EXHIBIT (k)(2)
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made this 9th day of December, 1988, between
THE FIRST AUSTRALIA PRIME INCOME FUND, INC., a Maryland corporation (the
"Fund"), and PRUDENTIAL MUTUAL FUND MANAGEMENT, INC., a Delaware corporation
(the "Administrator").
WHEREAS, the Fund is a non-diversified closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Fund has retained an investment manager and investment
adviser for the purpose of investing its assets in securities and desires to
retain the Administrator for certain administrative services, and the
Administrator is willing to furnish such administrative services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
1. The Fund hereby appoints the Administrator to provide the services
set forth below, subject to the overall supervision of the Board of Directors of
the Fund, for the period and on the terms set forth in this Agreement. The
Administrator hereby accepts such appointment and agrees during such period to
render the services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
2. Subject to the supervision of the Board of Directors of the Fund,
the Administrator shall provide office facilities and personnel adequate to
perform the following services for the Fund:
(a) oversee the determination and publication of the Fund's net
asset value in accordance with the Fund's policy as adopted from time
to time by the Board of Directors;
(b) oversee the maintenance of the books and records of the Fund
required under Rule 31a-1(b)(4) under the Investment Company Act;
(c) prepare the Fund's U.S. federal, state and local income tax
returns;
(d) prepare the financial information for the Fund's proxy
statements and quarterly and annual reports to shareholders:
(e) prepare the Fund's periodic financial reports to the
Securities and Exchange Commission:
(f) respond to or refer to the Fund's officers or transfer agent
shareholder inquires relating to the Fund; and
(g) prepare reports related to Preferred Stock, as required by any
rating agencies.
All services to be furnished by the Administrator, under this Agreement
may be furnished through the medium of any directors, officers or employees of
the Administrator.
Each party shall bear all expenses of its employees and overhead
incurred by it in connection with its duties under this Agreement. The
Administrator further agrees to pay all salaries and fees of the Fund's
directors and officers who are interested persons (as such term is defined in
the Investment Company Act) of the Administrator. The Fund will bear all of its
own expenses, including expenses of organizing the Fund; fees of any investment
manager or investment adviser; fees of the Fund's directors who are not
interested persons (as such term is
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defined in the Investment Company Act) of the Administrator; out-of-pocket
travel expenses for all directors and other expenses incurred by the Fund in
connection with the directors' meetings; interest expense; taxes and
governmental fees; brokerage commissions and other expenses incurred in
acquiring or disposing of the Fund's portfolio securities; expenses of preparing
stock certificates; expenses in connection with the issuance, offering,
distribution, sale or underwriting of securities issued by the Fund; expenses of
registering and qualifying the Fund's shares for sale with the Securities and
Exchange Commission and in various states and foreign jurisdictions; auditing,
accounting, insurance and legal costs; custodian, dividend disbursing and
transfer agent expenses; expenses of obtaining and maintaining, stock exchange
listings of the Fund's shares; and the expenses of shareholders' meetings and of
the preparation and distribution of proxies and reports to shareholders.
3. The Fund will pay the Administrator a fee at the annual rate of
0.15% of the Fund's average weekly net assets applicable to Common and Preferred
stock up to $900 million and 0.10% of such assets in excess of $900 million,
computed based upon net asset value applicable to Common and Preferred Stock at
the end of each week and payable at the end of each calendar month.
4. The Administrator assumes no responsibility under this Agreement
other than to render the service called for hereunder, and specifically assumes
no responsibilities for investment advice of the investment or reinvestment of
the Fund's assets.
5. The Administrator shall not be liable for any error of judgment or
for any loss suffered by the Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the
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performance of, or from reckless disregard by it of its obligations and duties
under, this Agreement.
6. This Agreement is effective as of December 9, 1988, and shall
continue in effect until December 31, 1989. If not sooner terminated, this
Agreement shall continue in effect for successive periods of twelve months
thereafter, provided that each such continuance shall be specifically approved
annually by the vote of a majority of the Fund's Board of Directors who are not
parties to this Agreement or interested persons (as such term is defined in the
Investment Company Act) of any such party, cast in person at a meeting called
for the purpose of voting on such approval and either (a) the vote of a majority
of the outstanding voting securities of the Fund, voting as a single class, or
(b) the vote of a majority of the Fund's Board of Directors: Notwithstanding the
foregoing, this Agreement may be terminated at any time by the Fund's Board of
Directors or a majority of the outstanding voting securities of the Fund, voting
as a single class, on 60 days' prior written notice to the Administrator. The
Administrator may terminate this Agreement at any time on not less than 120
days' prior written notice to the Fund. This Agreement shall automatically
terminate in the event of its assignment (as such term is defined in the
Investment company Act).
7. Nothing in this Agreement shall limit or restrict the right of any
director, officer or employee of the Administrator who may also be a director,
officer or employee of the Fund to engage in any other business or to devote his
time and attention in part to the management or other aspects of any business,
whether of a similar or dissimilar nature, nor limit or restrict the right of
the Administrator to engage in any other business or to render services of any
kind to any other corporation, firm, individual or association.
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8. During the term of this Agreement, the Fund agrees to furnish the
Administrator at its principal office prior to use thereof all prospectuses,
proxy statements, reports to stockholders, sales literature, or other material
prepared for distribution to stockholders of the Fund or the Fund or the public
that refer in any way to the Administrator, and not to use such material if the
Administrator reasonably objects in writing within five business days (or such
other time as may be mutually agreed) after receipt thereof. In the event of
termination of this Agreement, the Fund will continue to furnish to the
Administrator copies of any of the above-mentioned materials that refer in any
way to the Administrator. The Fund shall furnish or otherwise make available to
the Administrator such other information relating to the business affairs of the
Fund as the Administrator at any time, or from time to time, reasonably requests
in order to discharge its obligations hereunder.
9. The Agreement may be amended by mutual written consent.
10. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, (1) to the Administrator at Xxx Xxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: President; with a copy to the Fund c/o EquitiLink
International Management Limited, Xxxxx Xxxxx, Xxxxx Xxxxxx, Xx. Helier, Jersey,
Channel Islands.
11. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York:
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
BY: /s/ Xxxxx X. Xxxxxxx
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PRUDENTIAL MUTUAL FUND MANAGEMENT, INC.
BY: /s/ illegible signature
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