EXHIBIT (c)(3)
SUB-ADVISORY AGREEMENT
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AGREEMENT made as of the 25th day of February, 1994, as amended as of
the 30th day of April, 1998, by and among The Southern Africa Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland,
Alliance Capital Management L.P., a Delaware limited partnership (the
"Investment Manager"), and Sanlam Asset Management (Gibraltar) Limited, a
corporation organized under the laws of Gibraltar (the "Sub-Adviser").
WITNESSETH:
WHEREAS, the Fund has entered into an Investment Management Agreement
(the "Management Agreement") with the Investment Manager pursuant to which the
Fund has engaged the Investment Manager to manage the investment and
reinvestment of the Fund's assets (the "portfolio assets"); and
WHEREAS, as permitted under the Management Agreement, the Fund desires
the Investment Manager to utilize the services of the Sub-Adviser as sub-adviser
with respect to certain portfolio assets; and
WHEREAS, the Sub-Adviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
2. The Sub-Adviser shall furnish to the Fund and the
Investment Manager as the Fund or the Investment Manager shall reasonably
require from time to time (i) information, investment recommendations, advice
and assistance with respect to the Fund's investment in both new or outstanding,
listed or unlisted, securities of Republic of South Africa issuers within the
meaning of the Fund's prospectuses dated February 25, 1994 ("South African
issuers"), including data, analyses and other information regarding particular
issuers and securities and (ii) information concerning the political situation
and developments, and economic conditions, statistics and forecasts in and for
South Africa. Information to be furnished by the Sub-Adviser to the Fund and
Investment Manager shall also include information obtained through public or
private sources concerning the integrity and standing of officials and of
particular issuers of both new and outstanding securities, their officers and
directors. The Sub-Adviser's activities under this Agreement will at all times
be subject to the supervision and direction of the Investment Manager.
2. In consideration of the services to be performed by the Sub-
Adviser hereunder, the Sub-Adviser shall receive from the Fund a fee, calculated
and paid
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quarterly, at an annualized rate of .20% (.30% for periods on and after the date
of approval by the Fund's stockholders of the amendment of this Agreement to
such rate) of the greater of (i) the Fund's average weekly net assets invested
in securities of South African issuers or (ii) 90% of the Fund's average weekly
net assets. For purposes of the calculation of such fee, average weekly net
assets shall be determined on the basis of the average net assets of the Fund
for each weekly period (ending on Friday) ending during the quarter. The net
assets for each weekly period are determined by averaging the net assets on the
Friday of such weekly period with the net assets on the Friday of the
immediately preceding weekly period. When a Friday is not a business day for the
Fund, then the calculation will be based on the Fund's net assets on the
business day immediately preceding such Friday. Such fee shall be payable in
arrears on the last day of each calendar quarter for services performed
hereunder during such quarter. For purposes of this Agreement, a business day
shall be a day on which stock exchanges in the United States are open for
business. If this Agreement or an amendment thereto with respect to the
calculation of the fee payable to the Sub-Adviser hereunder becomes effective
after the beginning of a
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quarter, or this Agreement terminates prior to the end of a quarter, the fee for
the quarter at the proper rate in effect for any relevant portion thereof shall
be pro-rated according to the proportion which such portions of the quarter bear
to the full quarter.
4. The Sub-Adviser will bear all of its expenses in connection with
the performance of its services hereunder and will from time to time at its sole
expense employ or associate with itself such persons as it believes to be
particularly fitted to assist it in the execution of its duties. The Investment
Manager will be responsible for all expenses which it has agreed to bear
pursuant to the Management Agreement.
4. The Sub-Adviser is, and at all times during the term of this
Agreement shall be, duly registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act") and not prohibited by the
Advisers Act or the Investment Company Act of 1940, as amended (the "Investment
Company Act") or the rules and regulations under such Acts, from acting as Sub-
Adviser for the Fund as contemplated by the Fund's prospectuses as referred to
above and this Agreement. The Sub-Adviser agrees that it will be in full
compliance with any provisions of the Investment
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Company Act and the Advisers Act, applicable to it and its directors, officers
or employees, and to interested persons with respect to it.
5. For a period of five years following the initial effective date of
this Agreement, neither the Sub-Adviser, nor any affiliate under the control of
the Sub-Adviser, shall, without the prior written consent of the Investment
Manager, provide any services of the nature described in Section 1 hereof to any
investment company which is authorized to invest 65% or more of its assets in
South African securities, the shares of which are listed on any recognized stock
exchange in the United States or any other country outside South Africa, other
than the Fund. Except as provided in the preceding sentence, and except to the
extent necessary to perform its obligations hereunder, nothing shall be deemed
to limit or restrict the Sub-Adviser's right or the right of any of the Sub-
Adviser's employees, officers or directors, to engage in any other business or
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature and to render services of
any kind to any other trust, corporation, firm, individual or association.
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6. Nothing herein shall be construed as constituting the Sub-
Adviser an agent of the Investment Manager or the Fund or requiring the Sub-
Adviser to take or refrain from taking any action that would cause the
Sub-Adviser to be in violation of the laws of South Africa or any other law
applicable to the Sub-Adviser in connection with its duties hereunder.
6. The Sub-Adviser shall be entitled to rely on information
reasonably believed by it to be accurate and reliable. It is agreed that, except
as may otherwise be provided by the Investment Company Act, neither the
Sub-Adviser nor its officers, directors, employees or agents shall be subject to
any liability for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Adviser against any liability to the Fund or the
Investment Manager to which it would otherwise be subject by reason of
fraudulent activities, willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard of
its obligations and duties hereunder.
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7. This Agreement shall continue in effect until January 31, 1999
and thereafter for successive twelve month periods (computed from each February
1) provided that 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 parties to the Agreement or interested persons of any such
party (other than as Directors of the Fund), cast in person at a meeting called
for the purpose of voting on such approval and (ii) the Fund's Board of
Directors or the holders of a majority of the outstanding voting securities of
the Fund, and provided further, however, that if the continuation of this
Agreement is not approved, the Sub-Adviser may continue to render the services
described herein in the manner and to the extent permitted by the Act and the
rules and regulations thereunder. This Agreement may nevertheless be terminated
at any time, without penalty, by the Fund's Board of Directors or by vote of
holders of a majority of the outstanding voting securities of the Fund, upon
sixty days' written notice delivered or sent by registered mail, postage
prepaid, to the Sub-Adviser, at its address for purposes of Section 10, or by
the Sub-Adviser upon sixty days' written notice to the Investment Manager or the
Fund at the address
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for each of them for purposes of Section 10. Any such notice shall be deemed
given when received by the addressee.
8. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by any party hereto, and this Agreement shall
terminate automatically in the event of any such transfer, assignment, sale,
hypothecation or pledge by you. The term "transfer", "assignment" and "sale" as
used in this paragraph shall have the meanings ascribed hereto by governing law
and any interpretation thereof contained in rules or regulations promulgated by
the Securities and Exchange Commission thereunder.
8. This Agreement and any disputes arising hereunder shall be governed
by the laws of the State of New York without any effect being given to New
York's choice of law rules, provided, however, that nothing herein shall be
construed as being inconsistent with the Investment Company Act. As used herein
the terms "interested person", "assignment", and "vote of the holders of a
majority of the outstanding voting securities" shall have the meanings set forth
in the Investment Company Act. The parties hereto hereby consent to the
jurisdiction of the state and federal courts of New York and provide that the
exclusive forum for
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any such disputes shall be in the Supreme Court of the State of New York, New
York County, or the United States District Court for the Southern District of
New York. Any service of process and legal papers, including a summons and
complaint and subpoenas, shall be deemed to be good and effective service on any
party hereto by both facsimile transmission of a true copy thereof to such party
at the address for the party set forth on Attachment A hereto or to any other
address of which such party shall have notified the other parties by the
foregoing procedure and by mailing a copy thereof to such address.
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IN WITNESS WHEREOF, this Agreement has been entered into the day
and year first above written.
The Southern Africa Fund, Inc.
By /s/ Xxxxxx X. Xxxxxx, Xx.
________________________________________
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Secretary
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its General Partner
By /s/ Xxxx X. Xxxxxx
________________________________________
Name: Xxxx X. Xxxxxx
Title: President and
Chief Operating Officer
Sanlam Asset Management
(Gibraltar) Limited
By /s/ Xxxxxx Xxxx
________________________________________
Name: Xxxxxx Xxxx
Title: Director
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The Fund, the Investment Manager and the Sub-Adviser hereby
agree to the amendment of the foregoing Agreement as set forth above effective
as of the 30th day of April, 1998.
The Southern Africa Fund, Inc.
By /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Secretary
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its General Partner
By /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: President and
Chief Operating Officer
Sanlam Asset Management
(Gibraltar) Limited
By /s/ Xxxxxx Xxxx
-------------------------------------
Name: Xxxxxx Xxxx
Title: Director
00
Xxx Xxxxxxxx Xxxxxx Fund, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Alliance Capital Management L.P.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
Sanlam Asset Management (Gibraltar) Limited
Xxxxx 000
Xxxxxxx Xxxxx
Xxxxxx Xxx
Xxxxxxxxx
(350) 42500
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