SUB-ADVISORY AGREEMENT
AGREEMENT made this 1st day of January, 1997 by and between
Santander Management Inc., a Bahamas corporation, (hereinafter
called the "Investment Adviser"), Gestion Santander Mexico, S.A.
de C.V., a Mexican corporation (hereinafter called the "Mexican
Adviser") and The Emerging Mexico Fund, Inc., a Maryland
corporation (the "Fund");
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as a closed-end
non-diversified management investment company and is
registered as such under the Investment Company Act of
1940, as amended (the "1940 Act");and
WHEREAS, the Investment Adviser and the Mexican Adviser are
engaged in rendering investment advisory services and are registered
as
investment advisers under the Investment Advisers Act of 1940; and
WHEREAS, the Fund and the Investment Adviser have entered
into an Investment Advisory Agreement (the "Investment Advisory
Agreement") pursuant to which the Investment Adviser provides
investment advice to the Fund and is responsible for the
portfolio management of the Fund; and
WHEREAS, the Mexican Adviser is willing to provide investment
advisory services to the Fund on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained the Fund, the Investment
Adviser and the Mexican Adviser agree as follows:
1. Duties of the Mexican Adviser. The Mexican
Adviser hereby undertakes and agrees, upon the terms and conditions
herein set forth, (i) to make investment decisions for the Fund,
to prepare and make available to the Fund economic research,
securities analysis and statistical data in connection therewith,
and to supervise the acquisition and disposition of securities by
the Fund, including the selection of brokers or dealers to carry
out the transactions, all in accordance with the Fund's
investment objective, policies and restrictions as stated in the
Fund's prospectus, dated October 3, 1995 (the "Prospectus") and
in accordance with guidelines and directions from the Fund's Board
of Directors; and (ii)to furnish at the Mexican Adviser's expense
clerical services related to research, statistical and investment
work.
2. Expenses of the Mexican Adviser. The Mexican
Adviser will bear all expenses necessary to perform its obligations
under this Agreement. The Fund and the Investment Adviser assume
and shall pay or cause to be paid certain other expenses of the
Fund as set forth in the Investment Advisory Agreement.
3. Compensation of the Mexican Adviser. The
Investment Adviser agrees to pay in United States dollars to the
Mexican Adviser, as full compensation for the services to be
rendered and expenses
to be borne by the Mexican Adviser hereunder, a monthly fee at
the annual rate of .15% of the Fund's average weekly net assets.
For purposes of computing the monthly fee, the value of the net
assets of the Fund shall be determined as of the close of business
on the business day of each week
designated by the Fund's board of directors for each week where the
last business day of the week falls within that month and the
aggregate value of such assets shall be divided by the number of
such weeks. The fee for the period from the end of the last
month ending prior to termination of this
Agreement, for whatever reason, to the date of termination shall be
based on the value of the net assets of the Fund determined as of
the close of business on the date of termination, and the fee for
such period shall be prorated according to the proportion which
such period bears to a full monthly period. Each payment of a
monthly fee to the Mexican Adviser shall be made within the ten
days next following the day as of which such
payment is so computed. The value of the net assets of the Fund
shall be determined in accordance with the Prospectus.
4. Limitation of Liability of the Mexican Adviser;
Indemnification. (a) The Mexican Adviser may rely on information
reasonably believed by it to be accurate and reliable. Neither
the Mexican Adviser nor its officers, directors, employees,
agents or controlling persons as defined in the 1940 Act shall
be subject to any liability for any act or omission, error of
judgment or mistake of law, or for any loss suffered by
the Fund, in the course of, connected with or arising out
of any services to be rendered hereunder, except by reason of
willful misfeasance, bad faith or gross negligence on the part
of the Mexican Adviser in the performance of
its duties or by reason of reckless disregard on the part of
the Mexican Adviser of its obligations and duties under this
Agreement. Any person, even though also employed by the Mexican
Adviser, who may be or become an employee of the Fund and paid
by the Fund shall be deemed, when acting within the scope of
his employment by the Fund, to be acting in such employment
solely for the Fund and not as an employee or agent of the
Mexican Adviser.
(a) The Fund indemnifies the Mexican
Adviser to the fullest extent permitted by law against any and all
judgments, fines, amounts paid in settlement and reasonable
expenses,including attorneys' fees, incurred by the Mexican
Adviser as the result of
any action, suit or proceeding against the Mexican Adviser in its
capacity as Mexican Adviser of the Fund in connection with the
matters to which this Agreement relates except to the extent
that such action, suit or proceeding results from the willful
misfeasance, bad faith or gross negligence on the part of the
Mexican Adviser or its reckless disregard of its obligations and
duties under this Agreement.
5. Activities of the Mexican Adviser. Nothing herein
shall be construed as prohibiting the Mexican Adviser from providing
investment advisory services to, or entering into investment
advisory
agreements with, other clients (including other registered
investment companies), including clients that may invest in
securities of Mexican issuers.
6. Duration and Termination of this Agreement.
This Agreement shall remain in effect for a period of two years
from the date hereof, and shall continue in effect thereafter, but
only so long as such continuance is specifically approved at least
annually by the affirmative vote of (i) a majority of the members
of the Fund's Board of Directors who are not interested persons of
the Fund or of the Mexican Adviser or of any entity regularly
furnishing investment advisory services with respect to the
Fund pursuant to an agreement with the Mexican Adviser, cast
in person at a meeting called for the purpose of voting on
such approval, and (ii) a majority of the Fund's Board of Directors
or the holders of a majority of the outstanding voting securities
of the Fund.
This Agreement may nevertheless be terminated at any
time without penalty, on 60 days' written notice, by the Fund's Board
of Directors, by vote of the holders of a majority of the
outstanding voting
securities of the Fund, by the Investment Adviser or by the Mexican
Adviser. Any such notice shall be deemed given when received by the
addressee. This Agreement shall automatically be terminated in the
event of its assignment, provided that an assignment to a corporate
successor to all or substantially all of the Mexican Adviser's
business or to a wholly-owned subsidiary of such corporate
successor that does not result in a change of actual control or
management of the Mexican Adviser's business shall not be deemed
to be an assignment for the purposes of this Agreement.
7. Amendments of this Agreement. This Agreement
may not be transferred, assigned, sold or in any manner hypothecated
or pledged by either party hereto other than as contemplated by
Section 6. It may be amended by mutual agreement, but only after
authorization of such amendment by the affirmative vote of
(i) the holders of a majority of the outstanding voting securities
of the Fund, and (ii) a majority of the
members of the Fund's Board of Directors who are not
interested persons of the Fund or of the Mexican Adviser or of any
entity regularly furnishing investment advisory services with
respect to the Fund pursuant to any agreement with the Mexican
Adviser, cast in person at a meeting called for
the purpose of voting on such approval.
8. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of New York,
provided,however, that nothing herein shall be construed as being
inconsistent with the 1940 Act. As used herein, the terms "
interested person", "assignment" and "vote of a majority of the
outstanding voting securities", when used in this Agreement, shall
have the respective meanings specified in the 1940
Act and the Rules and Regulations thereunder, subject, however, to
such exemptions as may be granted by the Securities and Exchange
Commission under said Act.
9. Counterparts. This Agreement may be executed
by the parties hereto in counterparts and if executed in more than
one counterpart the separate instruments shall constitute one
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SANTANDER
MANAGEMENT INC.
By: /s/ Xxxxxxx Xxxxx
Name:
Title:
GESTION SANTANDER
MEXICO, S.A. de C.V.
By: /s/ Xxxxx Xxxxxxx de A.
Name:
Title:
THE EMERGING MEXICO
FUND, INC.
By: /s/ Xxxxxxx de las Xxxxx
Name:
Title:
