ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of the ___ day of January 1993, by and
between DIMENSIONAL EMERGING MARKETS FUND INC. (the "Fund"), and PROVIDENT
FINANCIAL PROCESSING CORPORATION ("PFPC"), a Delaware corporation which is an
indirect wholly-owned subsidiary of PNC Financial Corp.
W I T N E S S E T H
WHEREAS, the Fund is registered as a management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund wishes to retain PFPC to provide certain
administrative and accounting services, and PFPC is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints PFPC to provide certain
administrative and accounting services to the Fund for the period and on the
terms set forth in this Agreement. PFPC accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 12 of this Agreement. The Fund presently issues one series or
class of shares ("Shares") which is described in the registration statement
delivered to PFPC herewith, and may from time to time issue additional series of
shares. Hereinafter each such series shall be referred to as a "Series". The
records, notices, reports and services provided by PFPC hereunder shall be
prepared, kept, maintained and furnished by PFPC in respect of each Series of
the Fund existing on the date hereof, and any Series organized by the Fund after
the date hereof as agreed in writing by the Fund and PFPC.
2. Delivery of Documents. The Trustee has furnished PFPC with
copies properly certified or authenticated of each of the following:
(a) Resolutions of the Fund's Board of Directors authorizing the
appointment of PFPC to provide certain administration and accounting services
for the Fund and approving this Agreement;
(b) Appendix A identifying and containing the signatures of the
Fund's officers and other persons authorized to issue Oral Instructions and to
sign Written
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Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Articles of Incorporation filed with the Maryland
Department of Assessments and Taxation on January 9, 1991 and all amendments
thereto (such Articles of Incorporation as presently in effect and as they shall
from time to time be amended, are herein called the "Charter");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws,
as presently in effect and as they shall from time to time be amended, are
herein called "ByLaws");
(e) The current investment advisory agreements between
Dimensional Fund Advisors Inc. (the "Advisor") and the Fund;
(f) The current Agreement between the Fund and DFA Securities
Inc.;
(g) The Custodian Agreement between Chase Manhattan Bank, N.A.
and the Fund dated as of January _ , 1993;
(h) The Transfer Agency Agreement between Provident Financial
Processing Corporation and the Fund dated as of , 1993; and
(i) The Fund's most recent registration statement on Form N-2
under the 1940 Act (File No. 811- ), as filed with the U.S. Securities and
Exchange Commission ("the SEC") on January 19, 1993 and all amendments thereto
(such registration statement as presently effective and as it shall from time to
time be amended, is herein called the "Registration Statement").
The Fund will furnish PFPC from time to time with copies, properly
certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any officer of the Fund and any other person,
whether or not any such person is an officer or employee of the Fund, duly
authorized by the Board of Directors of the Fund to give Oral and Written
Instructions on behalf of the Fund and listed on Appendix A listing persons
duly authorized to give
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Oral or Written Instructions on behalf of the Fund as may be received by PFPC
from time to time.
(b) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person. The Fund agrees to deliver to PFPC, at the time and in the
manner specified in Paragraph 4(b) of this Agreement, Written Instructions
confirming oral Instructions.
(c) "Written Instructions". As used in this Agreement, the term
"Written Instructions" means written , instructions delivered by hand, mail,
tested telegram, cable, telex or facsimile sending device, and received by PFPC,
signed by an Authorized Person. Written Instructions include electronic
transmissions properly originated and confirmed by the Fund.
(d) "Affiliate". As used herein, "Affiliate" means any company
that controls, is controlled by, or is under common control with PFPC.
4. Instructions Consistent with Charter, etc.
(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral or Written , Instructions. Although PFPC may know of the
provisions of the Charter and By-Laws of the Fund, PFPC may assume that any oral
or Written Instructions received hereunder are not in any way inconsistent with
any provisions of such Charter or By-Laws, or any vote, resolution or proceeding
of the Shareholders, or of the Board of Directors, or of any committee thereof.
(b) PFPC shall be entitled to rely upon any Oral Instructions
and any Written Instructions actually received by PFPC from the Fund and any
Affiliate, provided such Affiliate has not acted negligently (unless such an
Affiliate has received and transmitted erroneous instructions received from an
Authorized Person who is not an Affiliate) pursuant to this Agreement. The Fund
agrees to forward to PFPC Written Instructions confirming oral Instructions in
such manner that the Written Instructions are received by PFPC, whether by hand
delivery, telex, facsimile sending device or otherwise, by the close of business
of the same day that such Oral Instructions are given to PFPC. The Fund agrees
that the fact that such confirming Written Instructions are not received by PFPC
shall in no way affect the validity of the transactions or
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enforceability of the transactions authorized by the Fund by giving Oral
Instructions. The Fund agrees that PFPC shall incur no liability to the Fund in
acting upon Oral Instructions given to PFPC by the Fund hereunder concerning
such transactions, provided such instructions reasonably appear to have been
received from an Authorized Person.
5. Services on a Continuing Basis.
(a) In preparing the accounting records of the Fund, PFPC shall
comply with generally accepted accounting principles (GAAP) or with an
alternative method described in Written Instructions provided that such
alternative method is not unreasonable and would not be burdensome to PFPC.
PFPC will perform the following accounting services for the Fund on an ongoing
or a daily basis, as appropriate, it being understood that the services provided
hereunder shall be provided on a per Series basis in a manner that properly
identifies the Series as to which such services relate:
(1) On a daily basis, journalize the Fund's investment,
capital Share and income and expense activities and post to the
general ledger;
(2) Verify with the Fund's custodian(s), investment
buy/sell trade tickets which may be sent electronically via modem from
the Advisor and which may include securities acquired for Fund shares
when received from the Advisor, transmit verified trades to the Fund's
custodian(s) for proper settlement, and PFPC shall promptly notify the
Advisor of any trades received which have not been so verified;
(3) Maintain individual ledgers for investment securities;
(4) Maintain historical tax lots for each security;
(5) Reconcile cash and investment balances with the
custodian, and provide the Advisor with the beginning cash balances
available for investment purposes;
(6) Update the cash availability and projected
receivables/payables throughout the day as required by the Advisor and
direct the custodian(s) to invest idle cash in repurchase agreements
and/or in other liquid investments as
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mutually agreed upon in accordance with the Written Instructions of
the Advisor;
(7) Post to and prepare the Statement of Assets and
Liabilities and the Statement of Operations;
(8) Calculate various contractual expenses (e.g., advisory
and custody fees) and confirm to the Fund the amounts paid by the Fund
in respect of such contracts as provided for therein;
(9) Monitor the expense accruals and notify Fund management
of any proposed adjustments;
(10) Control all disbursements and authorize such
disbursements upon Written Instructions;
(11) Calculate capital gains and losses;
(12) Determine net income;
Obtain security market quotes from independent pricing
services approved by the Fund, or if such quotes are unavailable, then
obtain such prices from, or in accordance with the directions of, the
Advisor, and in either case calculate the market value of the Fund's
investments;
(14) Transmit or mail a copy of the daily portfolio
valuations and a listing of acquisitions and dispositions of
securities of the Fund and, as of each month-end, transmit or mail a
floppy diskette reflecting securities holdings to the Advisor;
(15) Consistent with the requirements of the Registration
Statement or Written Instructions which change those requirements,
compute the net asset values and, where applicable, the public
offering prices of the Series and promptly report thereon to the
custodian of each Series;
(16) Compute, and report to the Fund, each Series' yields,
expense ratios, portfolio turnover rate, and, portfolio average
dollar-weighted maturity; and
(17) Compute amounts of foreign currency needed to settle
foreign securities transactions,
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and in accordance with Written Instructions, enter into forward
currency contracts with banks and brokers.
(b) In addition to the accounting services described in the
foregoing Paragraph 5(a), PFPC will:
(1) Prepare monthly financial statements, which will
include the following items (the form and content of such statements
shall be in accordance with GAAP):
Schedule of Investments (as requested)
Statement of Assets and Liabilities
Statement of Shareholders' Equity
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses;
2) Prepare quarterly broker security transactions
summaries, including monthly reports of brokerage commissions paid
setting forth such information as the Fund may reasonably request and
as to which the parties may agree;
(3) Prepare monthly security transaction listings;
(4) Supply various Fund statistical data and reports as
requested by the Fund on an ongoing basis including the reports set
forth on Schedule A hereto;
(5) Prepare for execution and file the Fund's Federal and
state income tax returns,, Federal Excise Tax returns, tax returns for
the States of Maryland and California and any supporting schedules to
such returns and assist the Fund in determining the amount, types and
timing of dividend and capital gains distributions necessary for each
Series to avoid being required to pay Federal Income or Excise taxes
on its income and gains;
(6) Assist in the preparation of and file the Fund's
Semi-Annual Reports with the SEC on Form N-SAR;
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(7) Assist in the preparation of and file with the SEC the
Fund's annual and semi-annual Shareholder reports;
(8) Assist in the preparation of registration statements on
Form N-lA, Form N-2 and other filings relating to the registration of
Shares;
(9) Monitor and report monthly any changes in each Series'
status as a regulated investment company under Sub-Chapter M of the
Internal Revenue Code of 1986, as amended;
(10) In the event that any securities transaction of the
Fund fails to settle in accordance with Written or Oral Instructions,
PFPC shall promptly notify the Fund; and
(11) Monitor each Series' securities positions to determine
whether, with respect to 75 percent of the value of each Series' total
assets, more than 5 percent of the value of each Series' total assets
are invested in any one issuer and, if so, alert the Fund as soon as
practicable of such circumstances.
6. Records. PFPC shall keep the following records:
(a) all books and records with respect to the Fund's books of
account, including without limitation those required by rule 3la-1
under the 1940 Act (except paragraphs b(4) and (9)) and records
necessary to support each Series' tax returns; and
(b) records of the Fund's securities and exchange listed
financial futures and forward currency transactions.
The books and records pertaining to the Fund which are in the
possession of PFPC shall be the property of the Fund and shall be returned to
the Fund or its designee upon request. Such books and records shall be prepared
and maintained as required by the 1940 Act and other applicable laws and rules
and regulations. The Fund, or the Fund's authorized representatives, shall have
access to such books and records at all times during PFPC's normal business
hours. Upon the reasonable request of the Fund, copies of any such books and
records shall be provided by PFPC to the
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Fund or the Fund's authorized designee or representative at the Fund's expense.
7. Liaison with Accountants. PFPC shall act as liaison with the
Fund's independent public accountants and shall provide them with account
analyses, fiscal year summaries, and such other information, including audit
related schedules, as may be necessary to assure that the necessary information
is made available to such accountants for the expression of their opinion, as
such may be required by the Fund from time to time.
8. Confidentiality. PFPC agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Fund and its prior, present or potential Shareholders or relative to the
Advisor, except, after prior notification to and approval in writing by the
Fund, which approval may not be withheld where PFPC may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Fund.
9. Equipment Failures. In the event of equipment failures beyond
PFPC's control, PFPC shall, at no additional expense to the Fund, promptly
notify the Fund and take prompt, reasonable steps to minimize service
interruptions but shall have no liability with respect thereto except, at its
own expense, to reconstruct any records of the Fund that PFPC is required to
prepare and maintain hereunder. PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. An equipment failure shall be
beyond PFPC's control if it results from one or more of the events described
in the last sentence of the first paragraph of Paragraph 14 hereunder.
10. Right to Receive Advice. PFPC shall be protected in any action
or inaction PFPC takes in reliance on advice of PFPC's counsel. PFPC shall
promptly notify the Fund of the receipt of such advice within reasonable time.
11. Compliance with Governmental Rules and Regulations. PFPC
agrees to perform its duties hereunder in accordance with applicable law;
however, PFPC assumes no responsibility for ensuring that the Fund complies
with the applicable requirements of the Securities Act of 1933 (the "1933
Act"), the Securities Exchange Act of 1934 (the "1934 Act"), the 1940 Act,
the Commodities Exchange Act (the
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"CEA"), and any laws, rules and regulations of governmental authorities having
jurisdiction.
12. Compensation. As compensation for the services rendered by PFPC
during the term of this Agreement, the Fund will pay to PFPC an annual fee
calculated daily and payable monthly, as may be agreed to in writing from time
to time by the Fund and PFPC.
13. Indemnification.
(a) The Fund agrees to indemnify and hold harmless PFPC and its
sub-contractors from all taxes, charges, expenses (except expenses that are
inherent to its duties hereunder), assessments, claims and liabilities
(including, without limitation, liabilities arising under the 1933 Act, the 1934
Act, the 1940 Act, the CEA, and foreign securities laws, all as or to be amended
from time to time) including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action or thing which
PFPC takes or does or omits to take or do (i) at the request or on the direction
of or in reliance on the advice of the Fund or the Fund's counsel on behalf of
the Fund or (ii) upon Oral or Written Instructions provided by the Fund, or an
Affiliate, provided such Affiliate has not acted negligently (unless such
Affiliate has received and transmitted erroneous instructions received from an
Authorized Person that is not an Affiliate) provided, that neither PFPC nor any
of its sub-contractors shall be indemnified against any liability (or any
expenses incident to such liability) arising out of PFPC's own misfeasance, bad
faith, negligence or disregard of its duties or responsibilities described in
this Agreement.
(b) PFPC shall not pay or settle any claim, demand, expense or
liability in respect of which PFPC is entitled to be indemnified pursuant to
paragraph (a) above an ("Indemnifiable Claim") without the express written
consent of the Fund. PFPC shall notify the Fund promptly of receipt of
notification of an Indemnifiable Claim. Unless the Fund notifies PFPC within 30
days of receipt of Written Notice of such Indemnifiable Claim that the Fund does
not intend to defend such Indemnifiable Claim, the Fund shall defend PFPC from
such Indemnifiable Claim. The Fund shall have the right to defend any
Indemnifiable Claim at its own expense, such defense to be conducted by counsel
selected by the Fund. Further, PFPC may join the Fund in such defense at PFPC's
own expense, but to the extent that it shall so desire, the Fund shall direct
such defense. If the Fund shall fail or refuse to defend, pay or settle an
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Indemnifiable Claim, PFPC, at the Fund's expense consistent with limitations
concerning attorney's fees expressed in Paragraph 13(a) hereof, may provide its
own defense.
14. Responsibility of PFPC. PFPC hereby represents that it is
experienced in the provision of the services covered by this Agreement. In the
performance of its duties hereunder, PFPC shall be obligated to exercise due
care and diligence and to act in a timely manner and in good faith to assure the
accuracy and completeness of all services performed under this Agreement. PFPC
shall be under no duty to take any action on behalf of the Fund except as
specifically set forth herein or as may be specifically agreed to by PFPC in
writing. PFPC shall be responsible for its own negligent failure to perform its
duties under this Agreement. In assessing negligence for purposes of this
Agreement, the parties agree that the standard of care applied to PFPC's conduct
shall be the care that would be exercised by a similarly situated service
provider, supplying substantially the same services under substantially similar
circumstances. Notwithstanding the foregoing, PFPC shall not be responsible for
losses beyond its control, provided that PFPC has acted in accordance with the
provisions of this Agreement and the standard of care set forth above and
provided further that PFPC shall only be responsible for that portion of losses
or damages suffered by the Fund attributable to the negligence of PFPC. Losses
shall be beyond PFPC's control if they result from or occur because of delays or
errors or loss of data provided by a person other than PFPC or its Affiliates,
or their respective employees or agents, or acts of civil or military authority,
national emergencies, labor difficulties (other than those of PFPC or its
Affiliates), fire, equipment failure resulting from forces external to the
premises of PFPC or its Affiliates, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
or power supply external to the premises of PFPC or its Affiliates and such
other circumstances beyond PFPC's control.
Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC in connection with its duties under this
Agreement shall not be under any duty or obligation to inquire into and shall
not be liable for or in respect of the validity or invalidity or authority or
lack thereof of any Oral or Written Instruction received from the Fund, or an
Affiliate, provided such Affiliate has not acted negligently (unless such an
Affiliate has received and transmitted erroneous instructions received from an
Authorized Person that is not an Affiliate), notice or other instrument which
conforms to the applicable requirements of
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this Agreement, and which PFPC reasonably believes to be genuine.
PFPC shall have no liability to the Fund for any losses or damages,
the nature of which is or was remote, unforeseen, unforeseeable or beyond the
scope of reasonable anticipation at the time this Agreement was executed.
15. Duration and Termination. This Agreement shall continue in
effect for one year from the date hereof and shall continue in force from year
to year thereafter, but only as long as such continuance is approved by both
parties. This Agreement may be terminated by either party on not less than 180
days prior written notice to the other party. The foregoing provisions
notwithstanding, either party may terminate this Agreement in the event of a
material breach of the terms hereof after written notice to the other party of
such breach and a reasonable time for cure of such breach, unless such breach is
not curable and, in such circumstances, this Agreement shall terminate, at the
option of the injured party, three months after the date such notice is given.
16. Notices. All notices and other communications, including Written
Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shall be in writing or by confirming telegram, cable,
telex or facsimile sending device. Notices shall be addressed (a) if to PFPC at
PFPC's address, Bellevue Corporate Center, 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000; (b) if to the Fund, at the address of the Fund; or (c) if to
neither of the foregoing, at such other address as shall have been notified to
the sender of any such Notice or other communication. All postage, cable, telex
and facsimile sending device charges arising from the sending of a Notice
hereunder shall be paid by the sender.
17. Further Actions. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
18. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
19. Delegation. On thirty (30) days prior written notice to the
Fund, PFPC may assign its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of Provident National Bank or PNC
Financial Corp provided that (i) the delegate agrees with PFPC to comply
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with all relevant provisions of this Agreement and applicable law; and (ii) PFPC
and such delegate shall promptly provide such information as the Fund may
request, and respond to such questions as the Fund may ask, relative to the
delegation, including (without limitation) the capabilities of the delegate. In
the event of such delegation, PFPC shall remain liable under this Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to Written and/or Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof of otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their officers designated below on the day and year first above
written.
DIMENSIONAL EMERGING MARKETS FUND INC.
By: /s/ Xxxxxxx X. Xxxxxx
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PROVIDENT FINANCIAL PROCESSING CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
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APPENDIX A
The following persons are authorized to issue Oral Instructions and to
sign Written Instructions on behalf of the Fund:
[to be completed by XXX]
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XXXXXXXXXXXXXX XXX ACCOUNTING SERVICES AGREEMENT
SCHEDULE A
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PURSUANT TO PARAGRAPH (5) (b) (4) OF THE AGREEMENT, PFPC WILL PROVIDE
THE FOLLOWING REPORTS:
REPORT OR STATISTIC FREQUENCY
------------------- ---------
a. Expense ratio analysis Monthly
b. Brokerage commission report and affiliated
brokerage report Quarterly/
Annually
c. Listing of securities for which quotations
are not readily available (for Board meetings) Quarterly
d. Split xxxx report Quarterly
e. Breakdown on NAV per share by country Monthly