INVESTMENT ADVISORY AGREEMENT
THE LATIN AMERICA EQUITY FUND, INC.
November 10, 2000
Credit Suisse Asset Management, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
The Latin America Equity Fund, Inc. (formerly known as The Latin
America Investment Fund, Inc.) (the "Company"), a corporation
organized under the laws of the state of Maryland, herewith
confirms its agreement with Credit Suisse Asset Management, LLC
(the "Adviser"), a limited liability company organized under the
laws of the state of Delaware, 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, and in its Registration Statement as from time to time in
effect (including its Registration Statement on Form N-14 as declared
effective by the Securities and Exchange Commission on September 1,
2000), 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, as
amended, 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 ongoing 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) monitor
and evaluate the services provided by the Company's investment
sub-advisers under its investment sub-advisory agreements. 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 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) resulting from any claim,
demand, action or suit 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 person to be indemnified 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 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 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 after the end of each
calendar quarter, a fee for the previous quarter computed monthly
at an annual rate of 1.00% of the first US$100 million of the
Company's "Average Weekly Base Amount" (as defined below), 0.90%
of the next US$50 million and 0.80% of amounts above US$150 million.
(b) (i) "Average Weekly Base Amount" for any quarter is the average
of the lesser of (A) "Market Value" of the Company's outstanding
shares, and (B) the Company's net assets, in each case determined as
the last trading day for each week during that quarter.
(ii) "Market Value" of the Company's outstanding shares will be
determined as follows:
(A) if the Company's shares are listed or traded on any national
securities exchange or on the Nasdaq National Market, the shares shall
be valued at the last sale price on the exchange or market on which
they are principally traded, on the valuation date; if there is no
sale on the valuation date, the shares shall be valued at the mean
between the closing bid and asked price;
(B) if the Company's shares are traded over-the-counter but are not
listed or traded on any national securities exchange or on the Nasdaq
National Market, the shares shall be valued at the last sale price
on the valuation date or, if no sale occurs on that date, at the last
bid price; or
(C) if the Company's shares are not listed or traded on any
recognized securities market or over-the-counter, the shares shall be
deemed to have the same value as the underlying net assets of the
Company as of the valuation date.
(c) The Adviser (or, as provided below, the Company) shall pay to
Celfin Servicios Financieros S.A., the Chilean sub-investment adviser
of the Company (the "Sub-Adviser") the fees payable under the
Investment Sub-Advisory Agreement relating to the Company among the
Company, the Adviser and the Sub-Adviser. In the event that the
Investment Sub-Advisory Agreement is terminated, the Adviser shall
be responsible for furnishing to the Company the services required
to be performed by the Sub-Adviser under the Investment Sub-Advisory
Agreement or arranging for a successor sub-investment adviser with
respect to such investments on terms and conditions acceptable to
the Company and subject to the requirements of the Investment Company
Act of 1940.
The Company agrees that, at the request of the Adviser, it will pay
the Sub-Adviser directly in local currency the amounts payable to the
Sub-Adviser for sub-advisory services, provided that the fee payable
to the Adviser hereunder shall be reduced to the extent of amounts so
paid to the Sub-Adviser. The fee payable to the Adviser for the
period from the date set forth above to the end of the first calendar
quarter thereafter shall be prorated according to the proportion that
such period bears to the full quarterly period.
(d) 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, including compensation of and
office space for its officers and employees connected with investment
and economic research, trading and investment management and
administration of the Company, except as otherwise may be provided
in any separate agreement between the Company and the Adviser, as
well as the fees of all directors of the Company who are affiliated
with the Adviser or any of its affiliates. 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; fees of directors of the
Company who are not officers, directors, or employees of the Adviser,
the Sub-Advisers, any U.S. or foreign administrator or any of their
affiliates; U.S. 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.
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, 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. 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 set forth above
and shall continue for an initial two-year term 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 vote of
holders of a majority of the Company's shares, or upon 90 days'
written notice, by the Adviser. This Agreement will also terminate
automatically in the event of its assignment (as defined in said
Act).
10. Entire Agreement
This Agreement constitutes the entire agreement between the parties
hereto.
11. Changes in Membership
The Adviser shall notify the Company of any change in the membership
of the Adviser within a reasonable time after such change.
12. 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.
13. 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 EQUITY FUND, INC.
By:
Name:
Title:
Accepted:
CREDIT SUISSE ASSET MANAGEMENT, LLC
By:
Name:
Title:
780381.3
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