CHILEAN ADMINISTRATION AGREEMENT
July 1, 1994
BEA Administration, Administradora
de Fondos de Inversion de
Capital Extranjero
S.A.
Xxxxxxxxx 0000
Xxxxxxxx, Xxxxx
Dear Sirs:
The Latin America Investment Fund, Inc. (the "Company"), a
corporation organized under the laws of the state of Maryland and BEA
Associates ("BEA"), a general partnership formed under the laws of the state
of New York, each herewith confirms its agreement with BEA Administration,
Administradora deFondos de Inversion de Capital Extranjero S.A. (the
"Chilean Administrator"), a corporation organized under the laws of Chile,
regarding administration services to be provided by the Chilean Administrator
to the Company as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Company desires to employ its capital by investing and reinvesting
(a) in investments of the kind and in accordance with the limitations specified
in (i) the Company's Articles of Incorporation, as amended from time to time
(the "Articles"), and (ii) the Company's Registration Statement on Form N-2
filed with the Securities and Exchange Commission (the "Registration Statement")
and (b) in such manner and to such extent as may from time to time be approved
by the Company's Board of Directors. Copies of the Registration Statement and
the Articles have been or will be submitted to the Chilean Administrator. The
Company agrees to provide copies of all amendments to the Registration Statement
and the Articles to the Chilean Administrator on an on-going basis. The Company
and BEA desire to employ and hereby appoint the Chilean Administrator to act as
Chilean administrator for the Company with respect to investments in Chile. The
Chilean Administrator accepts this appointment and agrees to furnish the
services described herein for the compensation set forth below.
2. SERVICES AS CHILEAN ADMINISTRATOR
Subject to the supervision and direction of the Board of Directors of
the Company and of BEA, the Chilean Administrator is responsible for all
administrative functions in Chile with respect to the Company and will perform
various services for the Company including (a) maintaining the general ledger
and other books and records of the Company, preparing financial statements
required from the Company pursuant to Chilean law and regulations, using for
such purposes information to be provided by BEA, and making necessary accounting
filings
with the Chilean authorities as required by law, (b) making applications to the
Central Bank of Chile for remittances of monies outside Chile, (c) withholding
Chilean taxes due on amounts remitted abroad on account of dividends, interest
and net realized capital gains or otherwise, (d) acting as the Company's
representative in Chile pursuant to the regulations contained in Article 12 of
Chilean Law No. 18,657 and (e) providing clerical assistance in connection with
Chilean investments. The Chilean Administrator may subcontract any or all of
such services, except for those described in (d), to a third party.
3. COMPENSATION
(i)(a) In consideration of services rendered pursuant to this
Agreement, the Company will pay the Chilean Administrator within five business
days after the end of the calendar quarter during which the Effective Date (as
defined below) occurs and within five business days after the end of the next
calendar quarter thereafter a fee for the previous quarter computed monthly at
an annual rate of .10% of the Company's average weekly net assets invested in
Chile during the quarter. Thereafter, during the first three calendar quarters
of each year, the Company will pay the Chilean Administrator a fee for the
previous quarter equal to a fee computed at an annual rate of .10% of the
Company's average weekly net assets invested in Chile during the quarter. In the
fourth calendar quarter of each year, the Company will pay the Chilean
Administrator a fee equal to the greater of (i) a fee computed at the annual
rate of .10% of the Company's average weekly net assets invested in Chile during
the quarter or (ii) 2,000 UFs less the aggregate amount paid in the previous
three calendar quarters. In addition, the Chilean Administrator will be
reimbursed by the Company for any expenses, up to 500 UFs annually, reasonably
incurred in connection with the performance of services required by this Chilean
Administration Agreement (other than the accounting services described in clause
(a) of paragraph 2 hereto). For purposes of this Agreement, amounts owing in
Chilean pesos will be calculated at the "dolar observado" rate on the date of
payment or, if such rate ceases to exist in Chile, at an exchange rate commonly
utilized in lieu of the "dolar observado" rate.
(b) In addition to the compensation set forth above, the Company will
pay to the Chilean Administrator, in consideration of the accounting services
rendered pursuant to clause (a) of paragraph 2 above, within five business days
after the end of the calendar quarter during which the Effective Date occurs and
within five business days after the end of each calendar quarter thereafter a
fee of 51.33 UFs.
The UF value utilized will be its value on the date of payment or, if
UFs cease to exist, amounts owing under this Agreement will be calculated using
an exchange rate commonly utilized in lieu thereof or any one which reflects the
Chilean inflation rate. The fee for the period from the date of this
Agreement (the "Effective Date") to the end of the first calendar quarter in
which the Effective Date occurs shall be prorated according to the proportion
that such period bears to the full quarterly period.
(c) Upon any termination of this Agreement before the end of any
quarter, the fee for such part of a quarter shall be prorated according to the
proportion which 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 Chilean Administrator, the value of the
Company's net assets shall be computed at the times and in the manner specified
in the Registration Statement as from time to time in effect.
4. EXPENSES
Except as proved in paragraph 3(i) above, the Chilean Administrator
will bear all expenses in connection with the performance of its services under
this Agreement, including the payment of fees to any subcontractor retained by
it to perform services undertaken by the Chilean Administrator pursuant to this
Agreement. The Company will bear certain other expenses to be incurred in its
operation, including: organizational expenses; taxes, interest, brokerage costs
and commissions and stock exchange fees and the related Chilean value added tax;
fees of directors of the Company who are not officers, directors, or employees
of BEA, any investment sub-adviser to the Fund, or any of their affiliates;
Securities and Exchange Commission fees, state Blue Sky qualification fees;
charges of custodians, sub-custodians and transfer and dividend disbursing
agents; expenses in connection with the Company's Dividend Reinvestment and Cash
Purchase Plan; insurance premiums; outside auditing, pricing and legal expenses;
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 shareholders' reports and meetings of
the shareholders of the Company and of the officers or Board of Directors of
the Company; membership fees in trade associations; stock exchange listing
fees and expenses; litigation and other extraordinary or non-recurring
expenses.
5. STANDARD OF CARE
The Chilean Administrator shall exercise its best judgment in rendering
the services listed in paragraph 2 above. The Chilean Administrator shall be
responsible for its own negligent failure to perform its duties under this
Agreement.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the Closing Date and shall
continue unless terminated on 60 days' written notice by the Board of Directors
of the Company or upon 90 days' written notice by the Chilean Administrator.
7. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties
hereto.
8. 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.
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
-----------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
BEA ASSOCIATES
By: /s/
-----------------------------
Name:
Title:
Accepted:
BEA ADMINISTRATION, ADMINISTRADORA
DE FONDOS DE INVERSION DE
CAPITAL EXTRANJERO S.A.
By: /s/
Name:
Title:
