EXHIBIT G
INVESTMENT MANAGEMENT AGREEMENT
SALOMON BROTHERS EMERGING MARKETS DEBT FUND INC.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
November __, 2003
Salomon Brothers Asset Management Inc
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Sirs:
This will confirm the agreement between the undersigned (the "Fund")
and you (the "Investment Manager") as follows:
1. The Fund is a newly organized, closed-end, non-diversified
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"). The Fund proposes to engage in the business
of investing and reinvesting its assets in the manner and in accordance with the
investment objective and limitations specified in the Fund's Articles of
Incorporation, as amended (the "Articles") and the currently effective
prospectus, including the documents incorporated by reference therein (the
"Prospectus"), relating to the Fund included in the Fund's Registration
Statement, as amended from time to time (the "Registration Statement"), filed by
the Fund under the 1940 Act, and the Securities Act of 1933, as amended. Copies
of the documents referred to in the preceding sentence have been furnished to
the Investment Manager. Any amendments to these documents shall be furnished to
the Investment Manager.
2. The Fund employs the Investment Manager to (a) make investment
strategy decisions for the Fund, (b) manage the investing and reinvesting of the
Fund's assets as specified in Paragraph 1, (c) place purchase and sale orders on
behalf of the Fund, (d) provide continuous supervision of the Fund's investment
portfolio, (e) provide or procure the provision of research and statistical data
in relation to investing and other matters within the scope of the investment
objectives and limitations of the Fund and (f) provide the following services
for the Fund: (A) compliance with the rules and regulations of the Securities
and Exchange Commission, including record keeping, reporting requirements and
preparation of registration statements and proxies to the extent such records,
reports and documents are not maintained or furnished by the Fund's transfer
agent, custodian, administrator or other agents employed by the Fund; (B)
supervision of Fund operations, including coordination of functions of the
transfer agent, custodian, accountants, counsel and other parties performing
services or operational functions for the Fund; (C) administrative and clerical
services, including accounting services, development of new shareholder services
and maintenance of books and records to the extent such services are not
otherwise provided by the Fund's transfer agent, custodian, administrator or
other agents employed by the Fund; and (D) services to Fund shareholders,
including responding to shareholder inquiries and maintaining a flow of
information to shareholders. The Investment
2
Manager shall have the sole ultimate discretion over investment decisions for
the Fund. At the Investment Manager's own expense and subject to its
supervision, the Investment Manager may delegate the performance of all or a
part of its services under this agreement to others.
3. (a) The Investment Manager shall, at its expense, (i) provide the
Fund with office space, office facilities and personnel reasonably necessary for
performance of the services to be provided by the Investment Manager pursuant to
this Agreement, (ii) provide the Fund with persons satisfactory to the Fund's
Board of Directors to serve as officers and employees of the Fund and (iii)
provide the office space, facilities, equipment and personnel necessary to
perform the following services for the Fund: (A) review purchases and sales of
portfolio instruments and review the Fund's portfolio to assess compliance with
the Fund's stated investment objective and limitations and compliance with the
1940 Act and other applicable laws and regulations; (B) record keeping,
reporting and maintaining registration statements and proxy statements to the
extent such records, reports and documents are not maintained or furnished by
the Fund's transfer agent, custodian, administrative and accounting services
agent, or other agents employed by the Fund; (C) supervision of Fund operations,
including coordination of functions of transfer agent, custodian, administrative
and accounting services agent, accountants, counsel and other parties performing
services or operational functions for the Fund; and (D) certain administrative
and clerical services not otherwise provided by the Fund's transfer agent,
custodian, administrative and accounting services agent, or other agents
employed by the Fund.
(b) Except as provided in subparagraph (a), the Fund shall be
responsible for all of the Fund's expenses and liabilities, including
organizational expenses; taxes; interest; fees (including fees paid to its
directors who are not affiliated with the Investment Manager or any of its
affiliates); fees payable to the Securities and Exchange Commission; state
securities qualification fees; costs of preparing and printing prospectuses for
regulatory purposes and for distribution to existing shareholders; advisory and
administration fees; charges of the custodian, transfer agent, administrative
and accounting services agent and any other agent employed by the Fund;
insurance premiums; auditing and legal expenses; costs of shareholders' reports
and shareholders' meetings; charges and expenses of any entity used for pricing
the Fund's portfolio securities and calculating the net asset value of the
Fund's shares; any extraordinary expenses; brokerage fees and commissions, if
any, in connection with the purchase or sale of portfolio securities; and
payments to the Fund's distributor for activities intended to result in the sale
of Fund shares.
4. As manager of the Fund's assets, the Investment Manager shall make
investments for the Fund's account in accordance with the investment objective
and limitations set forth in the Articles, the Prospectus, the 1940 Act, the
provisions of the Internal Revenue Code of 1986, as amended, relating to
regulated investment companies, applicable banking laws and regulations, and
policy decisions adopted by the Fund's Board of Directors from time to time. The
Investment Manager shall advise the Fund's officers and Board of Directors, at
such times as the Fund's Board of Directors may specify, of investments made for
the Fund's account and shall, when requested by the Fund's officers or Board of
Directors, supply the reasons for making such investments.
5. The Investment Manager is authorized on behalf of the Fund, from
time to time when deemed to be in the best interests of the Fund and to the
extent permitted by
3
applicable law, to purchase and/or sell securities in which the Investment
Manager or any of its affiliates underwrites, deals in and/or makes a market
and/or may perform or seek to perform investment banking services for issuers of
such securities. The Investment Manager is further authorized, to the extent
permitted by applicable law, to select brokers for the execution of trades for
the Fund, which broker may be an affiliate of the Investment Manager, provided
that the affiliated broker's charge for the transaction is reasonable and fair
compared to the usual and customary levels charged by other brokers in
connection with comparable transactions involving similar securities.
6. In consideration of the Investment Manager's undertaking to render
the services described in this agreement, the Fund agrees that the Investment
Manager shall not be liable under this agreement for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
performance of this agreement, provided that nothing in this agreement shall be
deemed to protect or purport to protect the Investment Manager against any
liability to the Fund or its stockholders to which the Investment Manager would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties under this agreement or by reason of
its reckless disregard of its obligations and duties hereunder ("disabling
conduct"). The Fund will indemnify the Investment Manager against, and hold it
harmless from, any and all losses, claims, damages, liabilities or expenses,
including reasonable counsel fees and expenses and any amounts paid in
satisfaction of judgments, in compromise or as fines or penalties, not resulting
from disabling conduct by the Investment Manager. Indemnification shall be made
only following: (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the Investment Manager was not
liable by reason of disabling conduct, or (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
Investment Manager was not liable by reason of disabling conduct by (a) the vote
of a majority of a quorum of directors of the Fund who are neither "interested
persons" of the Fund nor parties to the proceeding ("disinterested non-party
directors"), or (b) an independent legal counsel in a written opinion. The
Investment Manager shall be entitled to advances from the Fund for payment of
the reasonable expenses incurred by it in connection with the matter as to which
it is seeking indemnification in the manner and to the fullest extent
permissible under law. The Investment Manager shall provide to the Fund a
written affirmation of its good faith belief that the standard of conduct
necessary for indemnification by the Fund has been met and a written undertaking
to repay any such advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the following
additional conditions shall be met: (a) the Investment Manager shall provide
security in form and amount acceptable to the Fund for its undertaking; (b) the
Fund is insured against losses arising by reason of the advance; or (c) a
majority of a quorum of disinterested non-party directors, or independent legal
counsel, in a written opinion, shall have determined, based on a review of facts
readily available to the Fund at the time the advance is proposed to be made,
that there is reason to believe that the Investment Manager will ultimately be
found to be entitled to indemnification. For purposes of this paragraph 6 only,
the term "Investment Manager" shall be deemed to include affiliates of the
Investment Manager to whom the Investment Manager has delegated the exercise of
all or any of its powers, discretion and duties under this agreement.
7. In consideration of the services to be rendered by the Investment
Manager under this agreement, the Fund shall pay the Investment Manager a
monthly fee on the first
4
business day of each month at an annual rate of 0.85% of the average daily value
(as determined on the days and at the time set forth in the Prospectus for
determining net asset value per share) of the Fund's net assets plus (i) the
proceeds of any outstanding borrowings used for leverage and (ii) any proceeds
from the issuance of preferred stock, minus the sum of (x) accrued liabilities
of the Fund, (y) any accrued and unpaid interest on outstanding borrowings and
(z) accumulated dividends on shares of preferred stock, all during the preceding
month. If the fee payable to the Investment Manager pursuant to this paragraph 7
begins to accrue before the end of any month or if this agreement terminates
before the end of any month, the fee for the period from such date to the end of
such month or from the beginning of such month to the date of termination, as
the case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs. For
purposes of calculating each such monthly fee, the value of the Fund's net
assets shall be computed in the manner specified in the Prospectus and the
Articles for the computation of the value of the Fund's net assets in connection
with the determination of the net asset value of shares of the Fund's capital
stock.
8. This agreement shall continue in effect until two years from the
date hereof and thereafter for successive annual periods, provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of the Fund's outstanding voting securities (as defined in the 0000
Xxx) or by the Fund's Board of Directors and (b) by the vote, cast in person at
a meeting called for the purpose, of a majority of the Fund's directors who are
not parties to this agreement or "interested persons" (as defined in the 0000
Xxx) of any such party. This agreement may be terminated at any time, without
the payment of any penalty, by a vote of a majority of the Fund's outstanding
voting securities (as defined in the 0000 Xxx) or by a vote of a majority of the
Fund's entire Board of Directors on 60 days' written notice to the Investment
Manager or by the Investment Manager on 60 days' written notice to the Fund.
This agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act). The respective agreements, covenants, indemnities and
other statements set forth in Section 6 hereof shall remain in full force and
effect regardless of any termination or cancellation of this agreement. All
property of the Fund shall be returned to the Fund as soon as reasonably
practicable after the termination of this agreement.
9. Upon expiration or earlier termination of this agreement, the Fund
shall, if reference to "Salomon Brothers" is made in the corporate name of the
Fund or in the name of the Fund and if the Investment Manager requests in
writing, as promptly as practicable change its corporate name and the name of
the Fund so as to eliminate all reference to "Salomon Brothers", and thereafter
the Fund and the Fund shall cease transacting business in any corporate name
using the words "Salomon Brothers" or any other reference to the Investment
Manager or "Salomon Brothers". The foregoing rights of the Investment Manager
and obligations of the Fund shall not deprive the Investment Manager, or any
affiliate thereof which has "Salomon Brothers" in its name, of, but shall be in
addition to, any other rights or remedies to which the Investment Manager and
any such affiliate may be entitled in law or equity by reason of any breach of
this agreement by the Fund, and the failure or omission of the Investment
Manager to request a change of the Fund's or the Fund's name or a cessation of
the use of the name of "Salomon Brothers" as described in this paragraph 9 shall
not under any circumstances be deemed a waiver of the right to require such
change or cessation at any time thereafter for the same or any subsequent
breach.
5
10. Except to the extent necessary to perform the Investment Manager's
obligations under this agreement, nothing herein shall be deemed to limit or
restrict the right of the Investment Manager, or any affiliate of the Investment
Manager, or any employee of the Investment Manager, to engage in any other
business or to devote time and attention to the management or other aspects of
any other business, whether of a similar or dissimilar nature, or to render
services of any kind to any other corporation, firm, individual or association.
11. This agreement shall be governed by the laws of the State of New
York.
6
If the foregoing correctly sets forth the agreement between the Fund
and the Investment Manager, please so indicate by signing and returning to the
Fund the enclosed copy hereof.
Very truly yours,
SALOMON BROTHERS EMERGING MARKETS
DEBT FUND INC.
By:
-------------------------------------
Name:
Title:
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:
--------------------------------------
Name:
Title:
