SUB-ADMINISTRATION AGREEMENT
Agreement dated as of ______, 2006 between Xxxxxx Xxxxxxx Investment
Management Inc., a Delaware corporation (the "MSIM") and X.X. Xxxxxx Investor
Services Co., a Delaware corporation ("X.X. Xxxxxx").
WHEREAS, MSIM acts as Administrator to Xxxxxx Xxxxxxx China A Share Fund,
Inc. (the "Fund"); and
WHEREAS, X.X. Xxxxxx is a service company which provides sub-administrative
and other services to investment companies and others; and
WHEREAS, MSIM desires to retain X.X. Xxxxxx to render certain
sub-administrative, and other services for the benefit of the Fund and X.X.
Xxxxxx is willing to render such services set forth below;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Appointment of Sub-Administrator
MSIM hereby appoints X.X. Xxxxxx to act as Sub-Administrator to provide
certain administrative services for the Fund for the benefit of the Fund for the
period and on the terms set forth in this Agreement. X.X. Xxxxxx 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. In
connection with such appointment, MSIM will deliver to X.X. Xxxxxx copies of
each of the following documents (upon MSIM's receipt thereof) and will deliver
to it all future amendments and supplements, if any:
A. The Articles of Incorporation of MSIM as presently in effect and as
amended from time to time;
B. MSIM's By-Laws as presently in effect as amended from time to time;
C. A copy of the resolution of MSIM's Board of Directors authorizing
this Agreement;
D. MSIM's registration statement on Form N-2 as filed with, and
declared effective by, the U.S. Securities and Exchange Commission, and all
amendments thereto;
E. A copy of the Investment Advisory and Management Agreement between
the Fund and Xxxxxx Xxxxxxx Investment Management Inc. (the "Manager");
F. A copy of the Custodian Agreement between MSIM and Xxxxxx Guaranty
Trust Company (the "U.S. Custodian Agreement");
G. Copies of the resolutions of MSIM's Board of Directors authorizing:
(1) certain officers and employees of X.X. Xxxxxx to give instructions to
the Fund's Custodians pursuant to the Custodian Contracts, and (2) certain
officers and employees of X.X. Xxxxxx to give instructions to the Fund's
Transfer Agent pursuant to the Transfer Agent Agreement, and (3) certain
officers and employees of X.X. Xxxxxx to sign checks and pay expenses on
behalf of MSIM.
2. Representations and Warranties of X.X. Xxxxxx
X.X. Xxxxxx represents and warrants to MSIM that:
A. It is a Delaware corporation, duly organized and validly existing
in good standing under the laws of the State of Delaware.
B. 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.
C. All requisite corporate proceedings have been taken to authorize it
to enter into and perform this Agreement.
D. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and obligations
under this Agreement.
3. Services Provided by X.X. Xxxxxx
X.X. Xxxxxx will provide the following services subject to the control and
supervision of MSIM and 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 Sub-Administration. Under the direction of MSIM and the
Fund's Board of Directors, X.X. Xxxxxx 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. The foregoing
notwithstanding, X.X. Xxxxxx will as part of its services hereunder provide
such monitoring and supervision of the activities of any third party
service providers retained by the Fund as X.X. Xxxxxx and MSIM may
separately agree in writing. X.X. Xxxxxx shall provide the personnel and
facilities necessary to perform such general business activities including
a treasurer under the supervision of the Fund's Board of Directors and
executive Officers.
B. Accounting. X.X. Xxxxxx shall provide the following accounting
services for the benefit of 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;
(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,
semi-annual and quarterly reports and other shareholder
communications;
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(7) Liaison with the Fund's independent registered public
accounting firms;
(8) Monitoring and administration of arrangements with the Fund's
custodians and depository banks; and
(9) Maintenance of (but not the payment for) the Fidelity Bond
required to be maintained under the 1940 Act and preparation of the
filings required in connection therewith.
C. Other Information. X.X. Xxxxxx will furnish for the benefit of the
Fund such other information as is required by law, and such statistical
information as may be reasonably requested by MSIM, including but not
limited to information pursuant to the Fund's Custodian Agreement.
4. Services To Be Obtained Independently By MSIM
The following services and related costs and expenses shall be provided or
obtained independently by the Fund or MSIM at no expense to X.X. Xxxxxx:
A. Organizational expenses;
B. Services of an independent registered public accounting firm;
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 X.X. Xxxxxx under this Agreement);
D. Any services contracted for by the Fund directly from parties other
than X.X. Xxxxxx, including the services of any other administrators
retained by the Fund;
E. Trading operations and brokerage fees, commissions and transfer
taxes in connection with the purchase and sale of securities for its
investment portfolio;
F. Taxes, insurance premiums and other fees and expenses applicable to
its 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. Costs incidental to the preparation, printing and distribution of
its registration statement and any amendments thereto, and shareholder
reports;
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M. All registration fees and filing fees required under the securities
laws of the United States and state regulatory authorities;
N. Fidelity bond and Director's and Officers' liability insurance;
O. Transfer agency and dividend reinvestment services; and
5. Prices, Charges and Instructions
A. MSIM will pay to X.X. Xxxxxx, as compensation for the services
provided and the expenses assumed pursuant to this Agreement, as agreed to
in a written fee schedule approved by the parties hereto (see Schedule A).
B. At any time X.X. Xxxxxx may apply to any officer of the Fund or
MSIM or officer of the Manager for instructions, and may consult with legal
counsel for the Fund or MSIM, or its own outside legal counsel, with
respect to any matter arising in connection with the services to be
performed by X.X. Xxxxxx under this Agreement and X.X. Xxxxxx shall not be
liable and shall be indemnified by MSIM for any action taken or omitted by
it in good faith in reliance upon such instructions. In carrying out its
duties hereunder, X.X. Xxxxxx shall be entitled to act in accordance with
instructions of the Fund or MSIM contained in documents reasonably believed
by X.X. Xxxxxx 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 or
MSIM.
6. Limitation of Liability and Indemnification
A. J.P. Xxxxxx shall be responsible for the performance of only such
duties as are set forth or contemplated herein or contained in any separate
writing contemplated under Section 3.A hereof or in instructions given to
it which are not contrary to this Agreement. X.X. Xxxxxx shall have no
liability for any loss or damage resulting from the performance or
non-performance of its duties hereunder unless solely caused by or
resulting from gross negligence, willful misconduct or bad faith of X.X.
Xxxxxx, its officers and employees.
B. MSIM shall indemnify and hold X.X. Xxxxxx harmless from all loss,
cost, damage and expense, including reasonable expenses for counsel,
incurred by X.X. Xxxxxx resulting from any claim, demand, action or
omission by it in the performance of its duties hereunder, or as a result
of acting upon any instructions reasonably believed by it to have been
executed by a duly authorized officer of MSIM or of MSIM's investment
advisers, provided that this indemnification shall not apply to actions or
omissions of X.X. Xxxxxx, its officers, employees or agents in cases of its
or their own negligence or willful misconduct.
C. MSIM 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 MSIM elects to assume the defense, such defense shall be conducted by
counsel chosen by MSIM. In the event MSIM elects to assume the defense of
any such suit and retain such counsel, X.X. Xxxxxx or any of its affiliated
persons, 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 MSIM specifically authorized in writing the retaining
of such counsel at MSIM's expense.
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D. No provisions of this Agreement shall be deemed to protect X.X.
Xxxxxx or any of its directors, officers and/or employees, against
liability to MSIM or its shareholders or to MSIM 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
X.X. Xxxxxx agrees that, except as otherwise required by law, X.X. Xxxxxx
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
X.X. Xxxxxx assumes no responsibility hereunder for the Fund's complying
with all applicable requirements of the Securities Act of 1933, the Investment
Company Act of 1940 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 X.X. Xxxxxx specifically assumes any such obligations
under the terms of this Agreement.
X.X. Xxxxxx shall maintain and preserve for the periods prescribed, such
records relating to the services to be performed by X.X. Xxxxxx under this
Agreement as are required pursuant to the Investment Company Act of 1940 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 the Fund, MSIM and X.X. Xxxxxx, 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 X.X. Xxxxxx
The services of X.X. Xxxxxx to MSIM and the Fund are not to be deemed
exclusive, and X.X. Xxxxxx shall be free to render similar services to others so
long as X.X. Xxxxxx'x services under this Agreement are not impaired thereby.
X.X. Xxxxxx shall be deemed to be an independent contractor, and shall, unless
otherwise expressly provided herein or authorized by MSIM or the Fund from time
to time, have no authority to act or represent MSIM or the Fund in any way or
otherwise be deemed an agent of MSIM or the Fund.
10. Printed Matter Concerning MSIM, or X.X. Xxxxxx
Neither MSIM nor X.X. Xxxxxx shall 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 X.X.
Xxxxxx'x appointment under this Agreement and except as required by applicable
laws.
11. Term, Amendment and Termination
This Agreement will become effective upon the date hereabout written and
shall continue in effect thereafter until terminated by X.X. Xxxxxx or MSIM upon
60 days' prior written notice to the other. This Agreement shall automatically
terminate in the event of its assignment (as defined in the 1940 Act).
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12. Notices
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. X.X. Xxxxxx may, without
further consent on the part of MSIM, subcontract for the performance hereof with
subsidiaries or other affiliates of X.X. Xxxxxx; provided, however, that X.X.
Xxxxxx shall be as fully responsible to MSIM for the acts and omissions of any
subcontractor as it is for its own acts and omissions and shall be responsible
for its choice of subcontractor.
14. Successors
This Agreement shall be binding on and shall inure to the benefit of MSIM
and X.X. Xxxxxx, 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.
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.
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
By:
------------------------------------
Name:
Title:
X.X. XXXXXX INVESTOR SERVICES CO.
By:
------------------------------------
Name:
Title:
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16. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.
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.
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
By:
------------------------------------
Name:
Title:
X.X. XXXXXX INVESTOR SERVICES CO.
By:
------------------------------------
Name:
Title:
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FUND ACCOUNTING /FUND ADMINISTRATION FEE SCHEDULE EFFECTIVE OCTOBER 1, 2002
FUND ACCOUNTING FEE SCHEDULE:
Fees will be calculated on a per fund basis, combining an annual fixed fee with
an asset based fee. Fee schedule is as follows:
Fixed fee: $15,000 per fund, PLUS
Asset fee: 1.26bps on asset, plus additional revenue components (see itemized
list below)
DAILY FUND ACCOUNTING - CORE SERVICE SET
Standard/Automated Inputs
Trade Processing
Capital Stock Processing
Expense Processing
Portfolio Income Recognition
Corporate Actions Processing
Daily Market Value Calculations utilizing automated price vendors
Standard/Automated Reporting & Deadlines
NAV Calculation (single class)
Standard NAV Delivery Timeframe (Based on market close)
Rate Calculation for daily distributing funds
NAV/Rate reporting to four parties
Fund Information Reporting to Client & 3rd Party Reporting Agency
Risk Reporting (e.g., Statistics, Past Due Income, etc.)
Daily Cash Reconciliation
Weekly Asset Reconciliation
Monthly SEC Yield calculations
Other Core Services
External Audit, SAS 70 & Client Due Diligence Co-ordination
Generally Accepted Accounting Principles and Materially Thresholds to Support a
daily valuation environment
Sched. A - 1
FUND ACCOUNTING - ADDITIONAL SERVICES
ADDITIONAL SERVICES CURRENTLY USED BY XXXXXX XXXXXXX
Additional Classes of shares No charge
Fair Market Value Calculations No charge
Market Value Calculations utilizing Manual Price
Vendors No charge
ADDITIONAL SERVICES NOT CURRENTLY USED BY XXXXXX XXXXXXX
Non-standard delivery timeframe of NAV's/Rates No charge
Manual End of Day NAV/Rate Reporting No charge
End of Day NAV/Rate Delivery for more than Four Parties No charge
Additional Classes of shares No charge
Materiality thresholds below market accepted levels based on
Industry Standards No charge
Daily or Weekly SEC yield calculations No charge
Insurance Accounting No charge
Projection of income & expenses No charge
Customized Programming At Cost
Out of Pocket Expenses At Cost
FUND ADMINISTRATION FEE SCHEDULE:
Fees will be calculated on a per fund basis, combining an annual fixed fee with
an asset based fee. Fee schedule is as follows:
Fixed fee: $9,000 per fund, PLUS
Asset fee: 1.175bps on asset, plus additional revenue components (see itemized
list below)
COMPLIANCE AND TREASURY - CORE SERVICE SET (INCLUDING PREPARATION, REVIEW, AND
DISTRIBUTION OF THE FOLLOWING:)
Daily 1940 Act Compliance Monitoring
Daily Prospectus/SAI Compliance Monitoring
Provide Form N-1A Firing Data
Budgeting Expense Accruals and Cash Disbursements
Administration of deferred Directors' compensation plan
Audit Co-ordination and Support
REPORTING
Quarterly Board Reporting
Monthly Management Reporting
Monthly Survey Reporting
Web-site Reporting
Portfolio Turnover
Monthly Performance Reporting (Pre & Post Tax)
Blue Sky Reporting
Sched. A - 2
COMPLIANCE & TREASURY - ADDITIONAL SERVICES
ADDITIONAL SERVICES CURRENTLY USED BY XXXXXX XXXXXXX
1940 ACT COMPLIANCE MONITORING
Securities lending limitations No charge
Rule 18/f/10666 No charge
Fund Mergers / Liquidations No charge
ADDITIONAL SERVICES CURRENTLY NOT USED BY XXXXXX XXXXXXX
Total Return Performance Reporting
Pre-tax Reporting (daily) No charge
Pre & Post Tax Reporting (daily) No charge
Peer Benchmark Reporting No charge
Attribution Performance (refer to Performance Measurement)
Customized Programming At Cost
Out of Pocket Expenses At Cost
TAX CORE SERVICE SET (INCLUDING PREPARATION, REVIEW, AND DISTRIBUTION OF THE
FOLLOWING:)
Fiscal and excise tax provisions (includes all standard book adjustments
(except those noted in optional services))
Fiscal, state and excise tax returns
Preparation of form 1099 including all year end re-characterizations
Tax basis year end shareholder reporting
Quarterly IRS asset diversification and annual good income tests
Periodic distributions (non-daily dividend excluded)
Quarterly tax exempt asset test and annual foreign security asset test
TAX DISCLOSURE
ROC SOP
Tax Footnote
Applicable Tax 60 day notice information
Review complex corporate action for tax implications
TAX - ADDITIONAL SERVICES
ADDITIONAL SERVICES CURRENTLY USED BY XXXXXX XXXXXXX
Tax Equalization No charge
REIT Analysis (Nonstandard Book Tax Adjustments) No charge
Partnership Holdings (Non-standard Book Tax Adjustments) No charge
Mid Year Income and/or Capital Gains Estimates No charge
Dividend and Distribution Calculations (monthly or more frequent) No charge
ADDITIONAL SERVICES CURRENTLY NOT USED BY XXXXXX XXXXXXX
XXXXX OID Analysis (Non-standard Book Tax Adjustments) No charge
Customized Programming At Cost
Out of Pocket Expenses At Cost
Sched. A - 3
FINANCIAL REPORTING CORE SERVICE SET (INCLUDES PREPARATION, REVIEW, AND
DISTRIBUTION OF THE FOLLOWING:)
Co-ordination, preparation and review of financial statements (annual and
semi-annual), including:
Statement of Investments, Statement of Assets & Liabilities, Statement of
Operations
Statement of Changes in Net Assets, Statement of Cash Flows
Financial Highlights
Notes to Financial Statements
Review of MD&A
Preparation and review of line graphs and performance information
Preparation, review and filing of SEC Form N-SAR
Review of SEC Form N-30d
FINANCIAL REPORTING - ADDITIONAL SERVICES
ADDITIONAL SERVICES CURRENTLY USED BY XXXXXX XXXXXXX
Quarterly Reporting Services No charge
Framemaker Typesetting Package No charge
Additional Production Drafts (greater than 4) No charge
Customized Programming At Cost
Out of Pocket Expenses At Cost
Sched. A - 4
