.p. $175
India 40 b.p. $150 (Per partial)
Indonesia 15 b.p. $50
Ireland 8 b.p. $40
**Israel 27 b.p. (First $50 million) $75
25 b.p. (All over)
Italy 15 b.p. $80
Japan 6 b.p. $25
Jordan 50 b.p. $150
Kenya 55 b.p. $175
Korea 20 b.p. $50
Lebanon 55 b.p. $175
Malaysia 15 b.p. $50
<PAGE> 45
[BROWN BROTHERS HARRIMAN & CO LOGO]
EXHIBIT 1
ADDENDUM TO RBB FUND, INC. FEE SCHEDULE DATED MAY, 1997
The RBB Fund Inc.
- Global Telecommunications Fund
- Emerging Markets Equity Fund
- High Yield Fund
- International Equity Fund
- Strategic Global Fixed Income Fund
- U.S. Core Fixed Income Fund
- U.S. Core Equity Fund
- Municipal Bond Fund
- Short Duration Fund*
- Balanced Fund*
* inactive
<PAGE> 1
Exhibit 9 (a)
<PAGE> 2
TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE RBB FUND, INC.
for
THE BEA FUNDS
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. Terms of Appointment; Duties of the Bank........................................................1
2. Fees and Expenses...............................................................................3
3. Representations and Warranties of the Bank......................................................4
4. Representations and Warranties of the Fund......................................................4
5. Wire Transfer Operating Guidelines..............................................................5
6. Data Access and Proprietary Information.........................................................7
7. Indemnification.................................................................................8
8. Standard of Care................................................................................9
9. Covenants of the Fund and the Bank..............................................................9
10. Termination of Agreement.......................................................................10
11. Additional Funds...............................................................................10
12. Assignment.....................................................................................11
13. Amendment......................................................................................11
14. Massachusetts Law to Apply.....................................................................11
15. Force Majeure..................................................................................11
16. Consequential Damages..........................................................................11
17. Merger of Agreement............................................................................12
18. Counterparts...................................................................................12
19. Reproduction of Documents......................................................................12
</TABLE>
<PAGE> 4
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 15th day of October, 1996, by and between THE RBB FUND,
INC., a Maryland corporation, having its principal office and place of business
at Bellevue Park Corporate Center, 400 Bellevue Parkway, Suite 100, Wilmington,
DE 19809 (the "Fund"), with respect to The Bea Funds and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company having its principal office and
place of business at 225 Franklin Street, Boston, Massachusetts 02110 (the
"Bank").
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, The Bea Funds of the Fund intend to initially offer shares in ten
series identified on Schedule A (each such series, together with all other
series subsequently established by the Fund and made subject to this Agreement
in accordance with Article 10, being herein referred to as a "Portfolio", and
collectively as the "Portfolios");
WHEREAS, the Fund desires to appoint the Bank with respect to the Portfolios as
its transfer agent, dividend disbursing agent, custodian of certain retirement
plans and agent in connection with certain other activities, and the Bank
desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
l. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the
Fund, with respect to the Portfolios, hereby employs and appoints the
Bank to act as, and the Bank agrees to act as its transfer agent for
the Fund's authorized and issued shares of its common stock, $ .001
par value, ("Shares"), dividend disbursing agent, custodian of
certain retirement plans and agent in connection with any
accumulation, open-account or similar plans provided to the
shareholders of each of the respective Portfolios of the Fund
("Shareholders") and set out in the currently effective prospectus
and statement of additional information ("prospectus") of the Fund on
behalf of the applicable Portfolio, including without limitation any
periodic investment plan or periodic withdrawal program.
1.2 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time
by agreement between the Fund on behalf of each of the
Portfolios, as applicable and the Bank, the Bank shall:
<PAGE> 5
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and
appropriate documentation thereof to the Custodian
of the Portfolio authorized pursuant to the
Articles of Incorporation of the Fund (the
"Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) In respect to the transactions in items (i), (ii)
and (iii) above, the Bank shall execute
transactions directly with broker-dealers
authorized by the Fund;
(v) At the appropriate time as and when it receives
monies paid to it by the Custodian with respect to
any redemption, pay over or cause to be paid over
in the appropriate manner such monies as instructed
by the redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and
distributions declared by the Fund on behalf of the
applicable Portfolio;
(viii) Issue replacement certificates for those
certificates alleged to have been lost, stolen or
destroyed upon receipt by the Bank of
indemnification satisfactory to the Bank and
protecting the Bank and the Fund, and the Bank at
its option, may issue replacement certificates in
place of mutilated stock certificates upon
presentation thereof and without such indemnity;
(ix) Maintain records of account for and advise the
Fund and its Shareholders as to the foregoing and
(x) Record the issuance of shares of the Portfolios
and maintain pursuant to SEC Rule 17Ad-10(e) a
record of the total number of shares of the
Portfolios which are authorized, based upon data
provided to it by the Fund, and issued and
outstanding. The Bank shall also provide the Fund
on a regular basis with the total number of shares
which are authorized and issued and outstanding
and shall have no obligation, when recording the
issuance of shares, to take cognizance of any laws
relating to the issue or sale of such shares,
which functions shall be the sole responsibility
of the
2
<PAGE> 6
Fund. The Bank shall notify the Fund in case any
proposed issue of shares by the Portfolios would
result in an over-issue as defined by Section 8-210
of Article 8 of the Uniform Commercial Code. In
case any issue of shares would result in such an
over-issue, the Bank shall refuse to issue said
shares and shall not countersign and issue
certificates (if any) for such shares.
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), the Bank
shall: (i) perform the customary services of a transfer
agent, dividend disbursing agent, custodian of certain
retirement plans and, as relevant, agent in connection with
accumulation, open-account or similar plans (including
without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to:
maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing Shareholder proxies, Shareholder
reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien
accounts, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect
to dividends and distributions by federal authorities for
all Shareholders, preparing and mailing confirmation forms
and statements of account to Shareholders for all purchases
and redemptions of Shares and other confirmable transactions
in Shareholder accounts, preparing and mailing activity
statements for Shareholders, and providing Shareholder
account information and (ii) provide a system which will
enable the Fund to monitor the total number of Shares sold
in each State.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as
exempt from blue sky reporting for each State and (ii)
verify the establishment of transactions for each State on
the system prior to activation and thereafter monitor the
daily activity for each State. The responsibility of the
Bank for the Fund's blue sky State registration status is
solely limited to the initial establishment of transactions
subject to blue sky compliance by the Fund and the reporting
of such transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these services
in Section 1 may be established from time to time by
agreement between the Fund on behalf of each Portfolio and
the Bank per the attached service responsibility schedule.
The Bank may at times perform only a portion of these
services and the Fund or its agent may perform these
services on the Fund's behalf.
(e) The Bank shall provide additional services on behalf of the
Fund (e.g., escheatment services) which may be agreed upon
in writing between the Fund and the Bank.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the Fund
agrees on behalf of
3
<PAGE> 7
each of the Portfolios to pay the Bank an annual maintenance fee for
each Shareholder account as set out in the initial fee schedule
attached hereto. Such fees and out-of-pocket expenses and advances
identified under Section 2.2 below may be changed from time to time
subject to mutual written agreement between the Fund and the Bank.
2.2 In addition to the fee paid under Section 2.1 above, the Fund agrees
on behalf of each of the Portfolios to reimburse the Bank for
out-of-pocket expenses, including but not limited to confirmation
production, postage, forms, telephone, microfilm, microfiche, mailing
and tabulating proxies, records storage, or advances incurred by the
Bank for the items set out in the fee schedule attached hereto. In
addition, any other expenses incurred by the Bank at the request or
with the consent of the Fund, will be reimbursed by the Fund on
behalf of the applicable Portfolio.
2.3 The Fund agrees on behalf of each of the Portfolios to pay all fees
and reimbursable expenses within five days following the receipt of
the respective billing notice. Postage for mailing of dividends,
proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to the Bank by the Fund at least seven (7) days
prior to the mailing date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized and existing and in good
standing under the laws of The Commonwealth of Massachusetts.
3.2 It is duly qualified to carry on its business in The Commonwealth of
Massachusetts.
3.3 It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a corporation duly organized and existing and in good standing
under the laws of Maryland.
4
<PAGE> 8
4.2 It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
4.3 All corporate proceedings required by said Articles of Incorporation
and By-Laws have been taken to authorize it to enter into and perform
this Agreement.
4.4 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.5 A registration statement under the Securities Act of 1933, as amended
on behalf of each of the Portfolios is currently effective and will
remain effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all Shares of
the Fund being offered for sale.
5. Wire Transfer Operating Guidelines/Articles 4A of the Uniform
Commercial Code
5.1 The Bank is authorized to promptly debit the appropriate
Fund account(s) upon the receipt of a payment order in
compliance with the selected security procedure (the
"Security Procedure") chosen for funds transfer and in the
amount of money that the Bank has been instructed to
transfer. The Bank shall execute payment orders in
compliance with the Security Procedure and with the Fund
instructions on the execution date provided that such
payment order is received by the customary deadline for
processing such a request, unless the payment order
specifies a later time. All payment orders and
communications received after this the customary deadline
will be deemed to have been received the next business day.
5.2 The Fund acknowledges that the Security Procedure it has
designated on the Fund Selection Form was selected by the
Fund from security procedures offered by the Bank. The Fund
shall restrict access to confidential information relating
to the Security Procedure to authorized persons as
communicated to the Bank in writing. The Fund must notify
the Bank immediately if it has reason to believe
unauthorized persons may have obtained access to such
information or of any change in the Fund's authorized
personnel. The Bank shall verify the authenticity of all
Fund instructions according to the Security Procedure.
5.3 The Bank shall process all payment orders on the basis of
the account number contained in the payment order. In the
event of a discrepancy between any name indicated on the
payment order and the account number, the account number
shall take precedence and govern.
5.4 The Bank reserves the right to decline to process or delay
the processing of a payment order which (a) is in excess of
the collected balance in the account to be
5
<PAGE> 9
charged at the time of the Bank's receipt of such payment
order; (b) if initiating such payment order would cause the
Bank, in the Bank's sole judgement, to exceed any volume,
aggregate dollar, network, time, credit or similar limits
which are applicable to the Bank; or (c) if the Bank, in
good faith, is unable to satisfy itself that the transaction
has been properly authorized.
5.5 The Bank shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders
received in compliance with the Security Procedure provided
that such requests are received in a timely manner affording
the Bank reasonable opportunity to act. However, the Bank
assumes no liability if the request for amendment or
cancellation cannot be satisfied.
5.6 The Bank shall assume no responsibility for failure to
detect any erroneous payment order provided that the Bank
complies with the payment order instructions as received and
the Bank complies with the Security Procedure. The Security
Procedure is established for the purpose of authenticating
payment orders only and not for the detection of errors in
payment orders.
5.7 The Bank shall assume no responsibility for lost interest
with respect to the refundable amount of any unauthorized
payment order, unless the Bank is notified of the
unauthorized payment order within thirty (30) days of
notification by the Bank of the acceptance of such payment
order. In no event (including failure to execute a payment
order) shall the Bank be liable for special, indirect or
consequential damages, even if advised of the possibility of
such damages.
5.8 When the Fund initiates or receives Automated Clearing House
credit and debit entries pursuant to these guidelines and
the rules of the National Automated Clearing House
Association and the New England Clearing House Association,
the Bank will act as an Originating Depository Financial
Institution and/or receiving depository Financial
Institution, as the case may be, with respect to such
entries. Credits given by the Bank with respect to an ACH
credit entry are provisional until the Bank receives final
settlement for such entry from the Federal Reserve Bank. If
the Bank does not receive such final settlement, the Fund
agrees that the Bank shall receive a refund of the amount
credited to the Fund in connection with such entry, and the
party making payment to the Fund via such entry shall not be
deemed to have paid the amount of the entry.
5.9 Confirmation of Bank's execution of payment orders shall
ordinarily be provided within twenty four (24) hours notice
of which may be delivered through the Bank's proprietary
information systems, or by facsimile or call-back. Fund must
report any objections to the execution of an order within
thirty (30) days.
6
<PAGE> 10
6. Data Access and Proprietary Information
6.1 The Fund acknowledges that the data bases, computer programs, screen
formats, report formats, interactive design techniques, and
documentation manuals furnished to the Fund by the Bank as part of the
Fund's ability to access certain Fund-related data ("Customer Data")
maintained by the Bank on data bases under the control and ownership
of the Bank ("Data Access Services") constitute copyrighted, trade
secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to the Bank or other third party.
In no event shall Proprietary Information be deemed Customer Data. The
Fund agrees to treat all Proprietary Information as proprietary to the
Bank and further agrees that it shall not divulge any Proprietary
Information to any person or organization except as may be provided
hereunder. Without limiting the foregoing, the Fund agrees for itself
and its employees and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance
with the Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion
of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the
Bank's instructions;
(d) to refrain from causing or allowing the data acquired
hereunder from being retransmitted to any other computer
facility or other location, except with the prior written
consent of the Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank to
protect at the Bank's expense the rights of the Bank in
Proprietary Information at common law, under federal
copyright law and under other federal or state law.
Each party shall take reasonable efforts to advise its employees of their
obligations pursuant to this Section 6. The obligations of this Section shall
survive any earlier termination of this Agreement.
6.2 If the Fund notifies the Bank that any of the Data Access Services do
not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely
manner to correct such failure. Organizations from which the Bank may
obtain certain data included in the Data Access Services are solely
responsible for the contents of such data and the Fund agrees to make
no claim against the
7
<PAGE> 11
Bank arising out of the contents of such third-party data, including,
but not limited to, the accuracy thereof. DATA ACCESS SERVICES AND ALL
COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION
THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE BANK
EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED
HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.3 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect
the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information, then in such event the
Bank shall be entitled to rely on the validity and authenticity of
such instruction without undertaking any further inquiry as long as
such instruction is undertaken in conformity with security procedures
established by the Bank from time to time.
7. Indemnification
7.1 The Bank shall not be responsible for, and the Fund shall on behalf of
the applicable Portfolio indemnify and hold the Bank harmless from and
against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to:
(a) All actions of the Bank or its agents or subcontractors
required to be taken pursuant to this Agreement, provided
that such actions are taken in good faith and without
negligence or willful misconduct;
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any
representation or warranty of the Fund hereunder;
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or
services which (i) are received by the Bank or its agents or
subcontractors, and (ii) have been prepared, maintained or
performed by the Fund or any other person or firm on behalf
of the Fund including but not limited to any previous
transfer agent or registrar;
(d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors of any instructions or requests of
the Fund on behalf of the applicable Portfolio;
(e) The offer or sale of Shares in violation of federal or state
securities laws or regulations requiring that such Shares be
registered or in violation of any stop order or other
determination or ruling by any federal or any state agency
with respect to the offer or sale of such Shares and
8
<PAGE> 12
(f) The negotiations and processing of checks made payable to
prospective or existing Shareholders tendered to the Bank
for the purchase of Shares, such checks are commonly known
as "third party checks."
7.2 At any time the Bank may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Bank under this Agreement, and the Bank and its agents or
subcontractors shall not be liable and shall be indemnified by the
Fund on behalf of the applicable Portfolio for any action taken or
omitted by it in reliance upon such instructions or upon the written
opinion of such counsel. The Bank, its agents and subcontractors shall
be protected and indemnified in acting upon any paper or document,
reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data,
records or documents provided the Bank or its agents or subcontractors
by machine readable input, telex, CRT data entry or other similar
means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice
thereof from the Fund. The Bank, its agents and subcontractors shall
also be protected and indemnified in recognizing stock certificates
which are reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or
of a co-transfer agent or co-registrar.
7.3 In order that the indemnification provisions contained in this Section
7 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the
Fund of such assertion, and shall keep the Fund advised with respect
to all developments concerning such claim. The Fund shall have the
option to participate with the Bank in the defense of such claim or to
defend against said claim in its own name or in the name of the Bank.
The Bank shall in no case confess any claim or make any compromise in
any case in which the Fund may be required to indemnify the Bank
except with the Fund's prior written consent.
8. Standard of Care
The Bank shall at all times act in good faith and agrees to use its
best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility
and shall not be liable for loss or damage due to errors unless said
errors are caused by its negligence, bad faith, or willful misconduct
or that of its employees.
9. Covenants of the Fund and the Bank
9.1 The Fund shall on behalf of each of the Portfolios promptly furnish to
the Bank the following:
(a) A certified copy of the resolution of the Board of Directors of
the Fund authorizing
9
<PAGE> 13
the appointment of the Bank and the execution and delivery
of this Agreement.
(b) A copy of the Articles of Incorporation and By-Laws of the
Fund and all amendments thereto.
9.2 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices,
if any; and for the preparation or use, and for keeping account of,
such certificates, forms and devices.
9.3 The Bank shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Fund Act of 1940, as
amended, and the Rules thereunder, the Bank agrees that all such
records prepared or maintained by the Bank relating to the services to
be performed by the Bank hereunder are the property of the Fund and
will be preserved, maintained and made available in accordance with
such Section and Rules, and will be surrendered promptly to the Fund
on and in accordance with its request.
9.4 The Bank and the Fund agree that all books, records, information and
data pertaining to the business of the other party which are exchanged
or received pursuant to the negotiation or the carrying out of this
Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
9.5 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the
Fund and to secure instructions from an authorized officer of the Fund
as to such inspection. The Bank reserves the right, however, to
exhibit the Shareholder records to any person whenever it is advised
by its counsel that it may be held liable for the failure to exhibit
the Shareholder records to such person.
10. Termination of Agreement
10.1 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
10.2 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be
borne by the Fund on behalf of the applicable Portfolio(s).
Additionally, the Bank reserves the right to charge for any other
reasonable expenses associated with such termination and a charge
equivalent to the average of three (3) months' fees.
11. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to the
10
<PAGE> 14
Portfolios with respect to which it desires to have the Bank render
services as transfer agent under the terms hereof, it shall so notify
the Bank in writing, and if the Bank agrees in writing to provide such
services, such series of Shares shall become a Portfolio hereunder.
12. Assignment
12.1 Except as provided in Section 12.3 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party
without the written consent of the other party.
12.2 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
12.3 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data
Services, Inc., a Massachusetts corporation ("BFDS") which is duly
registered as a transfer agent pursuant to Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended ("Section 17A(c)(2)"),
(ii) a BFDS subsidiary duly registered as a transfer agent pursuant to
Section 17A(c)(2) or (iii) a BFDS affiliate; provided, however, that
the Bank shall be as fully responsible to the Fund for the acts and
omissions of any subcontractor as it is for its own acts and
omissions.
13. Amendment
This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of
the Board of Directors of the Fund.
14. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
15. Force Majeure
In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment
or transmission failure or damage reasonably beyond its control, or
other causes reasonably beyond its control, such party shall not be
liable for damages to the other for any damages resulting from such
failure to perform or otherwise from such causes.
16. Consequential Damages
Neither party to this Agreement shall be liable to the other party for
consequential damages
11
<PAGE> 15
under any provision of this Agreement or for any consequential damages
arising out of any act or failure to act hereunder.
17. Merger of Agreement
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
18. Counterparts
This Agreement may be executed by the parties hereto on any number of
counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
19. Reproduction of Documents
This Agreement and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The
parties hereto each agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding, whether or not the original is in existence
and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or
further reproduction shall likewise be admissible in evidence.
12
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
THE RBB FUND, INC.
BY: /s/ Edward J. Roach
-------------------------------
The RBB Fund, Inc.
Edward J. Roach
President & Treasurer
ATTEST:
/s/ ???
- ---------------------------
Assistant Secretary
STATE STREET BANK AND TRUST COMPANY
BY: /s/ ???
------------------------------
Executive Vice President
ATTEST:
/s/ ???
- ----------------------------
<PAGE> 17
STATE STREET BANK & TRUST COMPANY
FUND SERVICE RESPONSIBILITIES*
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
1. Receives orders for the purchase X
of Shares.
2. Issue Shares and hold Shares in X
Shareholders accounts.
3. Receive redemption requests. X
4. Effect transactions 1-3 above X
directly with broker-dealers.
5. Pay over monies to redeeming X
Shareholders.
6. Effect transfers of Shares. X
7. Prepare and transmit dividends X
and distributions.
8. Issue Replacement Certificates. X
9. Reporting of abandoned property. X
10. Maintain records of account. X
11. Maintain and keep a current and X
accurate control book for each
issue of securities.
12. Mail proxies. X
13. Mail Shareholder reports. X
14. Mail prospectuses to current X
Shareholders.
15. Withhold taxes on U.S. resident X
and non-resident alien accounts.
<PAGE> 18
Service Performed Responsibility
- ----------------- --------------
Bank Fund
---- ----
16. Prepare and file U.S. Treasury X
Department forms.
17. Prepare and mail account and X
confirmation statements for
Shareholders.
18. Provide Shareholder account X
information.
19. Blue sky reporting. X
* Such services are more fully described in Section 1.2 (a), (b) and (c)
of the Agreement.
THE RBB FUND, INC.
BY: /s/ Edward J. Roach
-------------------------------
The RBB Fund, Inc.
Edward J. Roach
President & Treasurer
ATTEST:
/s/ ???
- ---------------------------
Assistant Secretary
STATE STREET BANK AND TRUST COMPANY
BY: /s/ ???
------------------------------
Executive Vice President
ATTEST:
/s/ ???
- ----------------------------
<PAGE> 19
SCHEDULE A
BEA International Equity - Institutional
BEA Emerging Markets Equity - Institutional
BEA US Core Equity - Institutional
BEA Balanced - Institutional
BEA US Core Fixed Income - Institutional
BEA Strategic Global Fixed Income Fund-Institutional
BEA High Yield - Institutional
BEA Municipal Bond - Institutional
BEA International Equity - Advisor
BEA Emerging Markets Equity - Advisor
BEA Global Telecommunications - Advisor
BEA High Yield - Advisor
<PAGE> 20
[BEA ASSOCIATES LETTERHEAD]
October 9, 1997
Mr. Suresh Patel
Boston Financial Data Services, Inc.
Two Heritage Drive - 3rd Floor
Quincy, MA 02171
Dear Suresh:
Pursuant to previous conversations, this letter is to confirm that we are in
agreement to the billing methodology that is in place for the BEA Portfolios of
The RBB Fund, Inc. The current minimum annual fee payable to Boston Financial
Data Services, Inc. of $226,000 ($126,000 for seven Institutional Portfolios
and $100,000 for four Advisor Portfolios) will be billed at the complex level.
The fee will then be allocated to each Portfolio based on its total assets in
aggregate (versus share class). Based on the original fee schedule, $30,000 of
the $226,000 will be waived for the first year that the agreement is in place.
If you are in agreement with the above, please sign this letter where indicated
and return to me.
If you have any questions, please do not hesitate to contact me.
Very truly yours,
/s/ Wendy Setnicka
- ------------------------
Wendy Setnicka
Assistant Vice President
The information included herein is correct.
Signature: /s/ Suresh Patel Title:
----------------- ---------------------
Suresh Patel
<PAGE> 21
[STATE STREET LOGO]
FEE INFORMATION FOR SERVICES AS
PLAN, TRANSFER AND DIVIDEND DISBURSING AGENT
BEA ASSOCIATES
<TABLE>
<S> <C>
ANNUAL ACCOUNT SERVICE FEES
DAILY DIVIDEND FUND $ 14.00
NON-DAILY DIVIDEND FUND $ 12.00
CLOSED ACCOUNT FEE $ 1.50
COMPLEX MINIMUM
INSTITUTIONAL (UP TO 9 CUSIPS) $162,000
*RETAIL (UP TO 4 CUSIPS) $100,000
NEW CUSIPS $18,000
</TABLE>
FEES ARE BILLABLE ON A MONTHLY BASIS AT THE RATE OF 1/12 OF THE ANNUAL FEE. A
CHARGE IS MADE FOR AN ACCOUNT IN THE MONTH THAT AN ACCOUNT OPENS OR CLOSES.
ACCOUNT SERVICE FEES ARE THE HIGHER OF: OPEN ACCOUNT CHARGES PLUS CLOSED
ACCOUNT CHARGES OR THE COMPLEX MINIMUM.
<TABLE>
<S> <C>
ACTIVITY BASED FEES
NEW ACCOUNT SET-UP $ 5.00/EACH
MANUAL TRANSACTIONS $ 1.50/EACH
TELEPHONE CALLS $ 2.50/EACH
CORRESPONDENCE $ 1.50/EACH
RESEARCH REQUESTS $ 1.50/EACH
THIRD PARTY INTERFACE $10,000/ANNUALLY/PER INTERFACE
BANKING SERVICES
CHECKWRITING SETUP $ 5.00
CHECKWRITING (PER DRAFT) $ 1.00
ACH $ .35
OTHER FEES
INVESTOR PROCESSING $ 1.80/INVESTOR
12b-1 COMMISSIONS $ 1.20/ACCOUNT
CONVERSION FEES
PER ACCOUNT FEE $ 1.00
MINIMUM (PER COMPLEX) $ 20,000
IRA CUSTODIAL FEES
ANNUAL MAINTENANCE $ 20.00/ACCOUNT
</TABLE>
<PAGE> 22
[STATE STREET BANK LOGO]
OUT-OF-POCKET EXPENSES BILLED AS INCURRED
Out-of-Pocket expenses include but are not limited to: confirmation statements,
investor statements, postage, forms, audio response, telephone, records
retention, federal wire, transcripts, microfilm, microfiche, and expenses
incurred at the specific direction of the fund.
* This fee will be phased in for a one year period.
BEA ASSOCIATES STATE STREET BANK AND TRUST CO.
By By /s/ ???
-------------------- ------------------------
Title Title ???
-------------------- ------------------------
Date Date 11/4/96
-------------------- ------------------------
REVISED 10/31/96
<PAGE> 23
[STATE STREET LOGO]
ADDENDUM TO FEE SCHEDULE
BEA ASSOCIATES
- -------------------------------------------------------------------------------
The Retail Complex Minimum will be phased in over a one year period as follows:
RETAIL COMPLEX MINIMUM
- ----------------------
Months 0 - 3 $10,000
Months 4 - 6 $15,000
Months 7 - 9 $20,000
Months 10 - 12 $25,000
BEA ASSOCIATES STATE STREET BANK AND TRUST CO.
By By /s/ ????????
------------------------------- -----------------------------
Title Title ????????
--------------------------- --------------------------
Date Date 4/4/96
---------------------------- --------------------------
Revised 10/31/96
<PAGE> 1
Exhibit 9(b)
<PAGE> 2
CO-ADMINISTRATION AGREEMENT
_________ ___, 1998
Counsellors Funds Service, Inc.
466 Lexington Avenue
New York, New York 10017-3147
Dear Sirs:
Warburg, Pincus [ ] Fund, Inc. (the "Fund"), a corporation
organized and existing under the laws of the State of Maryland, confirms its
agreement with Counsellors Funds Service, Inc. ("Counsellors Service") as
follows:
1. Investment Description; Appointment
The Fund desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Articles of Incorporation, as amended from time to time (the
"Articles"), in its By-laws, as amended from time to time (the "By-laws"), in
the Fund's prospectus (the "Prospectus") and Statement of Additional Information
(the "Statement of Additional Information") as in effect from time to time, and
in such manner and to the extent as may from time to time be approved by the
Board of Directors of the Fund. Copies of the Prospectus, Statement of
Additional Information and the Articles and By-laws have been submitted to
Counsellors Service. The Fund employs BEA Associates (the "Adviser") as its
investment adviser and desires to employ and hereby appoints Counsellors Service
as its co-administrator. Counsellors Service accepts this appointment and agrees
to furnish the services for the compensation set forth below.
2. Services as Co-Administrator
Subject to the supervision and direction of the Board of
Directors of the Fund, Counsellors Service will:
(a) assist in supervising all aspects of the Fund's
operations, except those performed by other parties pursuant to written
agreements with the Fund;
(b) provide various shareholder liaison services including,
but not limited to, responding to inquiries of shareholders regarding the Fund,
providing information on shareholder investments, assisting shareholders of the
Fund in changing dividend options, account designations and addresses, and other
similar services;
(c) provide certain administrative services including, but not
limited to, providing periodic statements showing the
<PAGE> 3
account balance of a Fund shareholder and integrating the statements with those
of other transactions and balances in the shareholder's other accounts serviced
by the Fund's custodian or transfer agent;
(d) supply the Fund with office facilities (which may be
Counsellors Service's own offices), data processing services, clerical, internal
executive and administrative services, and stationery and office supplies;
(e) furnish corporate secretarial services, including
assisting in the preparation of materials for Board of Directors' meetings and
distributing those materials and preparing minutes of meetings of the Fund's
Board of Directors and any committees thereof and of the Fund's shareholders;
(f) coordinate the preparation of reports to the Fund's
shareholders of record and filings with the Securities and Exchange Commission
(the "SEC") including, but not limited to, proxy statements; annual, semi-annual
and quarterly reports to shareholders; and post-effective amendments to the
Fund's Registration Statement on Form N-1A (the "Registration Statement");
(g) assist in the preparation of the Fund's tax returns and
assist in other regulatory filings as necessary;
(h) assist the Adviser, at the Adviser's request, in
monitoring and developing compliance procedures for the Fund which will include,
among other matters, procedures to assist the Adviser in monitoring compliance
with the Fund's investment objective, policies, restrictions, tax matters and
applicable laws and regulations; and
(i) act as liaison between the Fund and the Fund's independent
public accountants, counsel, custodian or custodians, transfer agent and
co-administrator and take all reasonable action in the performance of its
obligations under this Agreement to assure that all necessary information is
made available to each of them.
In performing all services under this Agreement, Counsellors
Service shall act in conformity with applicable law, the Articles and By-laws,
and the investment objective, investment policies and other practices and
policies set forth in the Registration Statement, as such Registration Statement
and practices and policies may be amended from time to time.
3. Compensation
In consideration of services rendered pursuant to this
Agreement, the Fund will pay Counsellors Service on the first business day of
each month a fee for the previous month at an annual rate of: (i) .05% of the
Fund's average daily net assets
-2-
<PAGE> 4
attributable to Common Shares for assets up to $125 million, plus .10%
thereafter; and (ii) .10% of the Fund's average daily net assets attributable to
Advisor Shares. Counsellors Service shall provide co-administrative services
with respect to the Fund's Institutional Shares without compensation. The fee
for the period from the date the Fund commences its investment operations to the
end of the month during which the Fund commences its investment operations shall
be prorated according to the proportion that such period bears to the full
monthly period. Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to Counsellors Service, fees shall be calculated
monthly and the value of the Fund's net assets shall be computed at the times
and in the manner specified in the Prospectus and Statement of Additional
Information as from time to time in effect.
4. Expenses
Counsellors Service will bear all expenses in connection with
the performance of its services under this Agreement; provided, however, that
the Fund will reimburse Counsellors Service for the out-of-pocket expenses
incurred by it on behalf of the Fund. Such reimbursable expenses shall include,
but not be limited to, postage, telephone, telex and FedEx charges. Counsellors
Service will bill the Fund as soon as practicable after the end of each calendar
month for the expenses it is entitled to have reimbursed.
The Fund will bear certain other expenses to be incurred in
its operation, including: taxes, interest, brokerage fees and commissions, if
any; fees of Directors of the Fund who are not officers, directors, or employees
of the Adviser or Counsellors Service; SEC fees and state blue sky qualification
fees; charges of custodians and transfer and dividend disbursing agents; certain
insurance premiums; outside auditing and legal expenses; costs of maintenance of
corporate existence; except as otherwise provided herein, costs attributable to
investor services, including without limitation, telephone and personnel
expenses; costs of preparing and printing prospectuses and statements of
additional information for regulatory purposes and for distribution to existing
shareholders; costs of shareholders' reports and meetings, and meetings of the
officers of the Board of Directors of the Fund; costs of any pricing services;
and any extraordinary expenses.
-3-
<PAGE> 5
5. Standard of Care
Counsellors Service shall exercise its best judgment in
rendering the services listed in paragraph 2 above. Counsellors Service shall
not be liable for any error of judgment or mistake of law or for any loss
suffered by the Fund in connection with the matters to which this Agreement
relates provided that nothing in this Agreement shall be deemed to protect or
purport to protect Counsellors Service against liability to the Fund or its
shareholders to which Counsellors Service would otherwise be subject by reason
of willful misfeasance, bad faith or negligence on its part in the performance
of its duties or by reason of Counsellors Service's reckless disregard of its
obligations and duties under this Agreement.
6. Term of Agreement
This Agreement shall become effective as of the date the Fund
commences its investment operations and shall continue until April 17, 2000 and
shall continue automatically (unless terminated as provided herein) for
successive annual periods ending on April 17th of each year, provided that such
continuance is specifically approved at least annually by the Board of Directors
of the Fund, including a majority of the Board of Directors who are not
"interested persons" (as defined in the Investment Company Act of 1940, as
amended) of any party to this Agreement, by vote cast in person at a meeting
called for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on sixty (60) days' written notice, by the Board of Directors
of the Fund or by vote of holders of a majority of the Fund's shares, or upon
sixty (60) days' written notice, by Counsellors Service.
7. Service to Other Companies or Accounts
The Fund understands that Counsellors Service now acts, will
continue to act and may act in the future as administrator, co-administrator or
administrative services agent to one or more other investment companies, and the
Fund has no objection to Counsellors Service's so acting. The Fund understands
that the persons employed by Counsellors Service to assist in the performance of
Counsellors Service's duties hereunder will not devote their full time to such
service and nothing contained in this Agreement shall be deemed to limit or
restrict the right of Counsellors Service or any affiliate of Counsellors
Service to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
-4-
<PAGE> 6
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance hereof by signing and returning to us the
enclosed copy hereof.
Very truly yours,
WARBURG, PINCUS [ ]
FUND, INC.
By: ____________________
Name: __________________
Title: _________________
Accepted:
COUNSELLORS FUNDS SERVICE, INC.
By: _____________________
Name: ___________________
Title: __________________
-5-
<PAGE> 1
Exhibit 9(c)
<PAGE> 2
CO-ADMINISTRATION AGREEMENT
TERMS AND CONDITIONS
This Agreement is made as of ____________ ___, 1998 by and
between Warburg, Pincus [ ] Fund, Inc. (the "Fund"), a Maryland
corporation, 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, and
PFPC wishes to furnish such services.
In consideration of the promises and mutual covenants herein
contained, the parties agree as follows:
1. Definitions.
(a) "Authorized Person." The term "Authorized Person" shall
mean any officer of the Fund and any other person, who is duly authorized by the
Fund's 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.
(b) "Board of Directors." The term "Board of Directors" shall
mean the Fund's Board of Directors or, where duly authorized, a competent
committee thereof.
(c) "CFTC." The term "CFTC" shall mean the Commodities Futures
Trading Commission.
(d) "Oral Instructions." The term "Oral Instructions" shall
mean oral instructions received by PFPC from an Authorized Person or from a
person reasonably believed by PFPC to be an Authorized Person.
(e) "PNC." The term "PNC" shall mean PNC Bank or a subsidiary
or affiliate of PNC Bank.
(f) "SEC." The term "SEC" shall mean the Securities and
Exchange Commission.
(g) "Securities and Commodities Laws." The terms the "1933
Act" shall mean the Securities Act of 1933, as amended, the "1934 Act" shall
mean the Securities Exchange Act of 1934, as
<PAGE> 3
amended, the "1940 Act" shall mean the Investment Company Act 1940, as amended,
and the "CEA" shall mean the Commodities Exchange Act, as amended.
(h) "Services." The term "Services" shall mean the service
provided to the Fund by PFPC.
(i) "Shares." The term "Shares" shall mean the shares of any
class of common stock, par value $.001 per share, of the Fund.
(j) "Property." The term "Property" shall mean:
(i) 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;
(ii) all income in respect of any of such securities or
other investment items;
(iii) all proceeds of the sale of any of such securities
or investment items; and
(iv) all proceeds of the sale of securities issued by the
Fund, which are received by PNC from time to time,
from or on behalf of the Fund.
(k) "Written Instructions." The term "Written Instructions"
shall mean written instructions signed by two Authorized Persons and received by
PFPC. The instructions may be delivered by hand, mail, tested telegram, cable,
telex or facsimile sending device.
2. Appointment.
The Fund hereby appoints PFPC to provide administration and
accounting services, in accordance with the terms set forth in this Agreement.
PFPC accepts such appointment and agrees to furnish such services.
3. Delivery of Documents.
The Fund has provided or, where applicable, will provide PFPC
with the following:
2
<PAGE> 4
(a) certified or authenticated copies of the resolutions
of the Board of Directors, approving the appointment
of PNC or its affiliates to provide services to the
Fund;
(b) a copy of the Fund's most recent effective
registration statement;
(c) a copy of the Fund's advisory agreement;
(d) a copy of the Fund's distribution agreements;
(e) a copy of the Fund's co-administration agreement if
PFPC is not providing the Fund with such services;
(f) copies of any shareholder servicing agreements made
in respect of the Fund; and
(g) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. Compliance with Government Rules and Regulations. PFPC
undertakes to comply with all applicable requirements of the 1933 Act, the 1934
Act, the 1940 Act, and the CEA, and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to all duties to be
performed by PFPC hereunder. Except as specifically set forth herein, PFPC
assumes no responsibility for such compliance by the Fund.
5. 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 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
3
<PAGE> 5
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.
6. Right to Receive Advice.
(a) 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.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
questions of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's investment adviser (the "Adviser") or PFPC, at
the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions PNC receives from the Fund,
and the advice it receives from counsel, PFPC shall be entitled to rely upon and
follow the advice of counsel.
(d) Protection of PFPC. PFPC shall be protected in any action
it takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the 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.
7. Records.
The books and records pertaining to the Fund, 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
4
<PAGE> 6
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:
(a) all books and records with respect to the Fund's
books of account;
(b) records of the Fund's securities transactions; and
(c) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act and
as specifically set forth in Appendix A hereto.
8. Confidentiality.
PFPC agrees to keep confidential all records of the Fund and
information relative to the Fund 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.
9. Liaison with Accountants.
PFPC shall act as liaison with the Fund'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.
10. 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
5
<PAGE> 7
expense to the Fund, take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
11. Compensation.
As compensation for services rendered by PFPC during the term
of this Agreement, the Fund will pay PFPC a fee or fees as may be agreed to in
writing by the Fund and PFPC.
12. Indemnification.
The Fund 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 Fund or to its shareholders (or any expenses
incident to such liability) arising out of PFPC's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties and obligations under this
Agreement.
13. Responsibility of PFPC.
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 Fund 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
6
<PAGE> 8
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.
14. Description of Accounting Services.
(a) Services on a Continuing Basis. PFPC will perform the
following accounting functions if required:
(i) Journalize the Fund's investment, capital
share and income and expense activities;
(ii) Verify investment buy/sell trade tickets
when received from the Adviser and transmit
trades to the Fund's custodian for proper
settlement;
(iii) Maintain individual ledgers for investment
securities;
(iv) Maintain historical tax lots for each
security;
(v) Reconcile cash and investment balances of
the Fund with the custodian, and provide the
Adviser with the beginning cash balance
available for investment purposes;
(vi) Update the cash availability throughout the
day as required by the Adviser;
(vii) Post to and prepare the Fund's Statement of
Assets and Liabilities and the Statement of
Operations;
7
<PAGE> 9
(viii) Calculate various contractual expenses
(e.g., advisory and custody fees);
(ix) Monitor the expense accruals and notify the
Fund's management of any proposed
adjustments;
(x) Control all disbursements from the Fund and
authorize such disbursements upon Written
Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine the Fund's net income;
(xiii) Obtain security market quotes from
independent pricing services approved by the
Adviser, or if such quotes are unavailable,
then obtain such prices from the Adviser,
and in either case calculate the market
value of the Fund's investments;
(xiv) Transmit or mail a copy of the daily
portfolio valuation to the Adviser;
(xv) Compute the net asset value of the Fund;
(xvi) As appropriate, compute the Fund's yield,
total return, expense ratios, portfolio
turnover rate, and, if required, portfolio
average dollar-weighted maturity; and
(xvii) Prepare a monthly financial statement, which
will include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
15. Description of Administration Services.
(a) Services on a Continuing Basis.
8
<PAGE> 10
(i) Prepare quarterly broker security
transactions summaries;
(ii) Prepare monthly security transaction
listings;
(iii) Prepare for execution and file the Fund's
federal and state tax returns;
(iv) Prepare and file the Fund's semiannual
reports with the SEC on Form N-SAR;
(v) Prepare and file with the SEC the Fund's
annual and semiannual shareholder reports;
(vi) Assist with the preparation of registration
statements and other filings relating to the
registration of Shares; and
(vii) Monitor the Fund's status as a regulated
investment company under Sub-Chapter M of
the Internal Revenue Code of 1986, as
amended.
16. 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.
17. 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, 400 Bellevue Parkway, Wilmington, Delaware
19809; (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.
9
<PAGE> 11
18. 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.
19. 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.
20. 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.
21. Further Actions.
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the purposes hereof.
22. 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
10
<PAGE> 12
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, PINCUS [ ] FUND, INC.
By: __________________________
Name: _____________________
Title: ____________________
11
<PAGE> 13
APPENDIX A
None.
12
<PAGE> 14
_______ ___, 1998
Warburg, Pincus [ ] Fund, Inc.
466 Lexington Avenue
New York, New York 10017
RE: CO-ADMINISTRATION SERVICE FEES
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 _________ ___, 1998 between you (the "Fund")
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 Fund,
including, but not limited to: postage and handling, telephone, telex, FedEx and
outside pricing service charges.
The annual administration and accounting fee shall be the
following percentages of the Fund's average daily net assets attributable to the
various classes of shares indicated:
<TABLE>
<CAPTION>
Percentage Net Assets
---------- ----------
<S> <C> <C>
COMMON SHARES &
INSTITUTIONAL SHARES:
0.125% All assets
ADVISOR SHARES:
0.120% First US$250,000,000
0.100% Next US$250,000,000
0.080% Next US$250,000,000
0.050% Over US$750,000,000
</TABLE>
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.
<PAGE> 15
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, PINCUS [ ] FUND, INC.
By: _______________________
Name: _____________________
Title: ____________________
-2-
<PAGE> 1
Exhibit 10(a)
<PAGE> 2
[LETTERHEAD OF WILLKIE FARR & GALLAGHER]
August 11, 1998
Warburg, Pincus Emerging Markets II Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
Ladies and Gentlemen:
We have acted as counsel to Warburg, Pincus Emerging Markets II Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland, in
connection with the preparation of a registration statement on Form N-1A
covering the offer and sale of an indefinite number of shares of Common Stock of
the Fund (the "Common Stock"), one billion of which are designated "Common
Shares," one billion of which are designated "Institutional Shares," and one
billion of which are designated "Advisor Shares," par value $.001 per share
(collectively, the "Shares").
We have examined copies of the Charter and By-Laws of the Fund, as amended, the
Fund's prospectuses and statements of additional information (the "Statements of
Additional Information") included in its Registration Statement on Form N-1A,
Securities Act File No. 333-60677 and Investment Company Act File No. 811-08937
(the "Registration Statement"), all resolutions adopted by the Fund's Board of
Directors (the "Board") at its organizational meeting held on July 20, 1998,
consents of the Board and other records, documents and papers that we have
deemed necessary for the purpose of this opinion. We have also examined such
other statutes and authorities as we have deemed necessary to form a basis for
the opinion hereinafter expressed.
In our examination of material, we have assumed the genuineness of all
signatures and the conformity to original documents of all copies submitted to
us. As to various questions of fact material to our opinion, we have relied upon
statements and certificates of officers and representatives of the Fund and
others.
<PAGE> 3
Warburg, Pincus Emerging
Markets II Fund, Inc.
August 11, 1998
Page 2
Based upon the foregoing, we are of the opinion that:
1. The Fund is duly organized and validly existing as a
corporation in good standing under the laws of the State of
Maryland.
2. The three presently issued and outstanding shares of Common
Stock representing one Common Share, one Institutional Share
and one Advisor share in the Fund have been validly and
legally issued and are fully paid and nonassessable.
3. The Shares of the Fund to be offered for sale pursuant to the
Registration Statement are, to the extent of the number of
Shares authorized to be issued by the Fund in its Charter,
duly authorized and, when sold, issued and paid for as
contemplated by the Registration Statement, will have been
validly and legally issued and will be fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, to the reference to us in the Statements of Additional
Information and to the filing of this opinion as an exhibit to any application
made by or on behalf of the Fund or any distributor or dealer in connection with
the registration or qualification of the Fund or the Shares under the securities
laws of any state or other jurisdiction.
We are members of the Bar of the State of New York only and do not opine as to
the laws of any jurisdiction other than the laws of the State of New York and
the laws of the United States, and the opinions set forth above are,
accordingly, limited to the laws of those jurisdictions. As to matters involving
the application of the laws of the State of Maryland, we have relied on the
opinion of Messrs. Venable, Baetjer and Howard, LLP.
Very truly yours,
/s/ Willkie Farr & Gallagher
<PAGE> 1
EXHIBIT 10(b)
VENABLE, BAETJER AND HOWARD, LLP
1800 MERCANTILE BANK AND TRUST BUILDING
TWO HOPKINS PLAZA
BALTIMORE, MARYLAND 21201
August 14, 1998
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Re: Warburg, Pincus Emerging Markets II Fund, Inc.
Ladies and Gentlemen:
We have acted as special Maryland counsel for Warburg, Pincus
Emerging Markets II Fund, Inc., a Maryland corporation (the "Fund"), in
connection with the organization of the Fund and the issuance of shares of its
common stock, par value $.001 per share including the Common Shares, the
Institutional Shares and the Advisor Shares.
As Maryland counsel for the Fund, we are familiar with its
Charter and Bylaws, as amended. We have examined its Registration Statement on
Form N-1A, Securities Act File No. 333-60677 and Investment Company Act File No.
811-08937, including the prospectus and statement of additional information
contained therein, substantially in the form in which it is to become effective
(the "Registration Statement"). We have further examined and relied upon a
certificate of the Maryland State Department of Assessments and Taxation to the
effect that the Fund is duly incorporated and existing under the laws of the
State of Maryland and is in good standing and duly authorized to transact
business in the State of Maryland.
We have also examined and relied upon such corporate records
of the Fund and other documents and certificates with respect to factual matters
as we have deemed necessary to render the opinion expressed herein. We have
assumed, without independent verification, the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with originals of all documents submitted to us as copies.
<PAGE> 2
Based on such examination, we are of the opinion and so advise
you that:
1. The Fund is a corporation duly organized and validly
existing in good standing under the laws of the State
of Maryland.
2. The 3 presently issued and outstanding shares of
common stock of the Fund including one Common Share,
one Institutional Share and one Advisor Share have
been duly authorized and are validly issued, fully
paid and nonassessable.
3. The Common Shares, the Institutional Shares and the
Advisor Shares of the Fund to be offered for sale
pursuant to the Registration Statement are, to the
extent of the number of shares authorized to be
issued by the Fund in its Charter, duly authorized
and, when sold, issued and paid for as contemplated
by the Registration Statement, will have been validly
and legally issued and will be fully paid and
nonassessable.
This letter expresses our opinion with respect to the Maryland
General Corporation Law governing matters such as due organization and the
authorization and issuance of stock. It does not extend to the securities or
"blue sky" laws of Maryland, to federal securities laws or to other laws.
You may rely upon our foregoing opinion in rendering your
opinion to the Fund that is to be filed as an exhibit to the Registration
Statement. We consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/VENABLE, BAETJER AND HOWARD, LLP
2
<PAGE> 1
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the
pre-effective amendment to the Registration Statement of the Warburg, Pincus
Emerging Markets II Fund, Inc. on Form N-1A (File No. 333-60677) of our report
dated October 17, 1997 on our audit of the financial statements and financial
highlights of the BEA Emerging Markets Equity Fund, a portfolio of The RBB Fund,
Inc., which report is included in the Annual Report to shareholders for the year
ended August 31, 1997, which is incorporated by reference in the Registration
Statement. We also consent to the reference to our Firm under the heading
"Financial Highlights" in the Prospectus and under the heading "Independent
Accountants and Counsel" in the Statement of Additional Information.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
August 13, 1998
<PAGE> 1
Exhibit 13
<PAGE> 2
PURCHASE AGREEMENT
Warburg, Pincus [ ] Fund, Inc. (the "Fund"), a
corporation organized under the laws of the State of Maryland, and Warburg
Pincus Asset Management, Inc. ("Warburg") hereby agree as follows:
1. The Fund offers Warburg and Warburg hereby purchases three
shares of common stock of the Fund, one of which shall be designated a Common
Share, another designated an Institutional Share and another designated an
Advisor Share, having a par value $.001 per share (the "Shares"), at a price of
$10.00 per Share (the "Initial Shares"). Warburg hereby acknowledges receipt of
a certificate representing the Initial Shares and the Fund hereby acknowledges
receipt from Warburg of $30.00 in full payment for the Initial Shares.
2. Warburg represents and warrants to the Fund that the
Initial Shares are being acquired for investment purposes and not for the
purpose of distributing them.
3. Warburg agrees that if any holder of the Initial Shares
redeems such Shares in the Fund before five years after the date upon which the
Fund commences its investment activities, the redemption proceeds will be
reduced by the amount of unamortized organizational expenses, in the same
proportion as the Initial Shares being redeemed bears to the Initial Shares
outstanding at the time of redemption. The parties hereby acknowledge that any
Shares acquired by Warburg other than the Initial Shares have not
<PAGE> 3
been acquired to fulfill the requirements of Section 14 of the Investment
Company Act of 1940, as amended, and, if redeemed, their redemption proceeds
will not be subject to reduction based on the unamortized organizational
expenses of the Fund.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the ____ day of ________________, 1998.
WARBURG, PINCUS [ ]
FUND, INC.
By:_________________________________
Name:
Title:
ATTEST:
________________
WARBURG PINCUS ASSET MANAGEMENT, INC.
By:_________________________________
Name:
Title:
ATTEST:
________________
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<PAGE> 1
Exhibit 15(a)
<PAGE> 2
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
This Shareholder Servicing and Distribution Plan ("Plan") is
adopted by Warburg, Pincus [ ] Fund, Inc., a corporation organized under the
laws of State of Maryland (the "Fund"), with respect to the common stock, par
value $.001 per share, of the Fund designated Common Shares (the "Common
Shares") pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "1940 Act"), subject to the following terms and
conditions:
SECTION 1. AMOUNT OF PAYMENTS.
The Fund will pay Counsellors Securities Inc. ("Counsellors
Securities"), a corporation organized under the laws of the State of New York,
for shareholder servicing and distribution services provided to the Common
Shares, an annual fee of up to .25% of the value of the average daily net assets
of the Shares. Fees to be paid with respect to the Fund under this Plan will be
calculated daily and paid monthly by the Fund.
SECTION 2. SERVICES PAYABLE UNDER THE PLAN.
(a) The annual fees described above payable with respect to
the Fund are intended to compensate Counsellors Securities, or enable
Counsellors Securities to compensate other persons ("Service Providers"),
including any other distributor of Common Shares, for providing (i) ongoing
servicing and/or maintenance of the accounts of holders of Common Shares
("Shareholder Services"); (ii) services that are primarily intended to result
in, or that are primarily attributable to, the sale of Common Shares ("Selling
Services"); and/or (iii) subtransfer agency services, subaccounting services or
administrative services with respect to Common Shares ("Administrative
Services"). Shareholder Services may include, among other things, responding to
inquiries of prospective investors regarding the Fund and services to
shareholders not otherwise required to be provided by the Fund's custodian or
any co-administrator. Selling Services may include, but are not limited to: the
printing and distribution to prospective investors in Common Shares of
prospectuses and statements of additional information describing the Fund; the
preparation, including printing, and distribution of sales literature, reports
and media advertisements relating to the Common Shares; providing telephone
services relating to the Fund; distributing Common Shares; costs relating to the
formulation and implementation of marketing and promotional activities,
including, but not limited to, direct mail promotions and television, radio,
newspaper, magazine and other mass media advertising, and related travel and
entertainment expenses; and costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional activities that
the Fund may, from time to time, deem
<PAGE> 3
advisable. In providing compensation for Selling Services in accordance with
this Plan, Counsellors Securities is expressly authorized (i) to make, or cause
to be made, payments reflecting an allocation of overhead and other office
expenses related to providing Services; (ii) to make, or cause to be made,
payments, or to provide for the reimbursement of expenses of, persons who
provide support services in connection with the distribution of Common Shares
including, but not limited to, office space and equipment, telephone facilities,
answering routine inquiries regarding the Fund, and providing any other Service;
and (iii) to make, or cause to be made, payments to compensate selected dealers
or other authorized persons for providing any Services. Administrative Services
may include, but are not limited to, establishing and maintaining accounts and
records on behalf of Fund shareholders; processing purchase, redemption and
exchange transactions in Common Shares; and other similar services not otherwise
required to be provided by the Fund's transfer agent or any co-administrator.
(b) Payments under this Plan are not tied exclusively to the
expenses for shareholder servicing, administration and distribution expenses
actually incurred by Counsellors Securities or any Service Provider, and the
payments may exceed expenses actually incurred by Counsellors Securities and/or
a Service Provider. Furthermore, any portion of any fee paid to Counsellors
Securities or to any of its affiliates by the Fund or any of their past profits
or other revenue may be used in their sole discretion to provide services to
shareholders of the Fund or to foster distribution of Common Shares.
SECTION 3. ADDITIONAL PAYMENTS.
Counsellors Securities, the Fund's investment adviser (the
"Investment Adviser") or an affiliate of either may pay certain broker-dealers,
financial institutions and other industry professionals ("Service
Organizations") for providing administration, subaccounting, transfer agency
and/or other services with respect to holders of Common Shares and certain
recordkeeping organizations a fee (the "Service Fee"). A portion of the Service
Fee may be borne by the Fund. The Service Fee payable to any one Service
Organization is determined based upon a number of factors, including the nature
and quality of service provided, the operations processing requirements of the
relationship and the standardized fee schedule of the Service Organization or
recordkeeper. Payments by the Fund under this Plan shall not be made to a
Service Organization with respect to services for which the Service Organization
is otherwise compensated by Counsellors Securities, the Investment Adviser or an
affiliate of either.
Payments may be made to Service Organizations by Counsellors
Securities, the Investment Adviser or an affiliate of either from any such
entity's own resources, which may include a fee it received from the Fund.
-2-
<PAGE> 4
SECTION 4. APPROVAL OF PLAN.
Neither this Plan nor any related agreements will take effect
until approved by a majority of (a) the outstanding voting Common Shares, (b)
the full Board of Directors of the Fund and (c) those Directors who are not
interested persons of the Fund and who have no direct or indirect financial
interest in the operation of this Plan or in any agreements related to it (the
"Independent Directors"), cast in person at a meeting called for the purpose of
voting on this Plan and the related agreements.
SECTION 5. CONTINUANCE OF PLAN.
This Plan will continue in effect with respect to the Common
Shares from year to year so long as its continuance is specifically approved
annually by vote of the Fund's Board of Directors in the manner described in
Section 4(b) and 4(c) above. The Fund's Board of Directors will evaluate the
appropriateness of this Plan and its payment terms on a continuing basis and in
doing so will consider all relevant factors, including the types and extent of
Shareholder Services, Selling Services and Administrative Services provided by
Counsellors Securities and/or Service Providers and amounts Counsellors
Securities and/or Service Providers receive under this Plan.
SECTION 6. TERMINATION.
This Plan may be terminated at any time with respect to the
Common Shares by vote of a majority of the Independent Directors or by a vote of
a majority of the outstanding voting Common Shares.
SECTION 7. AMENDMENTS.
This Plan may not be amended to increase materially the amount
of the fees described in Section 1 above with respect to the Common Shares
without approval of at least a majority of the outstanding voting Common Shares.
In addition, all material amendments to this Plan must be approved in the manner
described in Section 4(b) and 4(c) above.
SECTION 8. SELECTION OF CERTAIN DIRECTORS.
While this Plan is in effect with respect to the Fund, the
selection and nomination of the Fund's Directors who are not interested persons
of the Fund will be committed to the discretion of the Directors then in office
who are not interested persons of the Fund.
-3-
<PAGE> 5
SECTION 9. WRITTEN REPORTS.
In each year during which this Plan remains in effect with
respect to the Fund, any person authorized to direct the disposition of monies
paid or payable by the Fund pursuant to the Plan or any related agreement will
prepare and furnish to the Fund's Board of Directors, and the Board will review,
at least quarterly, written reports, complying with the requirements of the
Rule, which set out the amounts expended under this Plan and the purposes for
which those expenditures were made.
SECTION 10. PRESERVATION OF MATERIALS.
The Fund will preserve copies of this Plan, any agreement
relating to this Plan and any report made pursuant to Section 8 above, for a
period of not less than six years (the first two years in an easily accessible
place) from the date of this Plan, the agreement or the report.
SECTION 11. MEANING OF CERTAIN TERMS.
As used in this Plan, the terms "interested person" and
"majority of the outstanding voting securities" will be deemed to have the same
meanings that those terms have under the 1940 Act and the rules and regulations
under the 1940 Act, subject to any exemption that may be granted to the Fund
under the 1940 Act by the Securities and Exchange Commission.
SECTION 12. DATE OF EFFECTIVENESS.
This Plan will become effective as of the date the Fund first
commences its investment operations.
IN WITNESS WHEREOF, the Fund has executed this Plan as of the
_____ day of _______, 1998.
WARBURG, PINCUS [ ] FUND,
INC.
By:
Name: _____________________________
Title: ____________________________
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<PAGE> 1
Exhibit 15(b)
<PAGE> 2
DISTRIBUTION PLAN
This Distribution Plan (the "Plan") is adopted in accordance
with Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), by Warburg, Pincus [ ] Fund, Inc., a corporation organized under the
laws of the State of Maryland (the "Fund"), subject to the following terms and
conditions:
Section 1. Distribution Agreements; Annual Fee.
Any officer of the Fund or Counsellors Securities Inc., the
Fund's distributor ("Counsellors Securities"), is authorized to execute and
deliver written agreements in any form duly approved by the Board of Directors
of the Fund (the "Agreements") with institutional shareholders of record,
broker-dealers, financial institutions, depository institutions, retirement
plans and other financial intermediaries ("Service Organizations") relating to
shares of the Fund's common stock, par value $.001 per share, designated Advisor
Shares (the "Advisor Shares"). Pursuant to an Agreement, Service Organizations
will be paid an annual fee out of the assets of the Fund by the Fund directly or
by Counsellors Securities on behalf of the Fund for providing (a) services
primarily intended to result in the sale of Advisor Shares ("Distribution
Services"), (b) shareholder servicing to their customers or clients who are the
record and/or the beneficial owners of Advisor Shares ("Customers")
("Shareholder Services") and/or (c) administrative and accounting services to
Customers ("Administrative Services"). A Service Organization will be paid an
annual fee under the Plan calculated daily and paid quarterly at an annual rate
of up to .50% of the average daily net assets of the Advisor Shares held by or
on behalf of its Customers ("Customers' Shares") with respect to Distribution
Services and/or Administrative Services and may be paid an annual fee calculated
daily and paid quarterly at an annual rate of up to .25% of the average daily
net assets of Customers' Shares with respect to Shareholder Services.
Section 2. Services.
The annual fee paid to Service Organizations under Section 1
of the Plan with respect to Distribution Services, if any, will compensate
Service Organizations to cover certain expenses primarily intended to result in
the sale of Advisor Shares, including, but not limited to: (a) costs of payments
made to employees that engage in the distribution of Advisor Shares; (b)
payments made to, and expenses of, persons who provide support services in
connection with the distribution of Advisor Shares, including, but not limited
to, office space and equipment, telephone facilities, processing shareholder
transactions and providing any other shareholder services not otherwise provided
by the Fund's transfer agent; (c) costs
<PAGE> 3
relating to the formulation and implementation of marketing and promotional
activities, including, but not limited to, direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising; (d)
costs of printing and distributing prospectuses, statements of additional
information and reports of the Fund to prospective holders of Advisor Shares;
(e) costs involved in preparing, printing and distributing sales literature
pertaining to the Fund and (f) costs involved in obtaining whatever information,
analyses and reports with respect to marketing and promotional activities that
the Fund may, from time to time, deem advisable.
The annual fee paid to Service Organizations under Section 1
of the Plan with respect to Shareholder Services, if any, will compensate
Service Organizations for personal service and/or the maintenance of Customer
accounts, including but not limited to (a) responding to Customer inquiries, (b)
providing information on Customer investments and (c) providing other
shareholder liaison services.
The annual fee paid to Service Organizations under Section 1
of the Plan with respect to Administrative Services, if any, will compensate
Service Organizations for administrative and accounting services to their
Customers, including, but not limited to: (a) aggregating and processing
purchase and redemption requests from Customers and placing net purchase and
redemption orders with the Fund's distributor or transfer agent; (b) providing
Customers with a service that invests the assets of their accounts in Advisor
Shares; (c) processing dividend payments from the Fund on behalf of Customers;
(d) providing information periodically to Customers showing their positions in
Advisor Shares; (e) arranging for bank wires; (f) providing sub-accounting with
respect to Advisor Shares beneficially owned by Customers or the information to
the Fund necessary for sub-accounting; (g) forwarding shareholder communications
from the Fund (for example, proxies, shareholder reports, annual and semi-annual
financial statements and dividend, distribution and tax notices) to Customers,
if required by law and (h) providing other similar services to the extent
permitted under applicable statutes, rules and regulations.
Payments under this Plan are not tied exclusively to the
expenses for shareholder servicing, administration and distribution expenses
actually incurred by any Service Organization, and the payments may exceed
expenses actually incurred by any Service Organization.
Section 3. Additional Payments.
Counsellors Securities, the Fund's investment adviser (the
"Investment Adviser") or an affiliate of either may pay Service Organizations a
fee (the "Service Fee") for services provided or expenses incurred by the
Service Organization that are not covered by an Agreement. A portion of the
Service Fee
-2-
<PAGE> 4
paid may be borne or reimbursed by the Fund. The Service Fee payable to any
particular Service Organization is determined based upon a number of factors,
including the nature and quality of services provided, the operations processing
requirements of the relationship and the standardized fee schedule of the
Service Organization. Payments by the Fund under this Plan shall not be made to
a Service Organization with respect to services for which the Service
Organization is otherwise compensated by Counsellors Securities, the Investment
Adviser or an affiliate of either.
Payments may be made to Service Organizations by Counsellors
Securities, the Investment Adviser or an affiliate of either from any such
entity's own resources, which may include a fee it receives from the Fund.
Section 4. Monitoring.
Counsellors Securities shall monitor the arrangements
pertaining to the Fund's Agreements with Service Organizations.
Section 5. Approval by Shareholders.
The Plan is effective, and fees are payable in accordance with
Section 1 of the Plan pursuant to the approval of the Plan by a vote of at least
a majority of the outstanding voting Advisor Shares.
Section 6. Approval by Directors.
The Plan is effective, and payments under any related
agreement may be made pursuant to the approval of the Plan and such agreement by
a majority vote of both (a) the full Board of Directors of the Fund and (b)
those Directors who are not interested persons of the Fund and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreements related to it (the "Qualified Directors"), cast in person at a
meeting called for the purpose of voting on the Plan and the related agreements.
Section 7. Continuance of the Plan.
The Plan will continue in effect for so long as its
continuance is specifically approved at least annually by the Fund's Board of
Directors in the manner described in Section 5 above.
Section 8. Termination.
The Plan may be terminated at any time by a majority vote of
the Qualified Directors or by a majority of the outstanding voting Advisor
Shares.
-3-
<PAGE> 5
Section 9. Amendments.
The Plan may not be amended to increase materially the amount
of the fees described in Section 1 above with respect to the Advisor Shares
without approval of at least a majority of the outstanding voting Advisor
Shares. In addition, all material amendments to the Plan must be approved by the
Fund's Board of Directors in the manner described in Section 6 above.
Section 10. Selection of Certain Directors.
While the Plan is in effect, the selection and nomination of
the Fund's Directors who are not interested persons of the Fund will be
committed to the discretion of the Directors then in office who are not
interested persons of the Fund.
Section 11. Written Reports.
In each year during which the Plan remains in effect,
Counsellors Securities will furnish to the Fund's Board of Directors, and the
Board will review, at least quarterly, written reports, which set out the
amounts expended under the Plan and the purposes for which those expenditures
were made.
Section 12. Preservation of Materials.
The Fund will preserve copies of the Plan, any agreement
relating to the Plan and any report made pursuant to Section 11 above, for a
period of not less than six years (the first two years in an easily accessible
place) from the date of the Plan, agreement or report.
Section 13. Meanings of Certain Terms.
As used in the Plan, the terms "interested person" and
"majority of the outstanding voting securities" will be deemed to have the same
meanings that those terms have under the 1940 Act and the rules and regulations
thereunder, subject to any exemption that may be granted to the Fund under the
1940 Act by the Securities and Exchange Commission.
-4-
<PAGE> 6
IN WITNESS WHEREOF, the Fund has executed the Plan as of
________ __, 1998.
WARBURG, PINCUS [ ]
FUND, INC.
By:_______________________
Name: ___________________
Title: __________________
Acknowledged this
_____ day of ________, 1998
COUNSELLORS SECURITIES INC.
By:_____________________________
Name: _______________________
Title: ______________________
-5-
<PAGE> 1
Exhibit 18
<PAGE> 2
WARBURG PINCUS FUNDS
RULE 18f-3 PLAN
(for Funds with three classes of shares)
Rule 18f-3 (the "Rule") under the Investment Company Act of 1940, as
amended (the "1940 Act"), requires that the Board of an investment company
desiring to offer multiple classes pursuant to the Rule adopt a plan setting
forth the separate arrangement and expense allocation of each class (a "Class"),
and any related conversion features or exchange privileges. The differences in
distribution arrangements and expenses among these classes of shares, and the
exchange features of each class, are set forth below in this Plan, which is
subject to change, to the extent permitted by law and by the governing documents
of each fund that adopts this Plan (the "Fund" and together the "Funds"), by
action of the governing Board of the Fund.
The governing Board, including a majority of the non-interested Board
members, of each Fund, or series thereof, which desires to offer multiple
classes has determined that the following Plan is in the best interests of each
class individually and the Fund as a whole:
1. Class Designation. Shares of a Fund or series of a Fund shall be
divided into Common Shares, Institutional Shares and Advisor Shares.
2. Differences in Services. Counsellors Securities Inc. ("CSI") will
provide shareholder servicing and/or distribution services to holders of Common
Shares, Institutional Shares and Advisor Shares. Institutional shareholders of
record may also provide distribution services, shareholder services and/or
administrative and accounting services to or on behalf of their clients or
customers who beneficially own Advisor Shares.
3. Differences in Distribution Arrangements.
Common Shares. Common Shares are sold to the general public and are
subject to an annual distribution fee in accordance with a Shareholder Servicing
and Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act, under
which Funds pay CSI .25% per annum for services under that Plan. Specified
minimum initial and subsequent purchase amounts are applicable to the Common
Shares. Common Shares are available through certain organizations that may or
may not charge their customers administrative charges or other direct fees in
connection with investing in Common Shares. CSI may pay certain financial
institutions, broker-dealers and recordkeeping organizations a fee based on the
value of accounts maintained by such organizations in Common Shares of a Fund.
<PAGE> 3
Institutional Shares. Institutional Shares are available for purchase
by investors who have entered into an investment management agreement with the
Fund's investment adviser (the "Adviser), investment sub-adviser or an affiliate
of either. Institutional Shares are not subject to any annual distribution fee.
Specified minimum initial and subsequent purchase amounts are applicable to the
Institutional Shares.
Advisor Shares. Advisor Shares are available for purchase by financial
institutions, retirement plans, broker-dealers, depository institutions and
other financial intermediaries (collectively, "Institutions"). Advisor Shares
may be charged a shareholder service fee (the "Shareholder Service Fee") payable
at an annual rate of up to .25%, and a distribution and/or administrative
services fee (the "Distribution Service Fee") payable at an annual rate of up to
.50%, of the average daily net assets of such Class under a Distribution Plan
adopted pursuant to Rule 12b-1 under the 1940 Act. Payments may be made directly
out of the assets of the Fund or by CSI on its behalf. Additional payments may
be made by CSI, BEA Associates ("BEA") or an affiliate of either from time to
time to Institutions for providing distribution, administrative, accounting
and/or other services with respect to Advisor Shares. Payments by the Fund shall
not be made to an Institution pursuant to the Plan with respect to services for
which Institutions are otherwise compensated by CSI or an affiliate thereof.
There is no minimum amount of initial or subsequent purchases of Advisor Shares
imposed on Institutions.
General. CSI, the Adviser or an affiliate of either may pay certain
Fund transfer agent fees and expenses related to accounts of customers of
organizations that have entered into agreements with CSI or the Fund. An
organization may use a portion of the fees paid pursuant to the Plan to
compensate the Fund's custodian or transfer agent for costs related to accounts
of customers of the organization that hold Common Shares, Institutional Shares
or Advisor Shares.
Payments may be made to organizations, the customers or clients of
which invest in a Fund's Common Shares, Institutional Shares or Advisor Shares,
by CSI, the Adviser or an affiliate of either from such entity's own resources,
which may include a fee it receives from the Fund.
4. Expense Allocation. The following expenses shall be allocated, to
the extent practicable, on a Class-by-Class basis: (a) fees under the
Shareholder Servicing and Distribution Plan or Distribution Plan, as applicable;
(b) transfer agent fees identified by the Fund's transfer agent as being
attributable to a specific Class; and (c) expenses incurred in connection with
shareholders' meetings as a result of issues relating to a specific Class.
-2-
<PAGE> 4
The distribution, administrative and shareholder servicing fees and
other expenses listed above which are attributable to a particular Class are
charged directly to the net assets of the particular Class and, thus, are borne
on a pro rata basis by the outstanding shares of that Class; provided, however,
that money market funds and other funds making daily distributions of their net
investment income may allocate these items to each share regardless of class or
on the basis of relative net assets (settled shares), applied in each case
consistently.
5. Conversion Features. No Class shall be subject to any automatic
conversion feature.
6. Exchange Privileges. Shares of a Class shall be exchangeable only
for (a) shares of the same Class of other investment companies that hold
themselves out to investors as part of the Warburg Pincus family of funds and
(b) shares of certain other investment companies specified from time to time.
7. Additional Information. This Plan is qualified by and subject to the
terms of the then current prospectus for the applicable Class; provided,
however, that none of the terms set forth in any such prospectus shall be
inconsistent with the terms of the Classes contained in this Plan. The
prospectus for each Class contains additional information about that Class and
the applicable Fund's multiple class structure.
Dated: July 20, 1998
-3-
