ABERDEEN ASIA-PACIFIC INCOME FUND, INC.
MANAGEMENT AGREEMENT
AGREEMENT dated as of March 8, 2004, between
Aberdeen Asia-Pacific Income Fund, Inc. (the "Fund"), a
Maryland corporation registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), and
Aberdeen Asset Management Asia Limited, a Singapore
corporation ("AAMAL" or the "Investment Manager").
WHEREAS, the Fund is a closed-end management
investment company; and
WHEREAS, the Fund engages in the business of
investing its assets in the manner and in accordance with its
stated current investment objective and restrictions;
WHEREAS, the Fund (then known as The First
Australia Prime Income Fund, Inc.) entered into a
management agreement dated December 22, 2000 (the
"Former Management Agreement") with Aberdeen Asset
Managers (C.I.) Limited (then known as EquitiLink
International Management Limited), a Jersey, Channel
Islands corporation ("AAMCIL");
WHEREAS, in December 2003, the Board of Directors
of the Fund approved the transfer by AAMCIL to AAMAL
of the rights and obligations of AAMCIL under the Former
Management Agreement (the "Transfer");
WHEREAS, the Transfer would not be deemed an
"assignment" of the Former Management Agreement under
the 1940 Act, based upon factors including: (1) both before
and after the Transfer, Aberdeen Asset Management PLC
will continue to indirectly own 100% of, and to control,
AAMCIL and AAMAL; (2) the persons providing day-to-
day portfolio management of the Fund prior to the Transfer
will continue to provide such services after the Transfer;
(3) AAMAL and its personnel have, since 2001, been
providing portfolio management, research and trading
services to the Fund pursuant to a Memorandum of
Understanding, as amended, to which AAMAL, AAMCIL
and Aberdeen Asset Management Limited (the Fund's
Investment Adviser) are parties; (4) the Transfer will have
no material impact on the investment management of the
Fund's portfolio; (5) the nature and quality of the
investment management services to be provided to the
Fund by AAMAL will not be materially different from
those provided to the Fund by AAMCIL; (6) the Transfer is
not intended to, and will not result in, any change in the
fundamental investment processes, investment strategies or
investment techniques currently employed by portfolio
managers and investment professionals in providing
investment advisory services to the Fund; and (7) the
Transfer will not result in any change in the terms of the
Former Management Agreement, other than in the name of
the investment manager.
NOW THEREFORE, in consideration of the premises
and mutual covenants herein contained, the parties agree as
follows:
1. Obligations.
1.1 The Investment Manager will manage, in
accordance with the Fund's stated investment objective,
policies and limitations and subject to the supervision of
the Fund's Board of Directors, the Fund's investments and
will make investment decisions on behalf of the Fund
including the selection of and placing of orders with
brokers and dealers to execute portfolio transactions on
behalf of the Fund. The Investment Manager shall give the
Fund the benefit of the Investment Manager's best
judgment and efforts in rendering services under this
Agreement.
1.2 The Fund will pay the Investment Manager a fee
at the annual rate of 0.65% of the Fund's average weekly
net assets applicable to shares of common stock and shares
of preferred stock up to $200 million, 0.60% of such assets
between $200 million and $500 million, 0.55% of such
assets between $500 and $900 million, 0.50% of such
assets between $900 million and $1,750 million and 0.45%
of such assets in excess of $1,750 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.
1.3 In rendering the services required under this
Agreement, the Investment Manager may, at its expense,
employ, consult or associate with itself such person or
persons as it believes necessary to assist it in carrying out
its obligations under this Agreement. However, the
Investment Manager may not retain any person or company
that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Fund unless (i) the Fund is a
party to the contract with such person or company and (ii)
such contract is approved by a majority of the Fund's
Board of Directors and a majority of Directors who are not
parties to any agreement or contract with such company
and who are not "interested persons," as defined in the
1940 Act, of the Fund, the Investment Manager, or any
such person or company retained by the Investment
Manager, and is approved by the vote of a majority of the
outstanding voting securities of the Fund to the extent
required by the 1940 Act.
2. Expenses. The Investment Manager shall bear all
expenses of its employees, except as provided in the
following sentence, 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 Manager. The Fund will bear all of its own
expenses, including: expenses of organizing the Fund; fees
of the Fund's Directors who are not interested persons (as
defined in the 0000 Xxx) of any other party; out-of-pocket
expenses for all Directors and officers of the Fund,
including expenses incurred by the Investment Manager's
employees, who serve as Directors and officers of the
Fund, which may be reimbursed by the Fund under the
Fund's policy governing reimbursement of Fund-related
expenses; and other expenses incurred by the Fund in
connection with meetings of Directors and shareholders;
interest expense; taxes and governmental fees including
any original issue taxes or transfer taxes applicable to the
sale or delivery of shares or certificates therefor; brokerage
commissions and other expenses incurred in acquiring or
disposing of the Fund's portfolio securities; expenses in
connection with the issuance, offering, distribution, sale or
underwriting of securities issued by the Fund; expenses of
registering and qualifying the Fund's shares for sale with
the Securities and Exchange Commission and in various
states and foreign jurisdictions; auditing, accounting,
insurance and legal costs; custodian, dividend disbursing
and transfer agent expenses; and the expenses of
shareholders' meetings and of the preparation and
distribution of proxies and reports to shareholders.
3. Liability. The Investment Manager shall not 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 its part in the
performance of, or from reckless disregard by it of its
obligations and duties under, this Agreement.
4. Services Not Exclusive. It is understood that the
services of the Investment Manager are not deemed to be
exclusive, and nothing in this Agreement shall prevent the
Investment Manager or any affiliate, 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
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 Investment
Manager's clients, including the Fund, in a manner that is
fair and equitable in the judgment of the Investment
Manager in the exercise of its fiduciary obligations to the
Fund and to such other clients.
5. Duration and Termination. This Agreement shall
be effective as of the date first above written, and shall
continue in effect until December 22, 2004. 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 a 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
or by the Investment Manager upon at least ninety (90)
days' written notice to the Fund. This Agreement shall
automatically terminate 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
the Investment Manager an agent of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed effective as of the day and
year first above written.
ABERDEEN ASIA-PACIFIC INCOME FUND, INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: President
ABERDEEN ASSET MANAGEMENT ASIA LIMITED
By: /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: Managing Director
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