FUND ADMINISTRATION AGREEMENT BETWEEN
XXXXXXXXX CHINA WORLD FUND
AND
FRANKLIN XXXXXXXXX SERVICES, LLC
AGREEMENT dated as of December 3, 2002, between Xxxxxxxxx China World Fund
(the "Fund"), an investment company registered under the Investment Company Act
of 1940 ("1940 Act"), and Franklin Xxxxxxxxx Services, LLC ("FTS" or
"Administrator").
In consideration of the mutual promises herein made, the parties hereby
agree as follows:
(1) The Administrator agrees, during the life of this Agreement,
to provide the following services to the Fund:
(a) providing office space, telephone, office equipment
and supplies for the Fund;
(b) providing trading desk facilities for the Fund,
unless these facilities are provided by the Fund's investment adviser;
(c) authorizing expenditures and approving bills for
payment on behalf of the Fund;
(d) supervising preparation of periodic reports to
shareholders, notices of dividends, capital gains distributions and tax credits;
and attending to routine correspondence and other communications with individual
shareholders when asked to do so by the Fund's shareholder servicing agent or
other agents of the Fund;
(e) coordinating the daily pricing of the Fund's
investment portfolio, including collecting quotations from pricing services
engaged by the Fund; providing fund accounting services, including preparing and
supervising publication of daily net asset value quotations, periodic earnings
reports and other financial data; and coordinating trade settlements;
(f) monitoring relationships with organizations serving
the Fund, including custodians, transfer agents, public accounting firms, law
firms, printers and other third party service providers;
(g) supervising compliance by the Fund with
recordkeeping requirements under the federal securities laws, including the 1940
Act and the rules and regulations thereunder, and under other applicable state
and federal laws; and maintaining books and records for the Fund (other than
those maintained by the custodian and transfer agent);
(h) preparing and filing of tax reports including the
Fund's income tax returns, and monitoring the Fund's compliance with subchapter
M of the Internal Revenue Code, as amended, and other applicable tax laws and
regulations;
(i) monitoring the Fund's compliance with: 1940 Act and
other federal securities laws, and rules and regulations thereunder; state and
foreign laws and regulations applicable to the operation of investment
companies; the Fund's investment objectives, policies and restrictions; and the
Code of Ethics and other policies adopted by the Fund's Board of Trustees
("Board") or by the Fund's investment adviser and applicable to the Fund;
(j) providing executive, clerical and secretarial
personnel needed to carry out the above responsibilities;
(k) preparing and filing regulatory reports, including
without limitation Forms N-1A and N-SAR, proxy statements, information
statements and U.S. and foreign ownership reports; and
(l) providing support services incidental to carrying
out these duties.
Nothing in this Agreement shall obligate the Fund to pay any compensation to the
officers of the Fund. Nothing in this Agreement shall obligate FTS to pay for
the services of third parties, including attorneys, auditors, printers, pricing
services or others, engaged directly by the Fund to perform services on behalf
of the Fund.
(2) The Fund agrees, during the life of this Agreement, to pay
to FTS as compensation for the foregoing a monthly fee equal on an annual basis
to 0.20% of the Fund's average daily net assets, payable at the end of each
calendar month.
From time to time, FTS may waive all or a portion of its fees provided for
hereunder and such waiver shall be treated as a reduction in the purchase price
of its services. FTS shall be contractually bound hereunder by the terms of any
publicly announced waiver of its fee, or any limitation of each affected Fund's
expenses, as if such waiver or limitation were fully set forth herein.
(3) This Agreement shall remain in full force and effect through
for one year after its execution and thereafter from year to year to the extent
continuance is approved annually by the Board of the Fund.
(4) This Agreement may be terminated by the Fund at any time on
sixty (60) days' written notice without payment of penalty, provided that such
termination by the Fund shall be directed or approved by the vote of a majority
of the Board of the Fund in office at the time or by the vote of a majority of
the outstanding voting securities of the Fund (as defined by the 1940 Act); and
shall automatically and immediately terminate in the event of its assignment (as
defined by the 1940 Act).
(5) In the absence of willful misfeasance, bad faith or gross
negligence on the part of FTS, or of reckless disregard of its duties and
obligations hereunder, FTS shall not be subject to liability for any act or
omission in the course of, or connected with, rendering services hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers.
FRANKLIN XXXXXXXXX SERVICES, LLC
By:/s/XXXXX X. XXXXXXX
--------------------------------------------------
Xxxxx X. Xxxxxxx
President
XXXXXXXXX CHINA WORLD FUND
By: /s/ XXXXX X. XXXX
--------------------------------------------------
Xxxxx X. Xxxx
Vice President and Assistant Secretary
