INVESTMENT ADVISORY, MANAGEMENT AND
ADMINISTRATION AGREEMENT
AGREEMENT, dated and effective as of December 31, 1997 between THE
ARGENTINA FUND, INC., a Maryland corporation (herein referred to as the "Fund"),
and XXXXXXX XXXXXX INVESTMENTS, INC., a Delaware corporation (herein referred to
as the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed by
the parties as follows:
1. The Manager 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 research 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 objectives and policies and in
accordance with guidelines and directions from the Fund's Board of Directors;
(ii) to assist the Fund as it may reasonably request in the conduct of the
Fund's business, subject to the direction and control of the Fund's Board of
Directors; (iii) to maintain or cause to be maintained for the Fund all books,
records, reports and any other information required under the Investment Company
Act of 1940, as amended (the "1940 Act"), to the extent that such books, records
and reports and other information are not maintained or furnished by the
custodian or other agents of the Fund; (iv) to furnish at the Manager's expense
for the use of the Fund such office space and facilities as the Fund may require
for its reasonable needs in the City of New York and to furnish at the Manager's
expense clerical services in the United States related to research, statistical
and investment work; (v) to render to the Fund administrative services such as
preparing reports to and meeting materials for the Fund's Board of Directors and
reports and notices to stockholders, preparing and making filings with the
Securities and Exchange Commission (the "SEC") and other regulatory and
self-regulatory organizations, including preliminary and definitive proxy
materials and post-effective amendments to the Fund's registration statement on
Form N-2 under the Securities Act of 1933, as amended, and 1940 Act, as amended
from time to time, providing assistance in certain accounting and tax matters
and investor and public relations, monitoring the valuation of portfolio
securities, assisting in the calculation of net asset value and calculation and
payment of distributions to stockholders, and overseeing arrangements with the
Fund's custodian, including the maintenance of books and records of the Fund;
and (vi) to pay the reasonable salaries, fees and expenses of such of the Fund's
officers and employees (including the Fund's shares of payroll taxes) and any
fees and expenses of such of the Fund's directors as are directors, officers or
employees of the Manager; provided, however, that the Fund, and not the Manager,
shall bear travel expenses (or an appropriate portion thereof) of directors and
officers of the Fund who are directors, officers or employees of the Manager to
the extent that such expenses relate to attendance at meetings of the Board of
Directors of the Fund or any committees thereof or advisors thereto. The Manager
shall bear all expenses arising out of its duties hereunder but shall not be
responsible for any expenses of the Fund other than those specifically allocated
to the Manager in this paragraph 1. In particular, but without limiting the
generality of the foregoing, the Manager shall not be responsible, except to the
extent of the reasonable compensation of such of the Fund's employees as are
directors, officers or employees of the Manager
whose services may be involved, for the following expenses of the Fund:
organization and certain offering expenses of the Fund (including out-of-pocket
expenses, but not including overhead or employee costs of the Manager or of any
one or more organizations retained as an advisor or consultant to the Fund);
fees payable to the Manager and to any advisor or consultants, including an
advisory board, if applicable; legal expenses; auditing and accounting expenses;
telephone, telex, facsimile, postage and other communication expenses; taxes and
governmental fees; stock exchange listing fees; fees, dues and expenses incurred
by the Fund in connection with membership in investment company trade
organizations; fees and expenses of the Fund's custodians, subcustodians,
transfer agents and registrars; payment for portfolio pricing or valuation
services to pricing agents, accountants, bankers and other specialists, if any;
expenses of preparing share certificates and other expenses in connection with
the issuance, offering, distribution, sale or underwriting of securities issued
by the Fund; expenses of registering or qualifying securities of the Fund for
sale; expenses relating to investor and public relations; freight, insurance and
other charges in connection with the shipment of the Fund's portfolio
securities; brokerage commissions or other costs of acquiring or disposing of
any portfolio securities of the Fund; expenses of preparing and distributing
reports, notices and dividends to stockholders; costs of stationery; costs of
stockholders' and other meetings; litigation expenses; or expenses relating to
the Fund's dividend reinvestment and cash purchase plan (except for brokerage
expenses paid by participants in such plan).
2. The Fund agrees to pay to the Manager in United States dollars, as full
compensation for the services to be rendered and expenses to be borne by the
Manager hereunder, a monthly fee which, on an annual basis, is equal to 1.10%
per annum of the value of the Fund's average weekly net assets. Each payment of
a monthly fee to the Manager shall be made within the ten days next following
the day as of which such payment is so computed. The Manager shall pay any
entity retained by the Manager to provide investment sub-advisory services with
respect to Argentine securities (the "Argentine Adviser") the fees required
pursuant to the sub-advisory contract with the Argentine Adviser. In the event
that the sub-advisory contract with the Argentine Adviser is terminated, the
Manager shall be responsible for furnishing to the Fund the services required to
be performed by the Argentine Adviser under these arrangements or for arranging
for a successor sub-investment advisor on terms and conditions acceptable to the
Fund and subject to the requirements of the 1940 Act. Upon any termination of
this Agreement before the end of a month, the fee for such part of that month
shall be prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
The value of the net assets of the Fund shall be determined pursuant to the
applicable provisions of the Articles of Incorporation and By-laws of the Fund,
as amended from time to time.
3. The Manager agrees that it 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.
4. In executing transactions for the Fund and selecting brokers or dealers,
the Manager shall use its best efforts to seek the best overall terms available.
In assessing the best overall terms available for any Fund transaction, the
Manager shall consider on a continuing basis all factors it deems relevant,
including, but not limited to, breadth of the market in the security, the price
of the security,
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the financial condition and execution capability of the broker or dealer and the
reasonableness of any commission for the specific transaction. In selecting
brokers or dealers to execute a particular transaction and in evaluating the
best overall terms available, the Manager may consider the brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other accounts over which the
Manager or an affiliate exercises investment discretion.
5. Nothing herein shall be construed as prohibiting the Manager from
providing investment advisory services to, or entering into investment advisory
agreements with, other clients (including other registered investment
companies), including clients which may invest in securities of Argentine
issuers, or from utilizing (in providing such services) information furnished to
the Manager by advisors and consultants to the Fund and others; nor shall
anything herein be construed as constituting the Manager as an agent of the
Fund.
Whenever the Fund and one or more other accounts or investment companies
advised by the Manager have available funds for investment, investments suitable
and appropriate for each shall be allocated in accordance with procedures
believed by the Manager to be equitable to each entity. Similarly, opportunities
to sell securities shall be allocated in a manner believed by the Manager to be
equitable. The Fund recognizes that in some cases this procedure may adversely
affect the size of the position that may be acquired or disposed of for the
Fund. In addition, the Fund acknowledges that the persons employed by the
Manager to assist in the performance of the Manager's duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the Manager or any affiliate of the
Manager to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
6. The Manager may rely on information reasonably believed by it to be
accurate and reliable. Neither the Manager nor its officers, directors,
employees or agents 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 Manager in the performance of its duties or by
reason of reckless disregard on the part of the Manager of its obligations and
duties under this Agreement. Any person, even though also employed by the
Manager, 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 Manager.
7. This Agreement shall remain in effect until the date which is one year
from the day and year first written above, 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 parties to this Agreement or interested
persons of any party to this Agreement, or of any entity regularly furnishing
investment advisory services with respect to the Fund pursuant to an agreement
with any party to this Agreement, 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
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at any time without penalty, on 60 days' written notice, by the Fund's Board of
Directors, by vote of holders of a majority of the outstanding voting securities
of the Fund, or by the Manager.
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 Manager's business or to a wholly-owned subsidiary of
such corporate successor which does not result in a change of actual control or
management of the Manager's business shall not be deemed to be an assignment for
the purposes of this Agreement. Any notice to the Fund or the Manager 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 either party hereto, except as permitted under the
1940 Act or rules and regulations adopted thereunder. 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 parties to this Agreement or interested persons of any
party to this Agreement, or of any entity regularly furnishing investment
advisory services with respect to the Fund pursuant to an agreement with any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval.
9. This Agreement shall be construed in accordance with the laws of the
State of New York, without giving effect to the conflicts of laws principles
thereof, 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"
shall have the meanings set forth in the 1940 Act.
10. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart.
11. This Agreement supersedes all prior investment advisory, management,
and/or administration agreements in effect between the Fund and the Manager.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
officers thereunto duly authorized as of the day and year first written above.
THE ARGENTINA FUND, INC.
By:
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Title: President
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XXXXXXX XXXXXX INVESTMENTS, INC.
By:
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Title:
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