ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT (the "Agreement") dated as of September 21,
2006 between XXXXXX XXXXXXX CHINA A SHARE FUND, INC., a Maryland corporation
(the "Fund"), and XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC., a Delaware
corporation ("MSIM").
WHEREAS, the Fund desires to retain MSIM to render certain management
administrative and other services to the Fund, and MSIM is willing to render
such services; and
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Appointment of Administrator
The Fund hereby appoints MSIM to act as administrator to the Fund for
the period and on the terms set forth in this Agreement. In connection
therewith, MSIM accepts such appointment and agrees to render the services and
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services on the terms and for the
compensation herein provided. The parties hereto agree that MSIM may render and
provide the services described herein directly or through the services of third
parties. In connection with such appointment, the Fund has delivered or will
deliver to MSIM copies of each of the following documents and will deliver to it
all future amendments and supplements, if any:
A. Certified copies of the Articles of Incorporation of the Fund as
presently in effect and as may be amended from time to time;
B. A certified copy of the Fund's By-Laws as presently in effect and
as may be amended from time to time;
C. A copy of the resolution of the Fund's Board of Directors
authorizing this Agreement;
D. The Fund's registration statement on Form N-2 as filed with, and
declared effective by, the U.S. Securities and Exchange Commission ("SEC"), and
all amendments thereto;
E. Certified copies of the resolutions of the Fund's Board of
Directors authorizing: (1) certain persons to give instructions to the Fund's
Custodian pursuant to the Custody Agreement dated September 21, 2006 between the
Fund and XX Xxxxxx Chase Bank, N.A. (the "Custody Agreement") and (2) certain
persons to sign checks and pay expenses on behalf of the Fund.
F. A copy of the Investment Advisory Agreement dated September 21,
2006 between the Fund and MSIM.
G. A copy of the Custody Agreement.
H. Such other certificates, documents or opinions which MSIM may, in
its reasonable discretion, deem necessary or appropriate in the proper
performance of its duties.
2. Representation and Warranties of MSIM
MSIM represents and warrants to the Fund that:
A. It is a corporation, duly organized and existing in good standing
under the laws of Delaware.
1
B. It is duly qualified to carry on its business in the State of New
York.
C. It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform the services contemplated in
this Agreement.
D. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
E. It has and will continue to have and maintain, directly or through
third parties, the necessary facilities, equipment and personnel to perform its
duties and obligations under this Agreement.
3. Services Provided by MSIM
MSIM shall discharge, directly, or through third parties, the
following responsibilities subject to the control of the Fund's Board of
Directors, and in compliance with the objectives, policies and limitations set
forth in the Fund's registration statement, By-Laws and applicable laws and
regulations.
A. General Administration. Under the direction of the Fund's Board of
Directors, MSIM shall manage, administer and conduct all of the general business
activities of the Fund other than those which have been contracted to third
parties by the Fund, and shall, directly or through third parties, provide the
personnel and facilities necessary to perform such general business activities
under the supervision of the Fund's Board of Directors and executive officers.
In addition, MSIM shall oversee the performance of administrative and
professional services rendered to the Fund by others.
B. Accounting. MSIM shall, directly or through third parties, provide
the following accounting services to the Fund:
1) Maintenance of the books and records and accounting controls for
the Fund's assets, including records of all securities transactions;
2) Weekly calculation of the net asset value for the Fund's portfolio;
3) Accounting for dividends and interest received and distributions
made by the Fund;
4) Preparation and filing of the Fund's U.S. tax returns and annual
and semi-annual reports;
5) The production of transaction data, financial reports and such
other periodic and special reports as the Board of Directors of the
Fund may reasonably request;
6) The preparation of financial statements for the annual and
semi-annual reports and other shareholder communications;
7) Liaison with the Fund's independent registered public accounting
firms;
8) Monitoring and administration of arrangements with the Fund's
custodian and depository banks; and
2
9) Maintenance of (but not the payment for) the Fidelity Bond required
to be maintained under the Investment Company Act of 1940, as amended
(the "1940 Act"), and preparation of the filings required in
connection therewith.
4. Services To Be Obtained Independently By The Fund
The following shall be provided at no expense to MSIM hereunder:
A. Organizational expenses;
B. Services of an independent accountant;
C. Services of outside legal counsel (including such counsel's review
of the Fund's registration statement, proxy materials and other reports and
materials prepared by MSIM directly or through third parties under this
Agreement);
D. Any services contracted for by the Fund directly from parties other
than MSIM;
E. Trading operations and brokerage fees, commissions and transfer
taxes connection with the purchase and sale of securities for its investment
portfolio;
F. Taxes, insurance premiums and other fees and expenses applicable to
it operation;
G. Investment advisory services;
H. Costs incidental to any meetings of shareholders including, but not
limited to, legal and accounting fees, proxy filing fees and the preparation,
printing and mailing of any proxy materials;
I. Costs incidental to Directors' meetings, including fees and
expenses of Directors;
J. The salary and expenses of any officer or employee of the Fund;
K. Custodian and depository banks, and all services related thereto;
L. Transfer Agents and Dividend Disbursing Agents, and all services
related thereto;
M. Costs incidental to the preparation, printing and distribution of
its registration statement and any amendments thereto, and shareholder reports;
N. All registration fees and filing fees required under the securities
laws of the United States and state regulatory authorities; and
O. Fidelity bond and Director's and Officers' liability insurance.
3
5. Prices, Charges and Instructions
A. The Fund will pay to MSIM, as compensation for the services
provided and the related out-of-pocket expenses assumed pursuant to this
Agreement, an annual fee, in monthly installments, of 0.08% of the average daily
net assets of the Fund. MSIM shall bear the cost of heat, light, power and other
utilities provided to the Fund and the cost of out-of-pocket expenses incurred
in the ordinary course of providing services under this Agreement, such as
telephone, fax, system usage, internal controls assurance (such as a Statement
on Auditing Standards (SAS) No. 70 report), envelopes, postage and special
delivery mail. The Fund shall reimburse MSIM for all extraordinary expenses and
the expenses of one or more independent pricing services, approved from time to
time by the Board of Directors of the Fund, to obtain securities prices in
connection with determining the net asset value of the Fund.
B. At any time MSIM, and third parties providing such services for the
benefit of the Fund through arrangements with MSIM may apply to any officer of
the Fund or officer of the Fund's investment adviser for instructions, and may
consult with legal counsel for the Fund, or its own outside legal counsel, at
the expense of the Fund, with respect to any matter arising in connection with
the services to be performed by MSIM or any third party appointed by MSIM under
this Agreement and MSIM and such third parties shall not be liable and shall be
indemnified by the Fund for any action taken or omitted by it in good faith in
reliance upon such instructions. In carrying out its duties hereunder, MSIM and
such third parties shall be protected and indemnified in acting upon any paper
or document believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any person, until receipt of written notice thereof from the Fund.
6. Limitation of Liability and Indemnification
A. MSIM shall be responsible hereunder for the performance of only
such duties as are set forth or contemplated herein or contained in instructions
given to it which are not contrary to this Agreement. MSIM shall have no
liability for any loss or damage resulting from the performance or
nonperformance of its duties hereunder unless solely caused by or resulting from
the gross negligence or willful misconduct.
B. The Fund shall indemnify and hold MSIM, and third parties providing
services for the benefit of the Fund through arrangements with MSIM, harmless
from all loss, cost, damage and expense, including reasonable expenses for
counsel, incurred by such person resulting from any claim, demand, action or
omission by it in the performance of its duties hereunder or under such
arrangements with MSIM, or as a result of acting upon any instructions
reasonably believed by any such person to have been executed by a duly
authorized officer of the Fund or of the Fund's investment advisers, provided
that this indemnification shall not apply to actions or omissions of MSIM, its
officers, employees or agents in cases of its or their own gross negligence or
willful misconduct.
C. The Fund will be entitled to participate at its own expense in the
defense, or, if it so elects, to assume the defense of any suit brought to
enforce any liability subject to the indemnification provided above, but, if the
Fund elects to assume the defense, such defense shall be conducted by counsel
chosen by the Fund. In the event the Fund elects to assume the defense of any
such suit and retain such counsel, MSIM or any of its affiliated persons or any
third parties providing services for the benefit of the Fund through
arrangements with MSIM, named as defendant or defendants in the suit, may retain
additional counsel but shall bear the fees and expenses of such counsel unless
at such time the Fund specifically authorizes in writing the retaining of such
counsel at the Fund's expense.
4
D. No provisions of this Agreement shall be deemed to protect MSIM or
any of its directors, officers and/or employees, against liability to the Fund
or its shareholders to which it might otherwise be subject by reason of any
fraud, willful misfeasance or gross negligence in the performance of its duties
or the reckless disregard of its obligations under this Agreement.
7. Confidentiality
MSIM agrees that, except as otherwise required by law or as necessary
in accordance with this Agreement, MSIM will keep confidential all records and
information in its possession relating to the Fund or its shareholders or
shareholder accounts and will not disclose the same to any person except at the
request or with the written consent of the Fund.
8. Compliance With Governmental Rules and Regulations
The Fund assumes full responsibility hereunder for complying with all
applicable requirements of the Securities Act of 1933, the 1940 Act and the
Securities Exchange Act of 1934, all as amended, and any laws, rules and
regulations of governmental authorities having jurisdiction, except to the
extent that MSIM specifically assumes any such obligations under the terms of
this Agreement.
MSIM shall, directly or through third parties, maintain and preserve
for the periods prescribed, such records relating to the services to be
performed by MSIM under this Agreement as are required pursuant to the 1940 Act
and the Securities Exchange Act of 1934. All such records shall at all times
remain the respective properties of the Fund, shall be readily accessible during
normal business hours to each, and shall be promptly surrendered upon the
termination of this Agreement or otherwise on written request. Records shall be
surrendered in usable machine readable form.
9. Status of MSIM
The services of MSIM to the Fund are not to be deemed exclusive, and
MSIM shall be free to render similar services to others. MSIM shall be deemed to
be an independent contractor hereunder and shall, unless otherwise expressly
provided herein authorized by the Fund from time to time, have no authority to
act or represent the Fund in any way or otherwise be deemed an agent of the Fund
with respect to this Agreement.
10. Printed Matter Concerning the Fund or MSIM
Neither the Fund nor MSIM shall, with respect to this Agreement,
publish and circulate any printed matter which contains any reference to the
other party without its prior written approval, excepting such printed matter as
refers in accurate terms to MSIM's appointment under this Agreement and except
as required by applicable laws.
11. Term, Amendment and Termination
This Agreement may be modified or amended from time to time by mutual
agreement between the parties hereto. The Agreement shall remain in effect for a
period of one year from the date the Fund's registration statement on file with
the SEC becomes effective and shall automatically continue in effect thereafter
unless terminated by either party at the end of such period or thereafter on 60
days' prior written notice. Upon termination of the Agreement, the Fund shall
pay to MSIM such compensation as may be due under the terms hereof as of the
date of such termination.
12. Notices
5
Any notice or other communication authorized or required by this
Agreement to be given to any party mentioned herein shall be sufficiently given
if addressed to such party and mailed postage prepaid or delivered to its
principal office.
13. Non-Assignability
This Agreement shall not be assigned by any of the parties hereto
without the prior consent in writing of the other party.
14. Successors
This Agreement shall be binding on and shall inure to the benefit of
the Fund and MSIM, and their respective successors.
15. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
6
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed as of the day and year first above written.
ATTEST: XXXXXX XXXXXXX CHINA A SHARE FUND,
INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxxxx
---------------------------------------- ---------------------------------
ATTEST: XXXXXX XXXXXXX INVESTMENT
MANAGEMENT INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------- ---------------------------------
