AMENDED AND RESTATED
THE FIRST AUSTRALIA PRIME INCOME FUND, INC.
ADVISORY AGREEMENT
AGREEMENT executed this 9th day of September among The First Australia
Prime Income Fund, Inc. (the "Fund") a Maryland corporation registered under the
Investment Company Act of 1940 (the "1940 Act"), and EquitiLink International
Management Limited, a Jersey, Channel Islands corporation (the "Investment
Manager"), and EquitiLink Australia Limited, a New South Wales, Australia
corporation (the "Investment Adviser").
WHEREAS, the Fund is a closed-end management investment company;
WHEREAS, the Fund engages in the business of investing and reinvesting
its assets in the manner and in accordance with its stated investment objectives
and restrictions;
WHEREAS, the Fund has entered into a management agreement with the
Investment Manager dated February 1, 1990, as amended from time to time (the
"Management Agreement"), pursuant to which the Investment Manager will manage
the Fund's investments and will make investment decisions on behalf of the Fund
for which the Investment Manager will receive a monthly fee from the Fund as
specified in the Management Agreement;
WHEREAS, in connection with rendering the services required under the
Management Agreement, the Investment Manager is permitted to retain, at its
expense and in the manner set forth in the Management Agreement, investment
advisers to assist it in carrying out its obligations to the Fund under the
Management Agreement;
WHEREAS, the Investment Manager wishes to retain the Investment Adviser
to assist it in carrying out its obligations to the Fund under the Management
Agreement, and the Investment Adviser is willing to furnish such assistance to
the Investment Manager, in connection with the services specified below with
regard to the Fund; and
WHEREAS, the Fund hereby appoints the Investment Adviser to provide the
investment advisory services specified below with regard to the Fund, and the
Investment Adviser hereby accepts such appointment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Investment Adviser.
1.1 The Investment Adviser will make recommendations to the Investment
Manager as to specific portfolio securities to be purchased, retained or sold by
the Fund and will provide or obtain such research and statistical data as may be
necessary connection therewith. The Investment Adviser shall give the Investment
Manager (and the Fund) the benefit of the Investment Adviser's best judgment and
efforts in rendering services under this Agreement.
1.2 The Investment Manager will pay the Investment Adviser a fee
computed at the annual rate of 0.25% of the Fund's average weekly net assets
applicable to the shares of common stock and shares of preferred stock up to
$1,200 million and 0.20% of such assets in excess of $1,200 million, computed
based upon net asset value applicable to shares of common stock and shares of
preferred stock at the end of each week and payable at the end of each calendar
month.
2. Expenses. The Investment Adviser shall bear all expenses of its
respective employees and overhead incurred in connection with its duties under
this Agreement and shall pay all salaries and fees of the Fund's directors and
officers who are interested persons (as defined in the 0000 Xxx) of the
Investment Adviser but who are not interested persons of the Investment Manager.
3. Liability. Neither the Investment Manager nor the Investment
Adviser shall be liable for any error of judgment or for any loss suffered by
the Fund in connection with the matters to which this Agreement relates, except
a loss resulting from a breach of fiduciary duty with respect to receipt of
compensation for services (in which case any award of damages shall be limited
to the period and the amount set forth in Section 36(b)(3) of the 0000 Xxx) or a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Investment Manager or the Investment Adviser, as appropriate, in the
performance of, or from reckless disregard by such party of such party's
obligations and duties under, this Agreement.
4. Services Not Exclusive. It is understood that the services of the
Investment Manager and the Investment Adviser are not deemed to be exclusive,
and nothing in this Agreement shall prevent the Investment Manager or the
Investment Adviser, or any affiliate of either of them, from providing similar
services to other investment companies and other clients (whether or not their
investment objectives and policies are similar to those of the Fund) or from
engaging in other activities. When other clients of the Investment Manager or
the Investment Adviser desire to purchase or sell a security at the same time
such security is purchased or sold for the Fund, such purchases and sales will
be allocated among the clients of each in a manner that is fair and equitable in
the judgment of the Investment Manager and the Investment Adviser in the
exercise of their fiduciary obligations to the Fund and to such other clients.
5. Duration and Termination. This Agreement is effective upon
shareholder approval thereof as required under the 1940 Act and shall continue
in effect until February 1, 1994. If not sooner terminated, this Agreement shall
continue in effect with respect to the Fund for successive periods of twelve
months thereafter, provided that each such continuance shall be specifically
approved annually by the vote of a majority of the Fund's Board of Directors who
are not parties to this Agreement or interested persons (as defined in the 0000
Xxx) of any such party, cast in person at a meeting called for the purpose of
voting on such approval and either (a) the vote of majority of the outstanding
voting securities of the Fund, or (b) the vote of a majority of the Fund's
entire Board of Directors. Notwithstanding the foregoing, this Agreement may be
terminated with respect to the Fund at any time, without the payment of any
penalty, by a vote of a majority of the Fund's Board of Directors or a majority
of the outstanding voting securities of the Fund upon at least sixty (60) days'
written notice to the Investment Manager and the Investment Adviser, or by
either the Investment Manager or Investment Adviser upon at least
2
ninety (90) days' written notice to the Fund and the other party but any such
termination shall not affect continuance of this Agreement as to the remaining
parties. This Agreement shall automatically terminate as to any party in the
event of its assignment (as defined in the 1940 Act).
6. Miscellaneous.
6.1 This Agreement shall be construed in accordance with the laws of
the State of New York, provided that nothing herein shall be construed as being
inconsistent with the 1940 Act and any rules, regulations and orders thereunder.
6.2 The captions in this Agreement are included for convenience only
and in no way define or delimit any of the provisions hereof or otherwise affect
their construction or effect.
6.3 If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to that extent, the provisions of this
Agreement shall be deemed to be severable.
6.4 Nothing herein shall be construed as constituting any party an
agent of the Fund or of any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
THE FIRST AUSTRALIA PRIME INCOME
FUND, INC.
By: \s\ Xxxxx X. Xxxxxxx
------------------------------------
Title: President
EQUITILINK INTERNATIONAL
MANAGEMENT LIMITED
By: \s\ Xxxxx Xxxxx
------------------------------------
Title: Director
EQUITILINK AUSTRALIA LIMITED
By: \s\ Xxxxx Sechos
------------------------------------
Title: Director
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