INVESTMENT ADVISORY AGREEMENT
December 21, 1993
BEA Associates
One Citicorp Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Emerging Markets Infrastructure Fund, Inc. (the "Company"), a
corporation organized under the laws of the state of Maryland, herewith
confirms its agreement with BEA Associates (the "Adviser"), a general
partnership organized under the laws of the state of New York, as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Company desires to employ its capital by investing and
reinvesting in investments of the kind and in accordance with the limitations
specified in its Articles of Incorporation, as amended from time to time and
in its Registration Statement as from time to time in effect, and in such
manner and to such extent as may from time to time be approved by the Board
of Directors of the Company. Copies of the Company's Registration Statement
and Articles of Incorporation have been or will be submitted to the Adviser.
The Company agrees to provide copies of all amendments to the Company's
Registration Statement and Articles of Incorporation to the Adviser on an
on-going basis. The Company desires to employ and hereby appoints the Adviser
to act as investment adviser to the Company. The Adviser accepts the
appointment and agrees to furnish the services described herein for the
compensation set forth below.
2. SERVICES AS INVESTMENT ADVISER
Subject to the supervision and direction of the Board of Directors
of the Company, the Adviser will (a) act in accordance with the Company's
Articles of Incorporation, the Investment Company Act of 1940 and the
Investment Advisers Act of 1940, as the same may from time to time be
amended, (b) manage the Company's assets in accordance with its investment
objective and policies as stated in the Company's Registration Statement as
from time to time in effect, (c) make investment decisions and
exercise voting rights in respect of portfolio securities for the Company,
(d) place purchase and sale orders on behalf of the Company for all
investments and (e) borrow money on behalf of and in the name of the Company
within the limits established in the Company's Articles of Incorporation and
the Registration Statement as from time to time in effect. In providing these
services, the Adviser will provide investment research and supervision of the
Company's investments and conduct a continual program of investment,
evaluation and, if appropriate, sale and reinvestment of the Company's
assets. In addition, the Adviser will furnish the Company with whatever
statistical information the Company may reasonably request with respect to
the securities that the Company may hold or contemplate purchasing.
3. BROKERAGE
In executing transactions for the Company and selecting brokers or
dealers, the Adviser will use its best efforts to seek the best overall terms
available. In assessing the best overall terms available for any Company
transaction, the Adviser will consider all factors it deems relevant including,
but not limited to, breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer and the reasonableness of any commission for the specific transaction and
on a continuing basis. In selecting brokers or dealers to execute a particular
transaction and in evaluating the best overall terms available, the Adviser 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 Company
and/or other accounts over which the Adviser or an affiliate exercises
investment discretion.
4. INFORMATION PROVIDED TO THE COMPANY
The Adviser will keep the Company informed of developments materially
affecting the Company, and will, on its own initiative, furnish the Company from
time to time with whatever information the Adviser believes is appropriate for
this purpose.
5. STANDARD OF CARE
The Adviser shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Company in
connection with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect the Adviser
against any liability to the Company or its shareholders to which the Adviser
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard by it of
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its obligations and duties under this Agreement ("disabling conduct"). The
Company will indemnify the Adviser against, and hold it harmless from, any
and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) not resulting from disabling conduct by
the Adviser. 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 person to be indemnified 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 Adviser was not
liable by reason of disabling conduct by (a) the vote of a majority of a
quorum of non-party directors who are not "interested persons" of the Company
or (b) an independent legal counsel in a written opinion. The Adviser shall
be entitled to advances from the Company 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 the Maryland General Corporation Law. The Adviser shall provide to the
Company a written affirmation of its good faith belief that the standard of
conduct necessary for indemnification by the Company 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
Adviser shall provide a security in form and amount acceptable to the Company
for its undertaking; (b) the Company is insured against losses arising by
reason of the advance; or (c) a majority of a quorum of the full Board of
Directors of the Company, the members of which majority are 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
Company at the time the advance is proposed to be made, that there is reason
to believe that the Adviser will ultimately be found to be entitled to
indemnification.
6. COMPENSATION
(a) In consideration of the services rendered pursuant to this
Agreement, the Company will pay the Adviser, within five business days after
the end of the calendar quarter during which the date of the closing of the
offering contemplated by the Company's initial registration statement occurs
(the "Closing Date") and within five business days after the end of each
calendar quarter thereafter, a fee for the previous quarter computed at an
annual rate of 1.30% of the Fund's average weekly net assets.
The Adviser may retain the services of consultants in appropriate
circumstances and any costs associated with such consulting arrangements
shall be borne solely by the Adviser.
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(b) Upon any termination of this Agreement before the end of a quarter,
the fee for such part of that quarter shall be prorated according to the
proportion that such period bears to the full quarterly period and shall be
payable upon the date of termination of this Agreement. For the purpose of
determining fees payable to the Adviser, the value of the Company's net assets
shall be computed at the times and in the manner specified in the Company's
Registration Statement as from time to time in effect.
7. EXPENSES
The Adviser will bear all expenses in connection with the
performance of its services under this Agreement. The Company will bear
certain other expenses to be incurred in its operation, including:
organizational expenses; expenses for legal and independent accountants'
services; insurance premiums; outside auditing, accounting and pricing costs;
costs of maintenance of the Company's existence; costs attributable to
investor services, including, without limitation, telephone and personnel
expenses; costs of printing stock certificates; costs of printing proxies;
costs of shareholders' reports and meetings of the shareholders of the
Company and of the officers or Board of Directors of the Company; charges of
the custodians, any sub-custodians and the transfer and dividend-paying
agent; expenses in connection with the Dividend Reinvestment and Cash
Purchase Plan; Securities and Exchange Commission fees and fees of emerging
country regulatory bodies; fees and expenses of unaffiliated directors;
accounting and pricing costs; membership fees in trade associations; fidelity
bond coverage for the Fund's officers and employees directors' and officers'
errors and omissions insurance coverage; interest; brokerage costs and stock
exchange fees; taxes ; stock exchange listing fees and expenses; expenses of
qualifying the Fund's shares for sale in various states and foreign
jurisdictions; litigation and other extraordinary or non-recurring expenses
and other expenses properly payable by the Fund.
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8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Company understands that the Adviser now acts, will continue to
act or may act in the future as investment adviser to investment fiduciary
and other managed accounts or as investment adviser to one or more other
investment companies, the BEA Accounts and the Company has no objection to
the Adviser so acting, provided that whenever the Company and one or more
other accounts or investment companies advised by the Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with procedures believed to be equitable to each
entity. Similarly, opportunities to sell securities will be allocated in an
equitable manner. The Company recognizes that in some cases this procedure
may adversely affect the size of the position that may be acquired or
disposed of for the Company, and the Adviser agrees to report to the Board of
Directors of the Company on a quarterly basis whenever the Company and a BEA
Account are allocated portions of the same investment opportunity and will
review with the Board of Directors of the Company the basis for each such
allocation. In addition, the Company understands that the persons employed by
the Adviser to assist in the performance of the Adviser'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 Adviser or any
affiliate of the Adviser to engage in and devote time and attention to other
businesses or to render services of whatever kind or nature.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date the
Company's registration statement is declared effective by the Securities and
Exchange Commission and shall continue thereafter so long as such continuance
is specifically approved at least annually by (i) the Board of Directors of
the Company or (ii) a vote of a "majority" (as defined in the Investment
Company Act of 1940) of the Company's outstanding voting securities, provided
that in either event the continuance is also approved by a majority of the
Board of Directors who are not "interested persons" (as defined in said Act)
of any party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 60 days' written notice, by the Board of Directors of the
Company or by the Adviser or, by vote of holders of a majority of the
Company's shares. This Agreement will also terminate automatically in the
event of its assignment (as defined in said Act).
10. INDEPENDENT CONTRACTOR STATUS
The Advisor shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise expressly provided herein
or authorized by the Board of Directors of the Company from time to time,
have no authority to act for or represent the Company in any way or otherwise
to be deemed an agent of the Company.
11. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto.
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12. CHANGES IN PARTNERSHIP
The Adviser shall notify the Company of any change in the membership of
the Adviser within a reasonable time after such change.
13. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York without giving effect to the
conflicts of laws principles thereof.
14. COUNTERPARTS
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.
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance hereof by signing and returning the enclosed copy hereof.
Very truly yours,
THE LATIN AMERICA INVESTMENT FUND, INC.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
Accepted:
BEA ASSOCIATES
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer and
Managing Director
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