EXHIBIT (c)(2)
INVESTMENT MANAGEMENT AGREEMENT
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The Southern Africa Fund, Inc.
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
February 25, 1994
(as amended April 30, 1998)
Alliance Capital Management L.P.
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Dear Sirs:
The undersigned herewith confirm our agreement with you as follows:
1. The Southern Africa Fund, Inc. (the "Fund") is a closed-end, non-
diversified management investment company registered under the Investment
Company Act of 1940 (the "Act"). The Fund is engaged in the business of
investing and reinvesting its assets in securities of the type and in accordance
with the limitations specified in our respective governing documents, the
registration statement filed by the Fund with the Securities and Exchange
Commission under the Securities Act of 1933 and the Act, and any representations
made in the Fund's prospectus, all in such manner and to such extent as we may
from time to time duly authorize. The Fund encloses a copy of its governing
documents and the other documents referred to above and will from time to time
furnish you with any amendments thereof.
2. (a) The Fund hereby employs you to manage the investment and
reinvestment of its assets (the "portfolio assets") and, without limiting the
generality of the foregoing, to provide management and other services specified
below.
(b) You will make decisions with respect to all purchases and sales of
the portfolio assets. To carry out such decisions, you are hereby authorized,
as the Fund's agent and attorney-in-fact, for its account and at its risk and in
its name, to place orders for the investment and reinvestment of the portfolio
assets. In all purchases, sales and other transactions in the portfolio assets
you are authorized to exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund might or could do with
respect to such purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions. You are permitted to utilize the
services of sub-advisers with respect to the management of the portfolio assets
subject to your obtaining the Fund's prior written approval before entering into
any such sub-advisory agreement.
(c) You will report to the Fund's Board of Directors at each meeting
thereof all changes in the
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portfolio assets since the prior report, and will also keep the Fund in touch
with important developments affecting the portfolio assets and on your own
initiative will furnish the Fund from time to time with such information as you
may believe appropriate for this purpose, whether concerning the individual
issuers whose securities are included in the Fund's portfolio, the industries in
which they engage, or the conditions prevailing in the economy generally. You
will also furnish the Fund with such statistical and analytical information with
respect to the portfolio assets as you may believe appropriate or as the Fund
reasonably may request. In making such purchases and sales of portfolio assets,
you will bear in mind the policies set from time to time by the Fund's Board of
Directors as well as the limitations imposed by the Fund's Articles of
Incorporation and in the Fund's Registration Statement under the Act and the
Securities Act of 1933, the limitations in the Act and of the Internal Revenue
Code of 1986 in respect of regulated investment companies.
(d) It is understood that you will from time to time employ or
associate with yourselves such persons as you believe to be particularly fitted
to assist you in the execution of your duties hereunder, the cost of performance
of such duties to be borne and paid by you; provided, that
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the Fund may agree to engage and pay sub-advisers or other consultants in
accordance with the requirements of the 1940 Act, including the engagement of
Sanlam Asset Management (Gibraltar) Limited. No obligation may be incurred on
the Fund's behalf in any such respect. During the continuance of this agreement
at the Fund's request you will provide the Fund persons satisfactory to the
Fund's Board of Directors to serve as the Fund's officers. Such personnel may be
employees of you or your affiliates. Nothing contained herein shall be construed
to restrict the Fund's right to hire its own employees or to contract for
services to be performed by third parties. Furthermore, you or your affiliates
(other than us) shall furnish us without charge with such management supervision
and assistance and such office facilities as you may believe appropriate or as
we may reasonably request subject to the requirements of any regulatory
authority to which you may be subject.
3. The Fund hereby confirms that, subject to the foregoing, the Fund
shall be responsible and hereby assumes the obligation for payment of all the
Fund's other expenses, including: (a) payment of the fee payable to you under
paragraph 5 hereof; (b) brokerage and commission expenses; (c) federal, state,
local and foreign taxes, including issue and transfer taxes, incurred by or
levied on us;
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(d) interest charges on borrowings; (e) the Fund's organizational and offering
expenses, whether or not advanced by you; (f) fees and expenses of registering
the Fund's shares under the appropriate federal securities laws and of
qualifying the Fund's shares under applicable state securities laws; (g) fees
and expenses of listing and maintaining the listing of the Fund's shares on any
national securities exchange; (h) expenses of printing and distributing reports
to shareholders; (i) costs of proxy solicitation; (j) fees, charges and expenses
of the Fund's administrator, custodians, subcustodians, nominees and registrar,
transfer and dividend disbursing agents; (k) fees of Sanlam Asset Management
(Gibraltar) Limited in its capacity as sub-adviser; (l) compensation of the
Fund's officers, directors and employees who do not devote any part of their
time to your affairs, the affairs of your affiliates, the affairs of the sub-
advisers or the affairs of their respective affiliates, other than the Fund; (m)
legal and auditing expenses; (n) the cost of stock certificates representing
shares of the Fund's common stock; and (o) costs of stationery and supplies.
4. The Fund shall expect of you, and you will give the Fund the
benefit of, your best judgment and efforts in rendering these services to the
Fund, and the Fund agrees
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as an inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to the Fund or to the Fund's
security holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations and
duties hereunder.
5. In consideration of the foregoing you shall receive a quarterly
fee at an annualized rate of .90% of the Fund's average weekly net assets for
periods prior to the date on which this agreement as amended becomes effective,
and for periods thereafter, at an annualized rate of either (i) .81% of the
Fund's average weekly net assets if 90% or less of the Fund's average weekly net
assets are invested in securities of Republic of South Africa issuers within the
meaning of the Fund's prospectuses dated February 25, 1994 ("South African
issuers") or (ii) the sum of (a) .80% of the Fund's average weekly net assets
and (b) .10% of the Fund's average weekly net assets not invested in securities
of
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South African issuers if greater than 90% of the Fund's average weekly net
assets are invested in securities of South African issuers. For purposes of the
calculation of such fee, average weekly net assets shall be determined on the
basis of the Fund's average net assets for each weekly period (ending on Friday)
ending during the quarter. The net assets for each weekly period are determined
by averaging the net assets on the Friday of such weekly period with the net
assets on the Friday of the immediately preceding weekly period. When a Friday
is not a business day for the Fund, then the calculation will be based on our
net assets on the business day immediately preceding such Friday. Such fee
shall be payable in arrears on the last day of each calendar quarter for
services performed hereunder during such quarter. If this Agreement or an
amendment thereto with respect to the calculation of the fee payable to you
hereunder becomes effective after the beginning of a quarter, or this agreement
terminates prior to the end of a quarter, the fee for the quarter at the proper
rate in effect for any relevant portions thereof shall be prorated according to
the proportion which such portions of the quarter bear to the full quarter.
6. This agreement shall continue in effect until January 31, 1999
and thereafter for successive twelve-month periods (computed from each February
1) provided that such continuance is specifically approved at least annually by
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the Fund's Board of Directors or by majority vote of the holders of the Fund's
outstanding voting securities (as defined in the Act), and, in either case, by a
majority of the Fund's Board of Directors who are not interested persons, as
defined in the Act, of any party to this agreement (other than as Directors of
the Fund) provided further, however, that if the continuation of this agreement
is not approved, you may continue to render the services described herein in the
manner and to the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it shall supersede all
previous agreements between us covering the subject matter hereof. This
agreement may be terminated at any time, without the payment of any penalty by
vote of a majority of the Fund's outstanding voting securities (as so defined),
or by a vote of a majority of the Fund's entire Board of Directors on sixty
days' written notice to you, or by you on sixty days' written notice to the
Fund.
7. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The term "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings
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ascribed hereto by governing law and any interpretation thereof contained in
rules or regulations promulgated by the Securities and Exchange Commission
thereunder.
8. You are, and at all times during the term of this agreement shall
be, duly registered as an investment adviser under the Investment Advisers Act
of 1940 (the "Advisers Act") and not prohibited by the Advisers Act or the Act
or the rules and regulations under the Advisers Act or the Act, from acting for
the Fund as contemplated by the Fund's prospectus and this agreement.
9. (a) Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your employees, or any of the officers or directors of
Alliance Capital Management Corporation, your general partner, who may also be a
director, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Act) to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render service of any kind to
any other trust, corporation, firm individual or association.
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(b) You will notify us of any change in the general partner of your
partnership within a reasonable time after such change.
10. You may from time to time make available without charge to us for
our use such marks or symbols owned by you as you may consider appropriate. Any
such marks or symbols so made available will remain your property and you shall
have the right, upon notice in writing, to require us to cease the use of such
▇▇▇▇ or symbol at any time.
11. This Agreement shall be construed in accordance with the laws of
the State of New York, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to the Fund the enclosed copy
hereof.
Very truly yours,
THE SOUTHERN AFRICA FUND, INC.
By __________________________
Name:
Title:
Agreed to and accepted
as of the date first set forth above.
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer
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The Fund and Alliance Capital Management L.P. hereby agree to the amendment
of this agreement as set forth above effective as of April 30, 1998.
THE SOUTHERN AFRICA FUND, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
By_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Secretary
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer
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The Fund and Alliance Capital Management L.P. hereby agree to the
amendment of this agreement as set forth above effective as of April 30, 1998.
THE SOUTHERN AFRICA FUND, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Secretary
ALLIANCE CAPITAL MANAGEMENT L.P.
BY ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and
Chief Operating Officer