AMENDED AND RESTATED SUB-ADVISORY
AGREEMENT
AGREEMENT made as of the 30th day of June, 2009,
by and between XXXXXX XXXXXXX INVESTMENT
MANAGEMENT INC., a Delaware corporation (hereinafter
referred to as "MSIM"), and XXXXXX XXXXXXX
INVESTMENT MANAGEMENT COMPANY, a corporation
organized under the laws of Singapore (hereinafter referred to as
the "Local Manager").
W I T N E S S T E T H:
WHEREAS, Xxxxxx Xxxxxxx China A Share Fund, Inc.
(the "Fund") is a Maryland corporation engaged in business as a
closed-end management investment company and is registered
under the Investment Company Act of 1940, as amended
(hereinafter referred to as the "Investment Company Act"); and
WHEREAS, MSIM and the Local Manager are engaged
principally in rendering investment advisory services and are
registered as investment advisers under the Investment Advisors
Act of 1940, as amended; and
WHEREAS, the Local Manager is the holder of a capital
markets services licence for fund management under the
Securities and Futures Act (Cap. 289) of Singapore or is exempt
from licensing under the Securities and Futures Act (Cap. 289)
of Singapore and is the holder of a financial adviser's license
under the Financial Advisers Act (Cap. 110) of Singapore or is
exempt from licensing under the Financial Advisers Act (Cap.
110) of Singapore; and
WHEREAS, MSIM has been granted QFII status by the
CSRC, and has been allocated a Quota of US$200 million by
SAFE, as from time to time renewed and/or updated, to invest in
A-Shares and other permitted PRC securities; and
WHEREAS, MSIM has entered into an investment
advisory agreement (the "Advisory Agreement") with the Fund
dated September 21, 2006, pursuant to which MSIM provides
management and investment and advisory services to the Fund;
and
WHEREAS, MSIM entered into an investment sub-
advisory agreement with the Local Manager with respect to the
Fund, effective as September 21, 2006 (the "Current Sub-
Advisory Agreement"); and
WHEREAS, as of June 30, 2009, the Current Sub-
Advisory Agreement was amended and restated (this
"Agreement") to incorporate amendments thereto and to make
other ministerial changes designed to facilitate the administration
of this Agreement; and
WHEREAS, the Local Manager is willing to provide
investment advisory services to MSIM in connection with the
Advisory Agreement and the Fund's investments in the PRC on
the terms and conditions hereinafter set forth; and
NOW THEREFORE, in consideration of the premises
and the covenants hereinafter contained, the Local Manager and
MSIM hereby agree as follows:
ARTICLE I
Interpretation
A-SHARES means shares denominated in Renminbi
and issued by companies in the PRC and listed on PRC stock
exchanges or such other shares issued by companies in the PRC
listed on PRC stock exchanges and available for investment by a
QFII;
CSRC means the China Securities Regulatory
Commission;
CSDCC means the China Securities Depositary and
Clearing Corporation Limited;
Investment Regulations means the regulations
governing the establishment and operation of Quotas in the PRC,
including, as at the date of the Agreement:
(a) Provisional Measures for the Administration of
Domestic Securities Investments of QFIIs (promulgated jointly
by the CSRC and the PBOC and effective 1 December 2002);
(b) Tentative Provisions on the Administration of
Foreign Exchange in Domestic Securities Investments by QFIIs
(issued by SAFE and effective on 1 December 2002);
(c) Implementing Rules for Registration and
Settlement of Domestic Securities Investments in China by
QFIIs (issued by CSDCC and effective on 1 December 2002);
(d) Shanghai Stock Exchange Implementing Rules
on Securities Transactions by QFIIs (issued by the Shanghai
Stock Exchange and effective on 1 December 2002);
(e) Shenzhen Stock Exchange Implementing Rules
on Securities Transactions by QFIIs (issued by the Shenzhen
Stock Exchange and effective on 1 December 2002);
and any amendments which may be made from time to
time to any of the above, and to any measures or guidance issued
under any of the above, and to all rules and directives made
under any such law and regulations in force and all other
applicable rules and regulations in force in PRC relevant to
MSIM and/or the Fund;
PBOC means The People's Bank of China;
PRC or China means the People's Republic of China
(excluding the Hong Kong and Macau Special Administrative
Regions and Taiwan);
QFII means a Qualified Foreign Institutional Investor;
Quota means the PRC foreign investor quota granted to
the Adviser pursuant to the Investment Regulations; and
SAFE means the PRC State Administration of Foreign
Exchange, the government agency responsible for matters
relating to foreign exchange administration.
ARTICLE II
Duties of the Local Manager
MSIM hereby employs the Local Manager to act as
investment adviser to MSIM and to furnish the investment
advisory services described below, subject to the broad
supervision of MSIM and the Fund, for the period and on the
terms and conditions set forth in this Agreement. The Local
Manager hereby accepts such employment and agrees during
such period, at its own expense, to render, or arrange for the
rendering of, such services and to assume the obligations herein
set forth for the compensation provided for herein. The Local
Manager and its affiliates shall for all purposes herein be deemed
to be an independent contractor and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent the Fund in any way or otherwise be deemed an agent
of the Fund.
The Local Manager shall have the right to solicit
information from MSIM and shall provide MSIM with such
investment research, advice and supervision as MSIM may from
time to time consider necessary for the proper supervision of the
assets of the Fund; shall furnish continuously an investment
program for the Fund and shall make recommendations from
time to time as to which securities shall be purchased, sold or
exchanged and what portion of the assets of the Fund shall be
held in the various categories of permitted PRC securities,
including but not limited to, A-Shares, convertible bonds, listed
warrants, closed-ended funds and open-ended funds in which the
Fund invests or cash. Investments in A-Shares and other
permitted PRC securities that are governed by the Quota will be
subject to the Investment Regulations and all investments will be
subject to any restrictions of the Articles of Incorporation and
By-Laws of the Fund, as they may be amended and/or restated
from time to time, the provisions of the Investment Company
Act and the statements relating to the Fund's investment
objective, investment restrictions as the same are set forth in the
then-currently effective prospectus, if any, relating to the shares
of the Fund under the Securities Act of 1933, as amended (the
"Prospectus") or such other applicable disclosure document.
The Local Manager shall make recommendations and effect
transactions with respect to securities in which the Fund is
permitted to invest. The Local Manager shall also make
recommendations as to the manner in which voting rights, rights
to consent to corporate action and any other rights pertaining to
the portfolio securities of the Fund shall be exercised.
The Local Manager will not hold money on behalf of
MSIM or the Fund, nor will the Local Manager be the registered
holder of the PRC securities invested by MSIM on behalf of the
Fund or be the custodian of documents or other evidence of title.
ARTICLE III
Allocation of Charges and Expenses
The Local Manager assumes and shall pay for
maintaining the staff and personnel necessary to perform its
obligations under this Agreement and shall at its own expense
provide the office space, equipment and facilities which it is
obligated to provide under Article II hereof and shall pay all
compensation of officers of the Fund and all Directors of the
Fund who are affiliated persons of the Local Manager.
ARTICLE IV
Compensation of the Local Manager
For the services rendered, the facilities furnished and
expenses assumed by the Local Manager, MSIM shall pay to the
Local Manager a fee in an amount to be determined from time to
time by MSIM and the Local Manager, but in no event in excess
of the amount that MSIM actually received for providing
services to the Fund pursuant to the Advisory Agreement. The
fee currently paid by MSIM to the Local Manager is set forth on
Schedule A, as may be amended from time to time.
ARTICLE V
Limitation of Liability of the Local Manager
The Local Manager shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the performance of sub-
advisory services rendered with respect to the Fund, except for
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of
its obligations and duties hereunder. As used in this Article V,
the Local Manager shall include any affiliates of MSIM
performing services for MSIM contemplated hereby and
directors, officers and employees of the Local Manager and such
affiliates.
ARTICLE VI
Activities of the Local Manager
The services of the Local Manager to MSIM are not to
be deemed to be exclusive, the Local Manager and any person
controlled by or under common control with the Local Manager
(for purposes of this Article VI referred to as "affiliates") being
free to render services to others. It is understood that Directors,
officers, employees and shareholders of the Fund are or may
become interested in the Local Manager and its affiliates, as
directors, officers, employees and shareholders or otherwise and
that directors, officers, employees and shareholders of the Local
Manager and its affiliates are or may become similarly interested
in the Fund, and that the Local Manager and directors, officers,
employees, partners and shareholders of its affiliates may
become interested in the Fund as shareholders or otherwise.
ARTICLE VII
Compliance with Applicable Laws and Regulations
The Local Manager shall obtain and at all times maintain
and comply with the terms of all relevant authorizations,
licenses, consents, approvals and registrations and comply with
all relevant laws and regulations, necessary for the purpose of
performing any of its duties and obligations under this
Agreement. The Local Manager shall inform MSIM as soon as
possible if at any time the Local Manager becomes unable to
comply with the terms of or maintain any such authorizations,
licenses, consents, approvals or registrations.
ARTICLE VIII
Duration and Termination of this Agreement
This Agreement shall become effective with respect to
the Fund for an initial period of up to two years from the
effective date set forth opposite the Fund's name on Schedule A
hereto, and thereafter, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the
Fund or by the vote of a majority of the outstanding voting
securities of the Fund and (ii) a majority of those Directors who
are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of
voting on such approval.
This Agreement may be terminated at any time, without
the payment of any penalty, by MSIM, by the Board of Directors
of the Fund or by vote of a majority of the outstanding voting
securities of the Fund, or by the Local Manager, on sixty days'
written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment or in the
event of the termination of the Advisory Agreement. Any
termination shall be without prejudice to the completion of
transactions already initiated.
ARTICLE IX
Amendments to this Agreement
This Agreement may be amended by the parties only if
such amendment is specifically approved by (i) the Directors of
the Fund or by the vote of a majority of outstanding voting
securities of the Fund and (ii) a majority of those Directors who
are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of
voting on such approval.
ARTICLE X
Definitions of Certain Terms
The terms "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person" and "interested
person" used in this Agreement shall have the respective
meanings specified in the Investment Company Act and the rules
and regulations thereunder, subject, however, to such
exemptions as may be granted by the Securities and Exchange
Commission under the Investment Company Act.
ARTICLE XI
Governing Law
This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions
of the Investment Company Act. To the extent that the
applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the
Investment Company Act, the latter shall control.
IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the date first above
written
XXXXXX XXXXXXX INVESTMENT MANAGEMENT INC.
By: /s/ Xxxxx Xxxxxx
Name: Xxxxx Xxxxxx
Title: President
XXXXXX XXXXXXX INVESTMENT MANAGEMENT
COMPANY
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Managing Director
SCHEDULE A
As of December 10, 2009
Name of Fund
Xxxxxx Xxxxxxx China A Share Fund, Inc.
Effective Date of Agreement and any amendments entered into
prior to June 30, 2009
Effective Date: 09/21/06
Fee
Effective January 1, 2009, MSIM will pay the Local
Manager on a monthly basis an aggregate amount equal to
50% of the net advisory fees MSIM receives from the Fund
during such period, after taking into account any fee waivers.
7
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Sch. A-1
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