EXHIBIT 99(g)(iii)
EXECUTION COPY
The Brazil Fund, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
A d m i n i s t r a t i o n A g r e e m e n t
Banco de Boston X.X.
Xxx Xxxxxx Xxxxxx, 000 - Xxxxx
Xxx Xxxxx - XX - Xxxxxx
The Brazil Fund, Inc., a Maryland corporation (the "Fund"), has entered into an
Investment Advisory and Management Agreement (the "Management Agreement") dated
as of March 30, 1988 with Xxxxxxx, Xxxxxxx & Xxxxx, Inc. (the "Manager"),
pursuant to which the Manager is to act as investment adviser to and manager of
the Fund. A copy of the Management Agreement has been previously furnished to
you. Given your authorization by the Commissao de Valores Mobiliarios (the
"CVM"), as required by the Regulations attached as Annex III to the National
Monetary Council Resolution no. 1,289 of March 20, 1987 (the "Regulations"), the
Fund and the Manager, wish to avail themselves of your administrative services.
Accordingly, the Fund and the Manager hereby agree with you as follows for the
duration of this Agreement:
1- The Fund and the Manager hereby appoint you as the Brazilian administrator of
the Fund's Brazilian portfolio. The Fund hereby authorizes the Manager as its
agent to act on the Fund's behalf, and to give you instructions, under this
Agreement.
2- You agree to furnish to the Fund and to the Manager such administrative
services and assistance as are required to be furnished by you pursuant to the
Regulations as the Brazilian administrator of the Fund's Brazilian portfolio and
as the Manager, on the Fund's behalf, shall from time to time reasonably
request, including, without limitation, (i) effecting the registration of the
Fund's foreign capital, (ii) processing, on behalf, of the Fund, remittances of
earnings, capital gains and the return of invested capital, (iii) paying, on
behalf of the Fund, Brazilian income taxes due on its earnings remitted abroad,
(iv) filing the statements required by the Regulations (in a form and manner to
be discussed in advance with the Manager) on the composition and value of the
Fund's portfolio in Brazil and
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its remittances of earnings, capital gains and any partial or total liquidations
of its investments, and (v) handle the bookkeeping for the Fund's portfolio in
Brazil, all as more fully set forth in the Regulations. With the prior approval
of the Manager, third parties may assist you in performing your services under
this Agreement to the extent permitted by the Regulations. You will not be
required to maintain a technical department specialized in the analysis of
stocks and securities for the Fund's portfolio, since the Manager has contracted
for such services to be performed by another party pursuant to a Research and
Advisory Agreement dated March 30, 1988. You shall not be required to furnish
advice or make recommendations regarding the purchase or sale of securities.
3- During the term of this Agreement, one of your directors shall be directly
responsible for the administration of the Fund's Brazilian portfolio as
contemplated by the Regulations (that is, shall be responsible to see to it
that you carry out the administrative functions enumerated in clauses (i)
through (v) of paragraph 2). Your director who shall so act initially is Xxxxxxx
Xxxxxxxx de Moraes. You will give us any and all notices required by the
Regulations in respect of replacement of such director.
4- The Fund agrees to pay you, as full compensation for the services to be
rendered, a fee in Brazilian currency equal to US$ 50,000 per year, payable
quarterly in arrears. The quarterly payments in Brazilian Currency to be paid to
you hereunder shall be calculated according to the following formula:
50,000 Im
F = ------ x Dm x (1 + ---) to the 3/2 power
4 100
Where:
F = fee in Brazilian currency payable quarterly.
Dm = The commercial average buying rate for one US dollar during the quarter for
which the fee is calculated as established by the Central Bank of Brazil,
through the SISSACEN System, transaction PTAX-800 OPTION 5.
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Im = the average rate of inflation for each month in the quarter for which the
fee is calculated, as published in the Brazilian Consumer Price Index.
4.1-The Fund further agrees to reimburse you for all out-of-pocket expenses
(including but not limited to fax, mail, telefone and translation expenses)
incurred in the performance of your functions as Administrator and/or any
actions undertaken pursuant to the Fund's instructions.
5- You agree that you will not make a short sale of any capital stock of the
Fund, or purchase any share of the capital stock of the Fund otherwise than for
investment.
6- You services to the Fund and the Manager are not to be deemed exclusive and
you are free to render similar services to others, except as otherwise provided
herein.
7- Nothing herein shall be construed as constituting you an agent of the Fund or
the Manager.
8- You represent and warrant that you have been authorized by the CVM to engage
in the activities described in Article 23 of Law No. 6,385 of December 7, 1976
and to enter into this Agreement, and that you satisfy the requisite
qualifications under Brazilian laws and regulations to act as Brazilian
administrator of the Fund's portfolio, including having at least the minimum net
worth referred to in Section 5 of the Regulations. You agree to use your best
efforts to maintain such authorization in effect and to maintain the requisite
minimum net worth during the term of this Agreement, including, without
limitation, complying with the Regulations and all other applicable laws and
regulations in performing your obligations under this Agreement.
9- Neither you nor any affiliate of yours shall receive any compensation in
connection with the placement or execution of any transaction for the purchase
or sale of securities or for the investment of funds on behalf of the Fund,
except that you or your affiliates may receive a commission, fee or other
remuneration for acting as broker in connection with the sale of securities to
or by the Fund, if permitted under
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the U.S. Investment Company Act of 1940, as amended (the "Investment Company
Act")
10- You represent and warrant to the Fund and the Manager that there is no
publicly held company whose securities the Fund is prohibited from purchasing
because such company is an affiliated person of yours, or because such
securities represent a co-obligation of yours, or of a company affiliated with
you, within the meaning of Articles 29 (vii) and 32 of the Regulations. You will
advise the Manager immediately if any publicly held company is an affiliated
person of yours, or of a company affiliated with you.
11- The Fund and the Manager agree that you may rely on information reasonably
believed by you to be accurate and reliable. The Fund and the Manager further
agree that, except to the extent otherwise provided under applicable Brazilian
law, neither you nor your officers, directors, employees or agents shall be
subject to any liability for any act or omission 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 in the performance of your
duties or by reason of reckless disregard of your obligations and duties under
this Agreement.
12- This Agreement shall remain in effect for a period of two years from the
date hereof and shall continue in effect thereafter until termination in
accordance with the terms of this Section, provided that such continuance is
specifically approved at least annually by the affirmative vote of the Fund's
Board of Directors. This Agreement may nevertheless be terminated at any time,
without penalty, by the Manager, by the Fund's Board of Directors or by vote of
holders of a majority of the outstanding voting securities of the Fund, upon 60
days written notice delivered or sent by registered mail, postage prepaid, to
you, at your address given above or at any other address of which you shall
have notified us in writing, or by you, but only after written notice to the
Fund, the Manager and the CVM of not less than 60 days (or such longer period as
may be required under the Regulations). This Agreement shall automatically be
terminated in the event of its assignment or of the termination (due to
assignment or otherwise) of the Management Agreement.
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13- This Agreement may not be transferred, assigned, sold of in any manner
hypothecated or pledged by either party hereto. It may be amended by mutual
agreement, but only after authorization of such amendment by the affirmative
vote of the Fund's Board of Directors.
14- Any notice hereunder shall be in writing and shall be delivered in person or
by telex (followed by mailing such notice, air mail postage paid, the day on
which such telex is sent).
- Addressed
If to the Fund, to:
The Brazil Fund Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
(Telex no. 710-591-2267)
If to the Manager, to:
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: President
(Telex no. 710-581-2267)
If to you, to:
Banco de Boston X. X.
Xxx Xxxxxx Xxxxxx, 000 - Xxxxx
00000 - Xxx Xxxxx - XX
Xxxxxx
Attention: Xxxxxxx Xxxxxxxx xx Xxxxxx
(Telex no. 55-11-353395)
or to such other address as to which the recipient shall have informed the other
party.
Notice given as provided above shall be deemed to have been given, if by
personal delivery, on the day of such delivery,
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and if by telex and mail, the date on which such telex and confirmatory letter
are sent.
15- 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 Investment Company Act. Used herein the terms "investment
adviser", "assignment", and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the Investment Company Act.
If you are in agreement with the foregoing, please sign the form of acceptance
on the enclosed counterpart hereof and return the same to us.
Very truly yours,
The Brazil Fund, Inc.
By /s/ Xxxxxx X. XxXxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxx
Title: Vice President
Xxxxxxx, Xxxxxxx & Xxxxx, Inc.
By /s/ Xxxxxx X. XxXxxxxxx
---------------------------------
Name: Xxxxxx X. XxXxxxxxx
Title: Principal
The foregoing agreement is
hereby accepted as of April
30th, 1992.
Banco de Boston S.A.
By /s/ Xxxxxxx xx Xxxxxxxx de Moraes
------------------------------------
Name: Xxxxxxx xx Xxxxxxxx xx Xxxxxx
Title: Vice President
By /s/ Xxxxxxx A. G. Kiss
------------------------------------
Name: Xxxxxxx A. G. Kiss
Title: Director
