CUSTODIAN SERVICES AGREEMENT
THIS
AGREEMENT is made as of July 31, 2007 by and between PFPC TRUST COMPANY, a limited purpose
trust company incorporated under the laws of Delaware ("PFPC Trust") and SPARX
ASIA FUNDS, a Massachusetts business trust (the "Fund").
W I T N E S S E T H:
WHEREAS,
the Fund is registered as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS,
the Fund wishes to retain PFPC Trust to provide custodian services, and PFPC Trust wishes
to furnish custodian services, either directly or through an affiliate or affiliates, as
more fully described herein.
NOW,
THEREFORE, in consideration of the premises and mutual covenants herein contained, and
intending to be legally bound hereby, the parties hereto agree as follows:
|
(a) |
"1933 Act" means the Securities Act of 1933, as amended. |
|
(b) |
"1934 Act" means the Securities Exchange Act of 1934, as
amended. |
|
(c) |
"Authorized Person" means any officer of the Fund and any other
person authorized by the Fund to give Oral or Written Instructions on behalf of
the Fund. An Authorized Person's scope of authority may be limited by
setting forth such limitation in a written document signed by both parties
hereto. |
|
(d) |
"Book-Entry System" means the Federal Reserve Treasury
book-entry system for United States and federal agency securities, its successor
or successors, and its nominee or nominees and any book-entry system registered
with the SEC under the 1934 Act. |
|
(e) |
"Oral Instructions" mean oral instructions received by PFPC
Trust from an Authorized Person or from a person reasonably believed by PFPC
Trust to be an Authorized Person. PFPC Trust may, in its sole discretion in each
separate instance, consider and rely upon instructions it receives from an
Authorized Person via electronic mail as Oral Instructions. |
|
(f) |
"PFPC Trust" means PFPC Trust Company or a subsidiary or affiliate of
PFPC Trust Company. |
|
(g) |
"SEC" means the Securities and Exchange Commission. |
|
(h) |
"Securities Laws" mean the 1933 Act, the 1934 Act and the 1940 Act. |
|
(i) |
"Shares" mean the shares of beneficial interest of any series or class of
the Fund. |
|
(i) |
any and all securities and other investment items which the Fund may from time
to time deposit, or cause to be deposited, with PFPC Trust or which PFPC Trust
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
PFPC Trust from time to time, from or on behalf of the Fund. |
|
(k) |
"Written Instructions" mean (i) written instructions signed by
two Authorized Persons (or persons reasonably believed by PFPC Trust to be
Authorized Persons) and received by PFPC Trust; (ii) email instructions received
and opened by PFPC Trust; or (iii) trade instructions transmitted by means of an
electronic transaction reporting system which requires the use of a password or
other authorized identifier in order to gain access. The instructions may be
delivered electronically (with respect to sub-item (ii) above) or by hand, mail
or facsimile sending device. |
2. |
Appointment. The Fund hereby appoints PFPC Trust to provide
custodian services to the Fund as set forth herein, on behalf of each of its
investment portfolios (each, a "Portfolio"), and PFPC Trust accepts
such appointment and agrees to furnish such services. PFPC Trust shall be under
no duty to take any action hereunder on behalf of the Fund or any Portfolio
except as specifically set forth herein or as may be specifically agreed to by
PFPC Trust and the Fund in a written amendment hereto. |
|
PFPC
Trust undertakes to comply with applicable requirements, governmental authority or laws,
rules and regulations of governmental authorities having any jurisdiction with respect to
the services to be performed by PFPC Trust hereunder. PFPC Trust assumes no responsibility
for such compliance by the Fund or other entity. |
|
(a) |
Unless otherwise provided in this Agreement, PFPC Trust shall act only upon Oral
Instructions or Written Instructions. |
|
(b) |
PFPC Trust shall be entitled to rely upon any Oral Instruction or Written
Instruction it receives pursuant to this Agreement. PFPC Trust may assume that
any Oral Instructions or Written Instructions received hereunder are not in any
way inconsistent with the provisions of organizational documents of the Fund or
of any vote, resolution or proceeding of the Fund's Board of Directors or
of the Fund's shareholders, unless and until PFPC Trust receives Written
Instructions to the contrary. |
|
(c) |
The Fund agrees to forward to PFPC Trust Written Instructions confirming Oral
Instructions (except where such Oral Instructions are given by PFPC Trust or its
affiliates) so that PFPC Trust 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 Trust or differ
from the Oral Instructions shall in no way invalidate the transactions or
enforceability of the transactions authorized by the Oral Instructions or PFPC
Trust's ability to rely upon such Oral Instructions. |
|
(a) |
Advice of the Fund. If PFPC Trust is in doubt as to any action it should
or should not take, PFPC Trust may request directions or advice, including Oral
Instructions or Written Instructions, from the Fund. |
|
(b) |
Advice of Counsel. If PFPC Trust shall be in doubt as to any question of
law pertaining to any action it should or should not take, PFPC Trust may
request advice from counsel of its own choosing (who may be counsel for the
Fund, the Fund's investment adviser or PFPC Trust, at the option of PFPC
Trust). The parties agree to use good faith efforts to properly allocate
the expense of any such counsel fees between the parties. |
|
(c) |
Conflicting Advice. In the event of a conflict between directions or
advice or Oral Instructions or Written Instructions PFPC Trust receives from the
Fund, and the advice it receives from counsel, PFPC Trust shall be entitled to
rely upon and follow the advice of counsel. |
|
(d) |
No Obligation to Seek Advice. Nothing in this section shall be construed
so as to impose an obligation upon PFPC Trust (i) to seek directions or advice
or Oral Instructions or Written Instructions or (ii) to act in accordance with
such directions or advice or Oral Instructions or Written Instructions. |
6. |
Records; Visits. The books and records pertaining to the Fund
and any Portfolio, which are in the possession or under the control of PFPC
Trust, shall be the property of the Fund. The Fund and Authorized Persons shall
have access to such books and records at all times during PFPC Trust's
normal business hours. Upon the reasonable request of the Fund, copies of any
such books and records shall be provided by PFPC Trust to the Fund or to an
authorized representative of the Fund, at the Fund's expense. |
7. |
Confidentiality. Each party shall keep confidential any
information relating to the other party's business ("Confidential
Information"). Confidential Information shall include (a) any data or
information that is competitively sensitive material, and not generally known to
the public, including, but not limited to, information about product plans,
marketing strategies, finances, operations, customer relationships, customer
profiles, customer lists, sales estimates, business plans, and internal
performance results relating to the past, present or future business activities
of the Fund or PFPC Trust, their respective subsidiaries and affiliated
companies; (b) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially valuable and secret in
the sense that its confidentiality affords the Fund or PFPC Trust a competitive
advantage over its competitors; (c) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how, and trade secrets,
whether or not patentable or copyrightable; and (d) anything designated as
confidential. Notwithstanding the foregoing, information shall not be
Confidential Information and shall not be subject to such confidentiality
obligations if: (a) it is already known to the receiving party at the time it is
obtained; (b) it is or becomes publicly known or available through no wrongful
act of the receiving party; (c) it is rightfully received from a third party
who, to the best of the receiving party's knowledge, is not under a duty of
confidentiality; (d) it is released by the protected party to a third party
without restriction; (e) it is requested or required to be disclosed by the
receiving party pursuant to a court order, subpoena, governmental or regulatory
agency request or law (provided the receiving party will use commercially reasonable efforts to
provide the other party written notice of such requirement, to the extent such
notice is permitted); (f) release of such information by PFPC Trust is necessary
or desirable in connection with the provision of services under this Agreement;
(g) it is Fund information provided by PFPC Trust in connection with an
independent third party compliance or other review; (h) it is relevant to the
defense of any claim or cause of action asserted against the receiving party; or
(i) it has been or is independently developed or obtained by the receiving
party. The provisions of this Section 7 shall survive termination of this
Agreement for a period of three (3) years after such termination. |
8. |
Cooperation with Accountants. PFPC Trust shall cooperate with
the Fund's independent public accountants and shall take all reasonable
action to make any requested information available to such accountants as
reasonably requested by the Fund. |
9. |
PFPC System. PFPC Trust shall retain title to and ownership of any
and all data bases, computer programs, screen formats, report formats,
interactive design techniques, derivative works, inventions, discoveries,
patentable or copyrightable matters, concepts, expertise, patents, copyrights,
trade secrets, and other related legal rights utilized by PFPC Trust in
connection with the services provided by PFPC Trust to the Fund. |
10. |
Disaster Recovery. PFPC Trust shall enter into and shall maintain
in effect with appropriate parties one or more agreements making reasonable
provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures,
PFPC Trust shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. PFPC Trust shall have no liability with respect
to the loss of data or service interruptions caused by equipment failure
provided such loss or interruption is not caused by PFPC Trust's own
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties or obligations under this Agreement. |
|
(a) |
As compensation for custody services rendered by PFPC Trust pursuant to this
Agreement, the Fund, on behalf of each of the Portfolios, will pay to PFPC Trust
a fee or fees as may be agreed to in writing from time to time by the Fund and
PFPC Trust. The Fund acknowledges that PFPC Trust may receive float benefits in
connection with maintaining certain accounts required to provide services under
this Agreement. |
|
(b) |
The undersigned hereby represents and warrants to PFPC Trust that (i) the terms
of this Agreement, (ii) the fees and expenses associated with this Agreement,
and (iii) any benefits accruing to PFPC Trust or to the adviser or sponsor to
the Fund in connection with this Agreement, including but not limited to any fee
waivers, conversion cost reimbursements, up front payments, signing payments or
periodic payments made or to be made by PFPC Trust to such adviser or sponsor or
any affiliate of the Fund relating to this Agreement have been fully disclosed
to the Board of Directors of the Fund and that, if required by applicable law,
such Board of Directors has approved or will approve the terms of this
Agreement, any such fees and expenses, and any such benefits. |
|
(a) |
Subject to the terms of this Section 12, PFPC Trust shall be liable to the Fund
(or any person or entity claiming through the Fund) for damages only to the
extent caused by PFPC Trust's own willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties under this Agreement
("Standard of Care"). |
|
(b) |
Notwithstanding anything in this Agreement to the contrary (other than as
specifically provided in Section 14(h)(ii)(B)(4) and Section 14(h)(iii)(A) of
this Agreement), the Fund shall be responsible for all filings, tax returns and
reports on any transactions undertaken pursuant to this Agreement, or in respect
of the Property or any collections undertaken pursuant to this Agreement, which
may be requested by any relevant authority. In addition, the Fund shall be
responsible for the payment of all taxes and similar items (including without
limitation penalties and interest related thereto). |
|
(c) |
PFPC Trust's liability to the Fund and any person or entity claiming
through the Fund for any loss, claim, suit, controversy, breach or damage of any
nature whatsoever (including but not limited to those arising out of or related
to this Agreement) and regardless of the form of action or legal theory
("Loss") shall not exceed the fees received by PFPC Trust for services
provided hereunder during the twelve (12) months immediately prior to the date
of such Loss. |
|
(d) |
PFPC Trust shall not be liable for damages (including without limitation damages
caused by delays, failure, errors, interruption or loss of data) occurring
directly or indirectly by reason of circumstances beyond its reasonable control,
including without limitation acts of God; action or inaction of civil or
military authority; national emergencies; public enemy; war; terrorism; riot;
fire; flood; catastrophe; sabotage; epidemics; labor disputes; civil commotion;
interruption, loss or malfunction of utilities, transportation, computer or
communications capabilities; insurrection; elements of nature; non-performance
by a third party; failure of the mails; or functions or malfunctions of the
internet, firewalls, encryption systems or security devices caused by any of the
above. |
|
(e) |
PFPC Trust shall not be under any duty or obligation to inquire into and shall
not be liable for the validity or invalidity, authority or lack thereof, or
truthfulness or accuracy or lack thereof, of any instruction, direction, notice,
instrument or other information which PFPC Trust reasonably believes to be
genuine. PFPC Trust shall not be liable for any damages that are caused by
actions or omissions taken by PFPC Trust in accordance with Oral Instructions or
Written Instructions or advice of counsel. PFPC Trust shall not be liable for
any damages arising out of any action or omission to act by any prior service
provider of the Fund or for any failure to discover any such error or omission. |
|
(f) |
Neither PFPC Trust nor its affiliates shall be liable for any consequential,
incidental, exemplary, punitive, special or indirect damages, whether or not the
likelihood of such damages was known by PFPC Trust or its affiliates. |
|
(g) |
No party may assert a cause of action against PFPC Trust or any of its
affiliates that allegedly occurred more than 12 months immediately prior to the
filing of the suit (or, if applicable, commencement of arbitration proceedings)
alleging such cause of action. |
|
(h) |
Each party shall have a duty to mitigate damages for which the other party may
become responsible. |
|
(i) |
This Section 12 shall survive termination of this Agreement. |
13. |
Indemnification. Absent PFPC Trust's failure to meet its
Standard of Care (defined in Section 12 above), the Fund agrees to indemnify,
defend and hold harmless PFPC Trust and its affiliates and their respective
directors, trustees, officers, agents and employees from all claims, suits,
actions, damages, losses, liabilities, obligations, costs and reasonable
expenses (including attorneys' fees and court costs, travel costs and other
reasonable out-of-pocket costs related to dispute resolution) arising directly
or indirectly from any of the following: (a) any action or omission to act by
any prior service provider of the Fund; and (b) any action taken or omitted to
be taken by PFPC Trust in connection with the provision of services to the Fund.
This Section 13 shall survive termination of this Agreement. |
|
(a) |
Delivery of the Property. The Fund will deliver or arrange for the
delivery to PFPC Trust of all the Property owned by the Portfolios, including
cash received as a result of the distribution of Shares, during the term of this
Agreement. PFPC Trust will not be responsible for any assets until actual
receipt. |
|
(b) |
Receipt and Disbursement of Money. PFPC Trust, acting upon Written
Instructions, shall open and maintain a separate account for each separate
Portfolio of the Fund (each an "Account"). PFPC Trust shall maintain
in the Account of a particular Portfolio all cash and other assets received from
or for the Fund specifically designated to such Account.
PFPC Trust shall make cash payments from or for the Account of a Portfolio only for: |
|
(i) |
purchases of securities in the name of a Portfolio, PFPC Trust, PFPC
Trust's nominee or a sub-custodian or nominee thereof as provided in
sub-section (j) and for which PFPC Trust has received a copy of the
broker's or dealer's confirmation or payee's invoice, as
appropriate; |
|
(ii) |
redemption of Shares of the Fund upon receipt of Written Instructions; |
|
(iii) |
payment of, subject to Written Instructions, interest, taxes (provided that tax
which PFPC Trust considers is required to be deducted or withheld "at
source" will be governed by Section 14(h)(iii)(B) of this Agreement),
administration, accounting, distribution, advisory or management fees and
similar expenses which are to be borne by a Portfolio; |
|
(iv) |
payment to, subject to receipt of Written Instructions, the Fund's transfer
agent, as agent for the shareholders, of an amount equal to the amount of
dividends and distributions stated in the Written Instructions to be distributed
in cash by the transfer agent to shareholders, or, in lieu of paying the
Fund's transfer agent, PFPC Trust may arrange for the direct payment of
cash dividends and distributions to shareholders in accordance with procedures
mutually agreed upon from time to time by and among the Fund, PFPC Trust and the
Fund's transfer agent; |
|
(v) |
payments, upon receipt of Written Instructions, in connection with the
conversion, exchange or surrender of securities owned or subscribed to by the
Fund and held pursuant to this Agreement or delivered to PFPC Trust; |
|
(vi) |
payments of the amounts of dividends received with respect to securities sold
short; |
|
(vii) |
payments to PFPC Trust for its services hereunder; |
|
(viii) |
payments to a sub-custodian pursuant to provisions in sub-section (c) of this
Section; and |
|
(ix) |
other payments, upon Written Instructions. |
|
PFPC
Trust is hereby authorized to endorse and collect all checks, drafts or other orders for
the payment of money received as custodian for the Fund. |
|
(i) |
PFPC Trust shall hold all securities received by it for the Accounts in a
separate account that physically segregates such securities from those of any
other persons, firms or corporations, except for securities held in a Book-Entry
System or through a sub-custodian or depository. All such securities shall be
held or disposed of only upon Written Instructions or otherwise pursuant to the
terms of this Agreement. PFPC Trust shall have no power or authority to assign,
hypothecate, pledge or otherwise dispose of any such securities or other
investments, except upon the express terms of this Agreement or upon Written
Instructions authorizing the transaction. In no case may any member of the
Fund's Board of Trustees or any officer, employee or agent of the Fund
withdraw any securities upon their mere receipt.
At
PFPC Trust's own expense and for its own convenience, PFPC Trust may enter into
sub-custodian agreements with other banks or trust companies to perform duties described
in this sub-section (c) with respect to domestic assets. Such bank or trust company shall
have aggregate capital, surplus and undivided profits, according to its last published
report, of at least one million dollars ($1,000,000), if it is a subsidiary or affiliate
of PFPC Trust, or at least twenty million dollars ($20,000,000) if such bank or trust
company is not a subsidiary or affiliate of PFPC Trust. In addition, such bank or trust
company must be qualified to act as custodian and agree to comply with the relevant
provisions of applicable rules and regulations. Any such arrangement will not be entered
into without prior written notice to the Fund (or as otherwise provided in the 1940 Act).
In
addition, PFPC Trust may enter into arrangements with sub-custodians with respect to
services regarding foreign assets. Any such arrangement will not be entered into without
prior written notice to the Fund (or as otherwise provided in the 1940 Act).
Sub-custodians
utilized by PFPC Trust may be subsidiaries or affiliates of PFPC Trust, and such entities
will be compensated for their services at such rates as are agreed between the entity and
PFPC Trust. PFPC Trust shall remain responsible for the acts and omissions of any
sub-custodian chosen by PFPC Trust under the terms of this sub-section (c) to the same
extent that PFPC Trust is responsible for its own acts and omissions under this Agreement. |
|
(i) |
deliver any securities held for a Portfolio against the receipt of payment for
the sale of such securities or otherwise in accordance with standard market
practice; |
|
(ii) |
execute and deliver to such persons as may be designated in such Oral
Instructions or Written Instructions, proxies, consents, authorizations, and any
other instruments received by PFPC Trust as custodian whereby the authority of a
Portfolio as owner of any securities may be exercised; |
|
(iii) |
deliver any securities to the issuer thereof, or its agent, when such securities
are called, redeemed, retired or otherwise become payable at the option of the
holder; provided that, in any such case, the cash or other consideration is to
be delivered to PFPC Trust; |
|
(iv) |
deliver any securities held for a Portfolio against receipt of other securities
or cash issued or paid in connection with the liquidation, reorganization,
refinancing, tender offer, merger, consolidation or recapitalization of any
corporation or other entity, or the exercise of any conversion privilege; |
|
(v) |
deliver any securities held for a Portfolio to any protective committee,
reorganization committee or other person in connection with the reorganization,
refinancing, merger, consolidation, recapitalization or sale of assets of any
corporation or other entity, and receive and hold under the terms of this
Agreement such certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; |
|
(vi) |
make such transfer or exchanges of the assets of the Portfolios and take such
other steps as shall be stated in said Oral Instructions or Written Instructions
to be for the purpose of effectuating a duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Fund; |
|
(vii) |
release securities belonging to a Portfolio to any bank or trust company for the
purpose of a pledge or hypothecation to secure any loan incurred by the Fund on
behalf of that Portfolio; provided, however, that securities shall be released
only upon payment to PFPC Trust of the monies borrowed, except that in cases
where additional collateral is required to secure a borrowing already made
subject to proper prior authorization, further securities may be released for
that purpose; and repay such loan upon redelivery to it of the securities
pledged or hypothecated therefor and upon surrender of the note or notes
evidencing the loan; |
|
(viii) |
release and deliver securities owned by a Portfolio in connection with any
repurchase agreement entered into by the Fund on behalf of that Portfolio, but
only on receipt of payment therefor; and pay out monies of a Portfolio in
connection with such repurchase agreements, but only upon the delivery of the
securities; |
|
(ix) |
release and deliver or exchange securities owned by the Fund in connection with
any conversion of such securities, pursuant to their terms, into other
securities; |
|
(x) |
release and deliver securities to a broker in connection with the broker's
custody of margin collateral relating to futures and options transactions; |
|
(xi) |
release and deliver securities owned by the Fund for the purpose of redeeming in
kind Shares of the Fund upon delivery thereof to PFPC Trust; and |
|
(xii) |
release and deliver or exchange securities owned by the Fund for other purposes. |
|
(e) |
Use of Book-Entry System or Other Depository. PFPC Trust will deposit in
Book-Entry Systems and other depositories all securities belonging to the
Portfolios eligible for deposit therein and will utilize Book-Entry Systems and
other depositories to the extent possible in connection with settlements of
purchases and sales of securities by the Portfolios, and deliveries and returns
of securities loaned, subject to repurchase agreements or used as collateral in
connection with borrowings. PFPC Trust shall continue to perform such duties
until it receives Written Instructions or Oral Instructions authorizing contrary
actions. Notwithstanding anything in this Agreement to the contrary, PFPC
Trust's use of a Book-Entry System shall comply with the requirements of
Rule 17f-4 under the 1940 Act. |
PFPC
Trust shall administer a Book-Entry System or other depository as follows:
|
(i) |
With respect to securities of each Portfolio which are maintained in a
Book-Entry System or another depository, the records of PFPC Trust shall
identify by book-entry or otherwise those securities as belonging to each
Portfolio. |
|
(ii) |
Assets of each Portfolio deposited in a Book-Entry System or another depository
will (to the extent consistent with applicable law and standard practice) at all
times be segregated from any assets and cash controlled by PFPC Trust in other
than a fiduciary or custodian capacity but may be commingled with other assets
held in such capacities. |
|
PFPC
Trust will provide the Fund with such reports on its own system of internal control as the
Fund may reasonably request from time to time. |
|
(f) |
Registration of Securities. All securities held for a Portfolio which are
issued or issuable only in bearer form, except such securities maintained in the
Book-Entry System or in another depository, shall be held by PFPC Trust in
bearer form; all other securities maintained for a Portfolio may be registered
in the name of the Fund on behalf of that Portfolio, PFPC Trust, a Book-Entry
System, another depository, a sub-custodian, or any duly appointed nominee of
the Fund, PFPC Trust, a Book-Entry System, a depository or a sub-custodian. The
Fund agrees to furnish to PFPC Trust appropriate instruments to enable PFPC
Trust to maintain or deliver in proper form for transfer, or to register in the
name of its nominee or in the name of a Book-Entry System or in the name of
another appropriate entity, any securities which it may maintain pursuant to
this Agreement. With respect to uncertificated securities which are registered
in the name of the Fund or a Portfolio (or a nominee thereof), PFPC Trust will
reflect such securities on its records based upon the holdings information
provided to it by the issuer of such securities, but notwithstanding anything in
this Agreement to the contrary PFPC Trust shall not be obligated to safekeep
such securities or to perform other duties with respect to such securities other
than to make payment for the purchase of such securities upon receipt of Oral or
Written Instructions, accept in sale proceeds received by PFPC Trust upon the
sale of such securities of which PFPC Trust is informed pursuant to Oral or
Written Instructions, and accept in other distributions received by PFPC Trust
with respect to such securities or reflect on its records any reinvested
distributions with respect to such securities of which it is informed by the
issuer of the securities. |
|
(g) |
Voting. Neither PFPC Trust nor its nominee shall vote any of the
securities held pursuant to this Agreement by or for the account of a Portfolio,
except in accordance with Written Instructions. PFPC Trust, directly or through
the use of another entity, shall execute in blank and promptly deliver all
notices, proxies and proxy soliciting materials received by PFPC Trust as
custodian of the Property to the registered holder of such securities. If the
registered holder is not the Fund on behalf of a Portfolio, then Written
Instructions or Oral Instructions must designate the person who owns such
securities. |
|
(h) |
Transactions Not Requiring Instructions. Notwithstanding anything in this
Agreement requiring instructions in order to take a particular action, in the
absence of a contrary Written Instruction PFPC Trust is authorized to take the
following actions without the need for instructions: |
|
(A) |
collect and receive for the account of each Portfolio, all income, dividends,
distributions, coupons, option premiums, other payments and similar items,
included or to be included in the Property, and, in addition, promptly advise
each Portfolio of such receipt and credit such income to each Portfolio's
custodian account; |
|
(B) |
endorse and deposit for collection, in the name of the Fund, checks, drafts, or
other orders for the payment of money; |
|
(C) |
receive and hold for the account of each Portfolio all securities received as a
distribution on the Portfolio's securities as a result of a stock dividend,
share split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any securities belonging to a Portfolio and held by PFPC Trust
hereunder; |
|
(D) |
present for payment and collect the amount payable upon all securities which may
mature or be called, redeemed, retired or otherwise become payable (on a
mandatory basis) on the date such securities become payable; and |
|
(E) |
take any action which may be necessary and proper in connection with the
collection and receipt of such income and other payments and the endorsement for
collection of checks, drafts, and other negotiable instruments. |
|
(A) |
PFPC Trust is authorized to deliver or cause to be delivered Property against
payment or other consideration or written receipt therefor in the following
cases: |
|
(1) |
for examination by a broker or dealer selling for the account of a Portfolio in
accordance with street delivery custom; |
|
(2) |
for the exchange of interim receipts or temporary securities for definitive
securities; and |
|
(3) |
for transfer of securities into the name of the Fund on behalf of a Portfolio
or PFPC Trust or a sub-custodian or a nominee of one of the foregoing, or for
exchange of securities for a different number of bonds, certificates, or other
evidence, representing the same aggregate face amount or number of units bearing
the same interest rate, maturity date and call provisions, if any; provided
that, in any such case, the new securities are to be delivered to PFPC Trust. |
|
(1) |
pay all income items held by it which call for payment upon presentation and
hold the cash received by it upon such payment for the account of each
Portfolio; |
|
(2) |
collect interest and cash dividends received, with notice to the Fund, to the
account of each Portfolio; |
|
(3) |
hold for the account of each Portfolio all stock dividends, rights and similar
securities issued with respect to any securities held by PFPC Trust hereunder;
and |
|
(4) |
subject to receipt of such documentation and information as PFPC Trust may
request, execute as agent on behalf of the Fund all necessary ownership
certificates required by a national governmental taxing authority or under the
laws of any U.S. state now or hereafter in effect, inserting the Fund's
name, on behalf of a Portfolio, on such certificate as the owner of the
securities covered thereby, to the extent it may lawfully do so. |
|
(A) |
Subject to receipt of such documentation and information as PFPC Trust may
request, PFPC Trust will, in such jurisdictions as PFPC Trust may agree from
time to time, seek to reclaim or obtain a reduction with respect to any
withholdings or other taxes relating to assets maintained hereunder (provided
that PFPC Trust will not be liable for failure to obtain any particular relief
in a particular jurisdiction); and |
|
(B) |
PFPC Trust is authorized to deduct or withhold any sum in respect of tax which
PFPC Trust considers is required to be deducted or withheld "at
source" by any relevant law or practice. |
|
(i) |
PFPC Trust shall upon receipt of Written Instructions or Oral Instructions
establish and maintain segregated accounts on its records for and on behalf of
each Portfolio. Such accounts may be used to transfer cash and securities,
including securities in a Book-Entry System or other depository: |
|
(A) |
for the purposes of compliance by the Fund with the procedures required by a
securities or option exchange, providing such procedures comply with the 1940
Act and any releases of the SEC relating to the maintenance of segregated
accounts by registered investment companies; and |
|
(B) |
upon receipt of Written Instructions, for other purposes. |
|
(ii) |
PFPC Trust shall arrange for the establishment of XXX custodian accounts for
such shareholders holding Shares through XXX accounts, in accordance with the
Fund's prospectuses, the Internal Revenue Code of 1986, as amended
(including regulations promulgated thereunder), and with such other procedures
as are mutually agreed upon from time to time by and among the Fund, PFPC Trust
and the Fund's transfer agent. |
|
(j) |
Purchases of Securities. PFPC Trust shall settle purchased securities
upon receipt of Oral Instructions or Written Instructions that specify: |
|
(i) |
the name of the issuer and the title of the securities, including CUSIP number
if applicable; |
|
(ii) |
the number of shares or the principal amount purchased and accrued interest, if
any; |
|
(iii) |
the date of purchase and settlement; |
|
(iv) |
the purchase price per unit; |
|
(v) |
the total amount payable upon such purchase; |
|
(vi) |
the Portfolio involved; and |
|
(vii) |
the name of the person from whom or the broker through whom the purchase was
made. PFPC Trust shall upon receipt of securities purchased by or for a
Portfolio (or otherwise in accordance with standard market practice) pay out of
the monies held for the account of the Portfolio the total amount payable to the
person from whom or the broker through whom the purchase was made, provided that
the same conforms to the total amount payable as set forth in such Oral
Instructions or Written Instructions. |
|
(k) |
Sales of Securities. PFPC Trust shall settle sold securities upon receipt
of Oral Instructions or Written Instructions that specify: |
|
(i) |
the name of the issuer and the title of the security, including CUSIP number if
applicable; |
|
(ii) |
the number of shares or principal amount sold, and accrued interest, if any; |
|
(iii) |
the date of trade and settlement; |
|
(iv) |
the sale price per unit; |
|
(v) |
the total amount payable to the Fund upon such sale; |
|
(vi) |
the name of the broker through whom or the person to whom the sale was made; |
|
(vii) |
the location to which the security must be delivered and delivery deadline, if
any; and |
|
(viii) |
the Portfolio involved. |
|
PFPC
Trust shall deliver the securities upon receipt of the total amount payable to the
Portfolio upon such sale, provided that the total amount payable is the same as was set
forth in the Oral Instructions or Written Instructions. Notwithstanding anything to the
contrary in this Agreement, PFPC Trust may accept payment in such form as is consistent
with standard industry practice and may deliver assets and arrange for payment in
accordance with standard market practice. |
|
(i) |
PFPC Trust shall furnish to the Fund the following reports: |
|
(A) |
such periodic and special reports as the Fund may reasonably request; |
|
(B) |
a monthly statement summarizing all transactions and entries for the account of
each Portfolio, listing each portfolio security belonging to each Portfolio
(with the corresponding security identification number) held at the end of such
month and stating the cash balance of each Portfolio at the end of such month. |
|
(C) |
the reports required to be furnished to the Fund pursuant to Rule 17f-4 of the
1940 Act; and |
|
(D) |
such other information as may be agreed upon from time to time between the Fund
and PFPC Trust. |
|
(ii) |
PFPC Trust shall transmit promptly to the Fund any proxy statement, proxy
material, notice of a call or conversion or other voluntary corporate action or similar
communication received by it as custodian of the Property. PFPC Trust shall be
under no other obligation to inform the Fund as to such actions or events. For
clarification, upon the effective date of termination of this Agreement PFPC
Trust shall have no responsibility to transmit such material or to inform the
Fund or any other person of such actions or events. |
|
(m) |
Crediting of Accounts. PFPC Trust may in its sole discretion credit an
Account with respect to income, dividends, distributions, coupons, option
premiums, other payments or similar items prior to PFPC Trust's actual
receipt thereof, and in addition PFPC Trust may in its sole discretion credit or
debit the assets in an Account on a contractual settlement date with respect to
any sale, exchange or purchase applicable to the Account; provided that nothing
herein or otherwise shall require PFPC Trust to make any advances or to credit
any amounts until PFPC Trust's actual receipt thereof. If PFPC Trust
credits an Account with respect to (a) income, dividends, distributions,
coupons, option premiums, other payments or similar items on a contractual
payment date or otherwise in advance of PFPC Trust's actual receipt of the
amount due, (b) the proceeds of any sale or other disposition of assets on the
contractual settlement date or otherwise in advance of PFPC Trust's actual
receipt of the amount due or (c) provisional crediting of any amounts due, and
(i) PFPC Trust is subsequently unable to collect full and final payment for the
amounts so credited within a reasonable time period using reasonable efforts or
(ii) pursuant to standard industry practice, law or regulation PFPC Trust is
required to repay to a third party such amounts so credited, or if any Property
has been incorrectly credited, PFPC Trust shall have the absolute right in its
sole discretion without demand to reverse any such credit or payment, to debit
or deduct the amount of such credit or payment from the Account, and to
otherwise pursue recovery of any such amounts so credited from the Fund. The
Fund hereby grants to PFPC Trust and to each sub-custodian utilized by PFPC
Trust in connection with providing services to the Fund a first priority
contractual possessory security interest in and a right of setoff against the
assets maintained in an Account in the amount necessary to secure the return and
payment to PFPC Trust and to each such sub-custodian of any advance or credit
made by PFPC Trust and/or by such sub-custodian (including charges related
thereto) to such Account. Notwithstanding anything in this Agreement to the
contrary, PFPC Trust shall be entitled to assign any rights it has under this
sub-section (m) to any sub-custodian utilized by PFPC Trust in connection with
providing services to the Fund which sub-custodian makes any credits or advances
with respect to the Fund. |
|
(n) |
Collections. All collections of monies or other property in respect, or
which are to become part, of the Property (but not the safekeeping thereof upon
receipt by PFPC Trust) shall be at the sole risk of the Fund. If payment is not
received by PFPC Trust within a reasonable time after proper demands have been
made, PFPC Trust shall notify the Fund in writing, including copies of all
demand letters, any written responses and memoranda of all oral responses and
shall await instructions from the Fund. PFPC Trust shall not be obliged to take
legal action for collection unless and until reasonably indemnified to its
satisfaction. PFPC Trust shall also notify the Fund as soon as reasonably
practicable whenever income due on securities is not collected in due course and
shall provide the Fund with periodic status reports of such income collected
after a reasonable time. |
|
(o) |
Excess Cash Sweep. PFPC Trust will, consistent with applicable law, sweep
any net excess cash balances daily into an investment vehicle or other
instrument designated in Written Instructions, so long as the investment vehicle
or instrument is acceptable to PFPC Trust, subject to a fee, paid to PFPC Trust
for such service, to be agreed between the parties. Such investment vehicle or
instrument may be offered by an affiliate of PFPC Trust or by a PFPC Trust
client and PFPC Trust may receive compensation therefrom. |
|
(p) |
Foreign Exchange. PFPC Trust, its sub-custodians and the respective
affiliates of such entities (together, "Affiliated Entities") jointly
or separately may act as principal and/or agent for foreign exchange
("FX") transactions for the Fund, and any of the Affiliated Entities
may arrange FX transactions for the Fund with third parties that act as
principal or agent.
Affiliated Entities and third parties may receive fees and
other compensation in connection with FX transactions for the Fund, and PFPC
Trust may receive from such entities a portion of their fees or other
compensation.
Unless
PFPC Trust itself is the principal for a FX transaction, PFPC Trust will not be
responsible and shall have no liability for the actions or omissions of any principal
(including any other Affiliated Entity) to any FX transaction for the Fund nor any
responsibility to monitor the commercial terms of any such FX transactions. |
|
(a) |
This Agreement shall be effective on the date first written above and unless
terminated pursuant to its terms shall continue for a period of three (3) years
(the "Initial Term"). |
|
(b) |
Upon the expiration of the Initial Term, this Agreement shall automatically
renew for successive terms of one (1) year ("Renewal Term") each,
unless the Fund or PFPC Trust provides written notice to the other of its intent
not to renew. Such notice must be received not less than ninety (90) days prior
to the expiration of the Initial Term or the then current Renewal Term. |
|
(c) |
In the event this Agreement is terminated (pending appointment of a successor to
PFPC Trust or vote of the shareholders of the Fund to dissolve or to function
without a custodian of its cash, securities or other property), all expenses
associated with movement or duplication of records and materials and conversion thereof to a
successor custodian will be borne by the Fund and paid to PFPC Trust prior to
any such conversion. In addition, PFPC Trust shall not deliver cash, securities
or other property of the Portfolios to the Fund. It may deliver them to a bank
or trust company of PFPC Trust's choice, having aggregate capital, surplus
and undivided profits, as shown by its last published report, of not less than
twenty million dollars ($20,000,000), as a custodian for the Fund to be held
under terms similar to those of this Agreement. PFPC Trust shall not be required
to make any delivery or payment of assets upon termination until full payment
shall have been made to PFPC Trust of all of its fees, compensation, costs and
expenses (including without limitation fees and expenses associated with
deconversion or conversion to another service provider and other trailing
expenses incurred by PFPC Trust). PFPC Trust shall have a first priority
contractual possessory security interest in and shall have a right of setoff
against the Property as security for the payment of its fees, compensation,
costs and expenses. |
|
(d) |
If a party hereto is guilty of a material failure to perform its duties and
obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the
Defaulting Party, and if such material breach shall not have been remedied
within thirty (30) days after such written notice is given, then the
Non-Defaulting Party may terminate this Agreement by giving thirty (30) days
written notice of such termination to the Defaulting Party. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party. |
|
(e) |
Notwithstanding anything contained in this Agreement to the contrary, if in
connection with a Change in Control the Fund gives notice to PFPC Trust
terminating it as the provider of any of the services hereunder or if the Fund
otherwise terminates this Agreement before the expiration of the then-current
Initial or Renewal Term ("Early Termination"): |
|
(1) |
PFPC Trust shall, if requested by the Fund, make a good faith effort to
facilitate a conversion to the Fund's successor service provider; provided
that PFPC Trust does not guarantee that it will be able to effect a conversion
on the date(s) requested by the Fund. |
|
(2) |
Before the effective date of the Early Termination, the Fund shall pay to PFPC
Trust an amount equal to all fees and other amounts ("Early Termination
Fee") calculated as if PFPC Trust were to provide all services hereunder
until the expiration of the then-current Initial or Renewal Term. The Early
Termination Fee shall be calculated using the average of the monthly fees and
other amounts due to PFPC Trust under this Agreement during the last three
calendar months before the date of the notice of Early Termination (or if not
given the date it should have been given). |
|
(3) |
The Fund expressly acknowledges and agrees that the Early Termination Fee is not
a penalty but reasonable compensation to PFPC Trust for the termination of
services before the expiration of the then-current Initial or Renewal Term. |
|
(4) |
For purposes of Section 15(e), "Change in Control" means a merger,
consolidation, adoption, acquisition, change in control, re-structuring, or
re-organization of or any other similar occurrence involving the Fund or any
affiliate of the Fund. |
|
(5) |
If the Fund gives notice of Early Termination after expiration of the specified
notice period to terminate this Agreement in the ordinary course at the end of
the then-current Initial or Renewal Term, the references above to
"expiration of the then-current Initial or Renewal Term" shall be
deemed to mean "expiration of the Renewal Term immediately following the
then-current Initial or Renewal Term." |
|
(6) |
If any of the Fund's assets serviced by PFPC Trust under this Agreement are
removed from the coverage of this Agreement ("Removed Assets") and are
subsequently serviced by another service provider (including the Fund or an
affiliate of the Fund): (i) the Fund will be deemed to have caused an Early
Termination with respect to such Removed Assets as of the day immediately
preceding the first such removal of assets; and, (ii) at, PFPC Trust's
option, either (a) the Fund will also be deemed to have caused an Early
Termination with respect to all non-Removed Assets as of a date selected by PFPC
Trust, or (b) this Agreement will remain in full force and effect with respect
to all non-Removed Assets. |
16. |
Notices. Notices shall be addressed (a) if to PFPC Trust at 0000
Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxx Xxxxxxxx (or
such other address as PFPC Trust may inform the Fund in writing); (b) if to the
Fund, at SPARX Asia Funds c/o SPARX Investment & Research, USA, Inc. 000
Xxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Secretary (or such other
address as the Fund may inform PFPC Trust in writing) or (c) if to neither of
the foregoing, at such other address as shall have been given by like notice to
the sender of any such notice or other communication by the receiving party. If
notice is sent by confirming electronic delivery, hand 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 five 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. |
17. |
Amendments. This Agreement, or any term hereof, may be changed or
waived only by a written amendment, signed by the party against whom enforcement
of such change or waiver is sought. |
18. |
Assignment. PFPC Trust may assign this Agreement to any affiliate
of PFPC Trust or of The PNC Financial Services Group, Inc., provided that PFPC
Trust gives the Fund thirty (30) days' prior written notice of such
assignment. |
19. |
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. |
|
(a) |
Entire Agreement. 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 duties. |
|
(b) |
Non-Solicitation. During the term of this Agreement and for one year
thereafter, the Fund shall not (with the exceptions noted in the immediately
succeeding sentence) knowingly solicit or recruit for employment or hire any of
PFPC Trust's employees, and the Fund shall cause the Fund's sponsor
and the Fund's affiliates to not (with the exceptions noted in the
immediately succeeding sentence) knowingly solicit or recruit for employment or
hire any of PFPC Trust's employees. To "knowingly" solicit,
recruit or hire within the meaning of this provision does not include, and
therefore does not prohibit, solicitation, recruitment or hiring of a PFPC Trust
employee by the Fund, the Fund's sponsor or an affiliate of the Fund if the
PFPC Trust employee was identified by such entity solely as a result of the PFPC
Trust employee's response to a general advertisement by such entity in a
publication of trade or industry interest or other similar general solicitation
by such entity. |
|
(c) |
No Representations or Warranties. Except as expressly provided in this
Agreement, PFPC Trust hereby disclaims all representations and warranties,
express or implied, made to the Fund or any other person, including, without
limitation, any warranties regarding quality, suitability, merchantability,
fitness for a particular purpose or otherwise (irrespective of any course of
dealing, custom or usage of trade), of any services or any goods provided
incidental to services provided under this Agreement. PFPC Trust disclaims any
warranty of title or non-infringement except as otherwise set forth in this
Agreement. |
|
(d) |
No Changes that Materially Affect Obligations. Notwithstanding anything
in this Agreement to the contrary, the Fund agrees not to make any modifications
to its registration statement or adopt any policies which would affect
materially the obligations or responsibilities of PFPC Trust hereunder without
the prior written approval of PFPC Trust, which approval shall not be
unreasonably withheld or delayed. |
|
(e) |
Captions. 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. |
|
(f) |
Information. The Fund will provide such information and documentation as
PFPC Trust may reasonably request in connection with services provided by PFPC
Trust to the Fund. |
|
(g) |
Governing Law. This Agreement shall be deemed to be a contract made in
Delaware and governed by Delaware law, without regard to principles of conflicts
of law. |
|
(h) |
Partial Invalidity. 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. |
|
(i) |
Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. |
|
(j) |
Facsimile Signatures. The facsimile signature of any party to this
Agreement shall constitute the valid and binding execution hereof by such party. |
|
(k) |
Customer Identification Program Notice. To help the U.S. government fight
the funding of terrorism and money laundering activities, U.S. Federal law
requires each financial institution to obtain, verify, and record certain
information that identifies each person who initially opens an account with that
financial institution on or after October 1, 2003. Consistent with this
requirement, PFPC Trust may request (or may have already requested) the
Fund's name, address and taxpayer identification number or other
government-issued identification number, and, if such party is a natural person,
that party's date of birth. PFPC Trust may also ask (and may have already
asked) for additional identifying information, and PFPC Trust may take steps
(and may have already taken steps) to verify the authenticity and accuracy of
these data elements. |
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
day and year first above written.
|
PFPC TRUST COMPANY
By: _____________________
Name: _____________________
Title: _____________________
SPARX ASIA FUNDS
By: _____________________
Name: _____________________
Title: _____________________ |