FORM OF
SUB-ADMINISTRATIVE SERVICES AGREEMENT
SUB-ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the ___
day of ________, 1997, by and among PBHG Insurance Series Fund, Inc., a
Maryland corporation (the "Fund"), PBHG Fund Services, a Pennsylvania business
trust (the "Administrator"), and SEI Fund Resources, a Delaware business trust
(the "Sub-Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end management
investment company of the series type and is registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Administrator and the Fund have entered into an
Administrative Services Agreement (the "Administrative Services Agreement")
pursuant to which the Administrator will provide administrative services to
the Fund and each of its several series (the "Portfolios"), which are
identified in Schedule A to the Administrative Services Agreement; and
WHEREAS, the Fund and the Administrator desire to retain the
Sub-Administrator to provide certain administrative services to the Fund, and
each of its series (the "Portfolios"), and the Administrator in the manner and
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE SUB-ADMINISTRATOR.
The Sub-Administrator shall assist the Administrator in connection with
the Administrator's duties and responsibilities to the Fund specified in the
Administrative Services Agreement. In addition, the Sub-Administrator shall
perform or supervise the performance by others of all administrative services
in connection with the operations of the Portfolios, other than those
administrative services to be provided by the Administrator pursuant to the
Administrative Services Agreement. The administrative services to be provided
by the Sub-Administrator pursuant to this Agreement shall include general
administrative services, regulatory reporting services, fund accounting
services, and such services as set forth herein. The duties of the
Sub-Administrator shall be confined to those expressly set forth herein and no
implied duties are assumed by or may be asserted against the Sub-Administrator
hereunder. Without limiting the generality of the foregoing, the
Sub-Administrator shall provide the services described below:
1.1. GENERAL ADMINISTRATIVE SERVICES.
1.1.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Fund or the Administrator, or provide and pay the cost of, such office
facilities, furnishings, and office equipment as are necessary for the
performance of the Sub-Administrator's duties to the Fund under this
Agreement.
1.1.2. PERSONNEL. Provide, without additional remuneration from or
other cost to the Fund or the Administrator, the services of individuals
competent to perform all of the Sub-Administrator's duties under this
Agreement.
1.1.3. BOOKS AND RECORDS. Maintain customary records, on behalf of
the Fund, in connection with the performance of the Sub-Administrator's duties
under this Agreement. In connection with this, the Sub-Administrator shall
monitor and oversee the performance of its agents and the Fund's independent
auditors with respect to all financial, accounting, corporate, and other
records required to be maintained and preserved by the Fund or on its behalf
so that such records will be maintained in accordance with the provisions of
rules and regulations of the Securities and Exchange Commission ("SEC") under
Section 31(a) of the 1940 Act.
1.1.4. REPORTS TO THE FUND. Assist the Administrator in furnishing
to or placing at the disposal of the Fund such information, reports,
evaluations, analysis, and opinions relating to its duties as the Fund may at
any time or from time to time reasonably request, or as the Administrator may
reasonably deem helpful to the Fund. The Sub-Administrator also shall assist
the Administrator in the preparation of all necessary agendas and related
meeting materials for meetings of the Board of Directors.
1.1.5. SHAREHOLDER INQUIRIES. Respond to all inquiries from Fund
shareholders or otherwise answer communications from Fund shareholders if such
inquiries or communications are directed to the Sub-Administrator. If any
such inquiry or communication would be more properly answered by one of its
agents or those agents of the Fund listed in Section 1 above, the
Sub-Administrator will refer the inquiry to the Administrator to direct to the
appropriate party for response.
1.1.6. AUTOMATED FUND SYSTEMS. Assist in implementing and
monitoring the Fund's use of automated systems for: (i) the purchase, sale,
redemption and transfer of Fund shares; (ii) the payment of Rule 12b-1 service
fees to broker-dealers and others that provide personal services, distribution
support services, and/or account maintenance services to shareholders; and
(iii) the recording and tracking of such transactions and/or payments. The
Sub-Administrator also shall assist in developing, implementing, and
monitoring the Fund's use of automated communications systems with brokers,
dealers, custodians, and other service providers, including without limitation
trade clearance systems.
1.2. FUND ACCOUNTING. The Sub-Administrator shall on a continuing basis
perform the fund accounting services and other functions described below.
1.2.1. FINANCIAL STATEMENTS. Maintain the Fund's general ledger,
including expense accruals and payments, and prepare the Fund's and each
Portfolio's annual and semi-annual financial statements. On a monthly basis,
with respect to each Portfolio, the Sub-Administrator shall prepare and
provide to the Administrator and the Fund monthly reports as mutually agreed
to by the parties (in U.S. dollars) which may include the following items:
schedule of investments; statement of assets and liabilities; statement of
operations; statement of changes in net assets; cash statement; and schedule
of capital gains and losses.
1.2.2. OVERSIGHT. Assist in developing, reviewing, maintaining,
and monitoring the effectiveness of Fund accounting policies and procedures,
in light of industry standards and the "Audits of Investment Companies" of the
American Institute of Certified Public Accountants and, in this regard, devote
particular attention to areas where accounting standards may change or
develop. In this capacity, the Sub-Administrator shall assist in the
resolution of recommendations made by the Fund's independent auditors to
improve internal controls and shall implement such recommendations as required
by the Board.
1.2.3. PORTFOLIO VALUATION AND ACCOUNTING. Conduct, or monitor and
oversee, portfolio valuation procedures, including without limitation
procedures for the calculation of expenses and the control of disbursements of
each Portfolio. The Sub-Administrator shall calculate, or monitor and oversee
the calculation of, the daily net asset value ("NAV") of each Portfolio in
accordance with the procedures described in the Fund's then-current
registration statement and such other procedures as may be established by the
Fund's Board of Directors. The Sub-Administrator, on a daily basis, shall
provide by electronic transmission or other mutually agreed upon means, such
NAV information to: (i) the investment adviser and sub-adviser for each
Portfolio; (ii) the NASD for reporting to newspapers and other news media; and
(iii) all sub-transfer agents that have entered into agreements with the Fund.
In connection with this responsibility, the Sub-Administrator shall determine
or oversee the determination of the value of each Portfolio's assets, and
shall review and monitor pricing methodologies relating to such valuation,
procedures, including: (i) oversight of any third-party pricing services used
by them; (ii) establishment and maintenance of appropriate "back up" pricing
service arrangements so that the NAV for each Portfolio will be provided to
each required party specified above; (iii) assistance in the review and
verification of daily securities price changes in excess of percentages
specified by the Sub-Administrator (and promptly reported to the
Administrator); (iv) review for "stale" prices; and (v) assistance in
determining the resolution of any NAV calculation errors. Notwithstanding the
foregoing, the Sub-Administrator shall bear no responsibility for incorrect
prices provided by a third party pricing service, provided the
Sub-Administrator fulfills its obligation as described above.
The Sub-Administrator shall also prepare annual Fund and/or Portfolio
expense budgets and the determination of related daily accruals. In addition,
the Sub-Administrator shall: determine the Fund's and each Portfolio's net
income both in terms of U.S. dollars and, if appropriate, foreign currencies;
calculate capital gains and losses and, if appropriate, foreign exchange gains
and losses; control all disbursements from the Fund and authorize such
disbursements upon written instructions, which may be continuing instructions,
from the Administrator or such other persons authorized by the Fund's Board of
Directors; calculate various contractual expenses for budget and accrual
purposes; reconcile cash and investment balances of each Portfolio with the
Fund's custodian and provide each Portfolio's investment adviser or, if
applicable, sub-adviser with the beginning cash balance available for
investment purposes in both U.S. dollars and, if appropriate, foreign
currency; and maintain historical tax lots for each security and foreign
currency. The Sub-Administrator shall also for each Portfolio: monitor timely
income collection and tax reclaims; monitor daily expense accruals and the
related calculation of investment advisory fee waivers and/or expense
reimbursements (if any) and notify the Administrator of any proposed
adjustments thereto; and assist in developing and reviewing daily accounting
reports for the Portfolios.
1.2.4. PERFORMANCE DATA. Calculate performance data of each
Portfolio for dissemination to information services covering the investment
company industry, including, as appropriate, each Portfolio's average annual
total return, cumulative total return, expense ratio, and portfolio turnover
rate. In connection with this function, the Sub-Administrator shall, as
reasonably requested by the Fund's Board of Directors, develop fund
performance and other databases to facilitate internal and external reporting
and shall monitor the calculation of financial information.
1.2.5. FUND OPERATIONS. Participate, as reasonably requested, in
the development of policies and procedures, including operational, accounting,
reporting, and monitoring procedures, to effectuate securities and other
transactions on behalf of the Fund and the Portfolios, including, stated
objectives as appropriate, securities lending programs, the establishment and
use of lines of credit on behalf of the Fund and/or inter-Portfolio lending
capabilities, and the establishment and use of inter-Portfolio securities
trading capabilities. In connection with the foregoing, the Sub-Administrator
shall, upon reasonable request, assist in the preparation of any application
for exemptive or no-action relief, if required.
1.2.6. CASH BALANCES. Participate, as reasonably requested, in the
development of policies and procedures, including operational, accounting,
reporting, and monitoring procedures, regarding the management of the
Portfolios' cash balances, including procedures regarding the use of "sweep"
transactions and repurchase agreements, the temporary reinvestment of credits
to cash balances, and the processing of dividends and other disbursements to
the Portfolios. In connection with the foregoing, the Sub-Administrator shall
assist in the preparation of any application for exemptive or no-action
relief, if required. The Sub-Administrator shall also provide the cash
availability throughout each day, as required by each Portfolio's investment
adviser or, if applicable, sub-adviser.
1.3. OVERSIGHT OF AGENTS AND SERVICE PROVIDERS.
1.3.1. IN GENERAL. Assist the Administrator and Fund counsel in
the preparation, negotiation, and administration of contracts on behalf of the
Fund with third-party service providers, such as the Fund's distributor,
custodian, transfer agent, sub-transfer agents, and intermediaries with
respect to mutual fund alliance programs. At the reasonable request of the
Fund or the Administrator, the Sub-Administrator shall assist in the
preparation of reports to the Fund on the performance and service quality of
these service providers, as more fully described in Section 1.3.2. below. The
Sub-Administrator shall review the performance of each Portfolio's custodian
or custodians regarding the timely recording of cash receipts and
disbursements and position reconciliation and shall periodically report to the
Administrator its findings in that regard, as mutually agreed to by the
parties. The Sub-Administrator shall also monitor and review compliance as
documented and reported by each Portfolio's custodian or custodians with Rule
17f-5 under the 1940 Act, as applicable. The Sub-Administrator shall have no
responsibility for supervising the performance of investment adviser or
sub-adviser for each Portfolio.
1.3.2. SERVICE QUALITY STANDARDS. Assist the Administrator in
establishing service quality standards and developing and implementing
procedures for monitoring and benchmarking the performance of third-party
service providers, such as those specified in Section 1.3.1. above, against
industry standards. Upon reasonable request, the Sub-Administrator shall
provide the Administrator and the Fund's Board of Directors with periodic
reports concerning the results of monitoring of the performance and service
quality of these service quality of these service providers.
1.4. OVERSIGHT OF TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.
1.4.1. POLICIES AND PROCEDURES. Assist the Administrator in the
development of policies and procedures concerning the transfer agent's
processing of shareholder transactions, including policies and procedures
concerning inactive or dormant accounts and compliance with related
escheatment requirements, telephone exchanges and redemptions, effectuation of
transactions through the use of facsimile transmissions, name and address
changes, and the receipt and maintenance of appropriate legal documentation.
The Sub-Administrator also shall participate in the establishment of policies
and procedures for ensuring that shareholder redemption requests are timely
honored, even in periods of significant or unusual market activity. The
Sub-Administrator also shall assist in the development of controls over, and
policies and procedures governing, the Fund's cash remittance processing, and
the processing of dividend and distribution payments, check writing, wire
redemptions and other disbursements.
1.4.2. COMPLIANCE WITH SERVICE QUALITY STANDARDS. Assist the
Administrator in establishing service quality standards and developing and
implementing procedures for monitoring and benchmarking the transfer agent's
performance against industry standards in areas such as: compliance with
initial and subsequent investment minimums; accuracy of the establishment of
new accounts, including the establishment of shareholder privileges and
dividend reinvestment options; accuracy of transaction processing, including
monetary and non-monetary transactions; timeliness of problem resolution and
correspondence, including review of shareholder complaints; compliance with
document completion and retention requirements; timeliness and accuracy of
confirmations and periodic shareholder statements; and quality of telephonic
communications with shareholders, including a review of abandon rates,
response times, and average talk time. The Sub-Administrator also shall
review and participate in determinations concerning the resolution of "as of"
transactions in accordance with the Fund's policies as approved by the
Administrator and the Board of Directors of the Fund.
1.4.3. OVERSIGHT OF SHAREHOLDER TRANSACTIONS. Assist the Fund, as
requested, in developing and implementing procedures with respect to omnibus
accounts, in order to ensure that such accounts are properly serviced and that
Fund expenses are allocated appropriately.
1.4.4. TRANSFER AGENT EXPENSES. Assist the Administrator, as
requested, in reviewing the level and allocation of transfer agent
out-of-pocket expenses charged to the Fund with respect to whether particular
expenses are appropriately charged to the Fund and appropriately allocated
among the Portfolios.
1.5. REPORTS, FILINGS, AND COMMUNICATIONS.
1.5.1. REPORTS AND FILINGS. Assist in the development,
preparation, and filing of all reports and communications by the Fund to Fund
shareholders and all reports and filings necessary to maintain the
registrations and qualifications of the Fund's shares under federal and state
"Blue Sky" securities laws, including registration statements, prospectuses,
statements of additional information, proxy statements, semi-annual reports
for the Fund on Form N-SAR, all sales reports, and all required notices
pursuant to Rule 24f-2 of the 1940 Act. The Sub-Administrator also shall
assist with and coordinate the layout and printing of publicly disseminated
prospectuses and the Fund's semi-annual and annual reports to shareholders.
1.5.2. STATE BLUE SKY FILINGS. Prepare all reports, applications,
and documents (including reports regarding the sale and redemption of the
Fund's shares as may be required in order to comply with state Blue Sky
securities laws) as may be necessary or desirable to: (i) register and
maintain the registration of the Fund's shares with state securities
authorities; and (ii) monitor the sale of the Fund's shares for compliance
with state Blue Sky securities laws. The Sub-Administrator shall file with
the appropriate state securities authorities all registration statements and
reports for the Fund and the Fund's shares, and all amendments thereto and
other filings as may be necessary or convenient to register the Fund and the
Fund's shares and keep such registration effective with state security
authorities so as to enable the Fund to make a continuous offering of its
shares in all 50 states and the District of Columbia.
1.5.3. SHAREHOLDER COMMUNICATIONS. Coordinate mailing Fund
prospectuses, notices, proxy statements, proxies and other reports to Fund
shareholders, and supervise and facilitate the solicitation of proxies
solicited by the Fund for all shareholder meetings, including tabulation
process for shareholder meetings.
1.5.4. TAX RETURNS. Coordinate and supervise the preparation and
filing of all required tax returns for the Fund and monitor the accuracy of
all tax reports sent to shareholders of the Fund.
1.6. LEGAL AND AUDIT SERVICES.
1.6.1. INDEPENDENT AUDITS. Assist in the coordination of the Fund
audit process and provide, upon request, account analysis, fiscal year
summaries, and other audit-related schedules. In connection with this
responsibility, the Sub-Administrator shall take all actions to assure that
necessary information is made available to the Fund's independent auditor for
the expression of their opinion, as such may be required by the Fund from time
to time. The Sub-Administrator also shall assist and participate in the
resolution of issues raised in the audit process.
1.6.2. 1940 ACT. The Sub-Administrator shall obtain and keep in
effect, at the Fund's expense, fidelity bonds and directors and
officers/errors and omissions insurance policies for the Fund in accordance
with the requirements of Rules 17g-1 and 17d-1(d)(7) under the 1940 Act, as
such bonds and policies are approved by the Fund's Board of Directors. The
Sub-Administrator also shall develop and maintain fund manager "handbooks" to
facilitate compliance by portfolio managers with respect to investment
restrictions. In addition, the Sub-Administrator shall assist the Fund's
Administrator in monitoring the Fund's compliance with provisions of the 1940
Act and the rules and regulations thereunder as well as compliance with each
Portfolio's investment objectives, program, policies and restrictions. In
connection with this responsibility, the Sub-Administrator shall promptly
advise the Fund and the Administrator as to any compliance problems or issues
detected.
1.6.3. TAX COMPLIANCE. Monitor compliance with the provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and
regulations thereunder, applicable to regulated investment companies,
including: portfolio diversification requirements and minimum distribution
requirements; review of expense allocations to individual classes to ensure
compliance with applicable IRS pronouncements regarding preferential
dividends; wash sales; short-short income; qualifying income; asset
diversification; and investments in Passive Foreign Investment Companies. In
connection with this responsibility, the Sub-Administrator shall monitor and
advise the Fund and the Portfolios as to their status as "regulated investment
companies" under the Code.
1.6.4. REGULATORY EXAMINATIONS. Assist in the Fund's participation
in regulatory examinations, including examinations by the SEC, the National
Association of Securities Dealers, Inc., and/or state securities regulators.
In connection therewith, the Sub-Administrator, on behalf of the Fund, shall
provide such information as the regulator may reasonably request, and shall
assist and participate in the resolution of any issues raised in connection
with such examinations.
1.7. DISASTER RECOVERY. Employ, monitor and oversee disaster recovery
and related back-up procedures and facilities commonly utilized by others in
the mutual fund industry. In this regard, the Sub-Administrator shall enter
into and maintain in effect with appropriate parties, at no additional expense
to the Fund, one or more agreements making appropriate and reasonable
provision for emergency use of electronic data processing equipment and other
equipment and/or facilities necessary for the performance of its duties and
obligations under this Agreement in the event of emergency conditions or
equipment failures.
2. EXPENSES.
2.1. EXPENSES PAID BY THE SUB-ADMINISTRATOR.
2.1.1. IN GENERAL. The Sub-Administrator shall bear all of its
expenses in connection with the performance of its duties under this
Agreement, except documented out-of-pocket expenses or expenses associated
with telephone support relating to shareholder services.
2.1.2. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF FUND EXPENSES BY
THE SUB-ADMINISTRATOR. The waiver or assumption and reimbursement by the
Sub-Administrator of any expense of the Fund that the Sub-Administrator is not
required by this Agreement to waive, or assume or reimburse, shall not
obligate the Sub-Administrator to waive, assume, or reimburse the same or any
similar expense of the Fund on any subsequent occasion, unless so required
pursuant to a separate agreement between the Fund and the Sub-Administrator.
2.2. EXPENSES PAID BY THE FUND. The Fund shall bear all expenses of its
organization, operation, and business not specifically waived, assumed, or
agreed to be paid by the Administrator or the Sub-Administrator, as provided
in this Agreement, the Administrative Services Agreement or any other
agreement between the Fund and the Administrator or the Sub-Administrator, and
as described in the Fund's then-current Prospectuses and Statements of
Additional Information.
3. FEES.
3.1. COMPENSATION RATE. As compensation for all services rendered,
facilities provided, and expenses paid and any expense waived or assumed and
reimbursed by the Sub-Administrator, the Administrator shall pay the
Sub-Administrator a fee per Portfolio: (i) at the annual rate of .07% of the
average daily assets of each Portfolio with respect to $2.5 billion of the
total average daily net assets of the Fund; and (ii) at the annual rate of
.025% of the average daily net assets of each Portfolios with respect to the
total average daily net assets of the Fund in excess of $2.5 billion.
3.2. METHOD OF COMPUTATION. The Sub-Administrator's fee shall accrue on
each calendar day and the sum of the daily fee accruals shall be paid monthly
to the Sub-Administrator by the fifth (5th) business day of the next calendar
month. The daily fee accruals shall be computed by multiplying the fraction
of one (1) over the number of calendar days in the year by the applicable
annual rates described in Section 3.1. above, and multiplying this product by
the net assets of the Portfolios, as determined in accordance with the current
Prospectuses of the Fund, as of the close of business on the last preceding
business day on which the Fund was open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective or terminates
before the end of any month, the fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proportion
which such period bears to the full month in which such effectiveness or
termination occurs.
3.4. RESPONSIBILITY FOR PAYMENT. The Sub-Administrator shall not be
entitled to receive any payment for the performance of its services hereunder
from the Fund and shall look solely and exclusively to the Administrator for
payment of all fees for such services.
4. SUB-ADMINISTRATOR'S USE OF THE SERVICES OF OTHERS.
The Sub-Administrator may at its own cost employ, retain, or otherwise
avail itself of the services and facilities of other persons or organizations
for the purpose of providing the Sub-Administrator, the Administrator, or the
Fund with such information or assistance as the Sub-Administrator may deem
necessary, appropriate, or convenient for the discharge of its duties
hereunder or otherwise helpful to the Administrator.
5. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Fund, pursuant
to rules or regulations of the SEC under Section 31(a) of the 1940 Act and
maintained and preserved by the Sub-Administrator on behalf of the Fund, are
the property of the Fund and shall be surrendered by the Sub-Administrator
promptly on request by the Fund. The Sub-Administrator shall not disclose or
use any record or information obtained pursuant to this Agreement in any
manner whatsoever except as expressly authorized by this Agreement and
applicable law. The Sub-Administrator shall keep confidential any information
obtained in connection with its duties and shall disclose such information
only if the Fund has authorized such disclosure or if such disclosure is
expressly required by applicable law or federal or state regulatory
authorities.
6. REPORTS TO THE SUB-ADMINISTRATOR.
The Fund and/or the Administrator shall furnish or otherwise make
available to the Sub-Administrator such Prospectuses, Statements of Additional
Information, financial statements, proxy statements, reports, and other
information relating to the business and affairs of the Fund as the
Sub-Administrator may, at any time or from time to time, require in order to
discharge its duties under this Agreement.
7. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Sub-Administrator
or any affiliated person of the Sub-Administrator to render similar corporate
administrative services to other investment companies, or to engage in other
business activities.
8. LIMITATION OF LIABILITY OF THE SUB-ADMINISTRATOR AND INDEMNIFICATION BY
THE FUND AND THE ADMINISTRATOR.
8.1. LIMITATION OF LIABILITY OF THE SUB-ADMINISTRATOR.
8.1.1. Neither the Sub-Administrator nor any of its directors,
officers, employees, or agents performing services for the Fund and the
Administrator at the direction or request of the Sub-Administrator in
connection with the Sub-Administrator's discharge of its duties undertaken or
assumed with respect to this Agreement, shall be liable for any act or
omission in the course of or in connection with the Sub-Administrator's
services hereunder, including any error of judgment or mistake of law or for
any loss suffered by the Fund or the Administrator in connection with the
matters to which this Agreement relates; provided, that nothing herein
contained shall be construed to protect the Sub-Administrator or any such
persons against any liability to the Fund or its shareholders or the
Administrator to which the Sub-Administrator or such persons would otherwise
be subject by reason of willful misfeasance, bad faith, or negligence in the
performance of its or their duties on behalf of the Fund or the Administrator
or for failure by the Sub-Administrator or any such persons to exercise due
care in rendering other services to the Fund or the Administrator. The
limitation and liability provisions set forth herein shall indefinitely
survive the termination of this Agreement.
8.1.2. The Sub-Administrator may apply to the Board of Directors of
the Fund or to the Administrator at any time for instructions and may consult
counsel for the Fund or the Administrator or the Sub-Administrator's own
counsel and with accountants and other experts with respect to any matter
arising in connection with the Sub-Administrator's duties, and the
Sub-Administrator shall not be liable or accountable for any action taken or
omitted by it in good faith in accordance with such instructions or with the
opinion of such counsel, accountants, or other experts.
8.1.3. The Sub-Administrator shall at all times have the right to
mitigate or cure any and all losses, damages, costs, charges, fees,
disbursements, payments, expenses and liabilities to the Fund, its
shareholders or the Administrator.
8.2. INDEMNIFICATION BY THE FUND AND THE ADMINISTRATOR.
8.2.1. As long as the Sub-Administrator acts in good faith and with
due diligence and without negligence, the Fund and the Administrator shall
indemnify the Sub-Administrator, its directors, officers, employees, and
agents and hold them harmless from and against any and all actions, suits, and
claims, whether groundless or otherwise, and from and against any and all
losses, damages (excluding consequential, punitive or other indirect damages),
costs, charges, reasonable counsel fees and disbursements, payments, expenses,
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the administrative services or any other service rendered
to the Fund or the Administrator hereunder. The indemnity and defense
provisions set forth herein shall indefinitely survive the termination of this
Agreement.
8.2.2. The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Fund or the
Administrator may be asked for indemnification under Section 8.2.1., the Board
of Directors of the Fund or the Administrator shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that the Sub-Administrator will use all reasonable care to
identify and notify the Board of Directors of the Fund or the Administrator
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Fund or the
Administrator, but failure to do so in good faith shall not affect the rights
hereunder. The rights hereunder shall be limited, during each term of this
Agreement, to no more than six (6) months of fees of the Sub-Administrator (as
computed in accordance with Section 3.1 of this Agreement) either (i) payable
to the Sub-Administrator in accordance with Section 3 hereof or (ii) if the
Agreement has been terminated, those fees paid to the Sub-Administrator for
the six (6) month period prior to termination.
9. INDEMNIFICATION BY THE SUB-ADMINISTRATOR.
9.1. The Sub-Administrator shall indemnify the Fund, the Administrator,
and their directors, officers, employees, and agents and hold them harmless
from and against any and all actions, suits, and claims, whether groundless or
otherwise, and from and against any and all losses, damages (excluding
consequential, punitive or other indirect damages), costs, charges, reasonable
counsel fees and disbursements, payments, expenses, and liabilities (including
reasonable investigation expenses) arising directly or indirectly out of the
administrative services or any other service rendered to the Fund and the
Administrator hereunder and arising or based upon the willful misfeasance or
bad faith of the Sub-Administrator, its directors, officers, employees, and
agents in the performance of its or their duties on behalf of the Fund and the
Administrator. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
9.2. The rights hereunder shall include the right to reasonable advances
of defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In
order that the indemnification provision contained herein shall apply,
however, it is understood that if in any case the Sub-Administrator may be
asked for indemnification under Section 9.1, the Sub-Administrator shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Fund and the Administrator
will use all reasonable care to identify and notify the Sub-Administrator
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the
Sub-Administrator, but failure to do so in good faith shall not affect the
rights hereunder. The rights hereunder shall be limited, during each term of
this Agreement, to no more than six (6) months of fees to the
Sub-Administrator (as computed in accordance with Section 3.1 of this
Agreement) either (i) payable to the Sub-Administrator in accordance with
Section 3 hereof or (ii) if the Agreement has been terminated, those fees paid
to the Sub-Administrator for the six (6) month period prior to termination.
10. FORCE MAJEURE.
In the event the Sub-Administrator is unable to perform its obligations
or duties under the terms of this Agreement because of any act of God, strike,
riot, act of war, equipment failure, power failure or damage or other causes
reasonably beyond its control, the Sub-Administrator shall not be liable for
any loss, damage, cost, charge, counsel fee, payment, expense or liability to
any other party (whether or not a party to this Agreement) resulting from such
failure to perform its obligations or duties under this Agreement or otherwise
from such causes. This provision, however, shall in no way excuse the
Sub-Administrator from being liable to the Administrator or the Fund for any
and all losses, damages, costs, charges, counsel fees, payments and expenses
incurred by the Administrator or the Fund due to the non-performance or delay
in performance by the Sub-Administrator of its duties and obligation under
this Agreement if such non-performance or delay in performance could have been
reasonably been prevented by the Sub-Administrator through back-up systems and
other procedures commonly employed by other administrators and
sub-administrators in the mutual fund industry, provided that the
Sub-Administrator shall have the right, at all times, to mitigate or cure any
losses, including the making of adjustments or corrections to any current or
former shareholder accounts.
11. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first written
above, and unless sooner terminated as hereinafter provided, shall continue in
effect for an initial period that will expire on December 31, 1998.
Thereafter, this Agreement shall continue in effect from year to year, subject
to the termination provisions and all other terms and conditions hereof. The
Sub-Administrator shall furnish to the Fund or the Administrator, promptly
upon a request by the Fund or the Administrator, such information as may be
reasonably necessary to evaluate the terms of this Agreement or any extension,
renewal, or amendment thereof.
12. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto; provided, that no material amendment shall be effective unless
authorized by a resolution of the Board of Directors of the Fund or by a vote
of a majority of the outstanding voting securities of the Fund or, in the case
of an amendment to this Agreement with respect to a particular Portfolio, by a
resolution of the Board of Directors of the Fund or by a vote of a majority of
the outstanding voting securities of such Portfolio.
The assignment (as that term is defined in Section 2(a)(4) of the 1940
Act and rules thereunder) of this Agreement or any rights or obligations
thereunder shall be prohibited by either party without the written consent of
the other party. This Agreement shall inure to the benefit of and be binding
upon the parties and their respected permitted successors and assigns.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by any of the parties hereto, without
the payment of any penalty:
(a) for a material breach of this Agreement, upon thirty (30) days
prior written notice to the breaching party; provided that the breaching party
has not cured the material breach of this Agreement during such thirty (30)
day period.
(b) following the initial term of this Agreement, for any reason
upon ninety (90) days' prior written notice to the other parties; provided,
that in the case of termination by the Fund such action shall have been
authorized by resolution of the Board of Directors of the Fund or by a vote of
a majority of the outstanding voting securities of the Fund or, in the case of
termination with respect to a particular Portfolio, by a resolution of the
Board of Directors of the Fund or by a vote of a majority of the outstanding
voting securities of such Portfolio. In the case of termination by the
Sub-Administrator, such termination shall not be effective until the Fund and
the Administrator shall have contracted with one or more persons to serve as
successor Sub-Administrator(s) for the Fund and such person(s) shall have
assumed such position.
14. MISCELLANEOUS.
14.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid: (a) if to the
Sub-Administrator, to SEI Fund Resources, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention: General Counsel; (b) if to the Administrator, to
Pilgrim ▇▇▇▇▇▇ Fund Services, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇; and (c) if to the Fund, to The PBHG
Funds, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
14.2. CAPTIONS. The captions contained in this Agreement are included
for convenience of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
14.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Fund to take any action contrary to its Articles of Incorporation
or By-Laws, or any applicable statutory or regulatory requirement to which it
is subject or by which it is bound, or to relieve or deprive the Board of
Directors of its responsibility for and control of the conduct of the affairs
of the Fund.
14.4. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such
term or provision of the 1940 Act and to interpretations thereof, if any, by
the United States courts or, in the absence of any controlling decision of any
such court, by rules, regulations, or orders of the SEC validly issued
pursuant to the 1940 Act. In addition, where the effect of a requirement of
the 1940 Act reflected in any provision of this Agreement is relaxed by a
rule, regulation, or order of the SEC, whether of special or of general
application, such provision shall be deemed to incorporate the effect of such
rule, regulation, or order.
14.5. SEVERABILITY. 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.
14.6. GOVERNING LAW. Except insofar as the 1940 Act or other federal
laws and regulations may be controlling, this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PBHG INSURANCE SERIES FUND, INC.
______________________________ By:___________________________________
Title:________________________ Title:_________________________________
ATTEST: PBHG FUND SERVICES
______________________________ By:___________________________________
Title:________________________ Title:_________________________________
ATTEST: SEI FUND RESOURCES
______________________________ By:___________________________________
Title:________________________ Title:_________________________________
SCHEDULE A
The Portfolios of the Fund that will receive services pursuant to this
Agreement are:
PBHG Growth II Portfolio
PBHG Select 20 Portfolio
PBHG Large Cap Growth Portfolio
PBHG Technology & Communications Portfolio
PBHG Large Cap Value Portfolio
PBHG Small Cap Value Portfolio
Date: ________, 1997