EXHIBIT 99(b)(i)
DRAFT - FOR DISCUSSION PURPOSES ONLY
May___, 2002
The Asia Pacific Fund, Inc.
_____________________________
_____________________________
Attention: _________________________
RE: Loan Agreement
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Ladies and Gentlemen:
State Street Bank and Trust Company (the "Bank") is pleased to make
available a $25,000,000 committed unsecured revolving line of credit (the
"Committed Line") to The Asia Pacific Fund, Inc., a Maryland corporation (the
"Borrower"), acting on behalf of itself and its classes of shares on the
following terms and conditions:
I. Committed Line
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1. Term. The Committed Line shall commence on the date hereof and
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expire ______________, 2003 (the "Expiration Date"), unless extended in the
discretion of the Bank or terminated by the Borrower as provided herein. The
Borrower may terminate the Committed Line upon five days prior written notice
and payment of all outstanding principal, interest, fees, costs and expenses on
the effective date of termination.
2. Notice and Manner of Borrowings. Subject to the terms and
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conditions hereof the Bank will make revolving loans to the Borrower under the
Committed Line (each such loan, a "Loan") not to exceed in the aggregate
outstanding hereunder at any time the least of (a) $25,000,000 (the "Committed
Line Amount"), or (b) 25% of the Adjusted Net Assets of the Borrower (after
giving effect to the requested Loan) based upon the current market value of the
Borrower's assets determined with reference to daily prices provided by
independent pricing sources at the time the Loan is to be made, or (c) the
maximum amount which the Borrower is permitted to borrow at any time or in the
aggregate pursuant to the Prospectus, the Investment Company Act or any
registration made thereunder, any vote of the shareholders of the Borrower, any
agreement of the Borrower with any foreign, federal, state or local securities
division to which the Borrower is subject, any other applicable agreement or
document to which the Borrower is a party or any law, rule or regulation
applicable to the Borrower (the least of (a), (b), and (c) the "Maximum Facility
Amount"). Each request for a Loan hereunder, shall be made in writing by the
Borrower by delivering a completed loan request in the form of Exhibit B
attached hereto and such other information or documentation as the Bank may
reasonably request. Each such Loan request shall be made by the Borrower and
received by the Bank not later than 3:00 p.m. Boston time on the Business Day on
which such Loan is to be made. Each Loan request hereunder shall be deemed to be
a confirmation by the Borrower that no Default has occurred and
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May ____, 2002
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is continuing hereunder with respect to the Borrower, that the representations
and warranties of the Borrower described below remain true and correct and that
no borrowing limitations applicable to the Borrower will be exceeded after
giving effect to the requested Loan, each of which shall be a precondition to
the making of any Loan hereunder.
3. Evidence of Indebtedness. All Loans will be evidenced by a
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promissory note in the form attached hereto as Exhibit A (the "Note"). The
Borrower hereby authorizes the Bank to record each Loan and the corresponding
information on the schedule forming part of the Note, and, absent manifest
error, this record shall govern and control. The failure by the Bank to record,
or any error in so recording, any such amount on the Bank's books and records,
such schedule, or any other record maintained by the Bank, shall not limit or
otherwise affect the obligation of the Borrower to make payments of principal of
and interest on each Loan as provided herein and in the Note.
4. Interest Rate. Principal on each outstanding Loan shall bear
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interest at a variable rate per annum equal to the Bank's overnight federal
funds rate as determined by the Bank plus .50% per annum which rate shall change
when such federal funds rate changes. Interest on each Loan shall be calculated
on the basis of a 360-day year for the actual number of days elapsed. Following
the occurrence of a Default hereunder, unpaid principal on any Loan, and to the
extent permitted by applicable law, unpaid interest on any Loan, shall
thereafter bear interest, compounded monthly and be payable on demand, until
paid in full (after as well as before judgment) at a rate per annum equal to two
percent (2%) above the rate otherwise applicable to such Loan hereunder.
5. Payments and Prepayment/Recourse. Each Loan, together with accrued
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and unpaid interest thereon, shall be due and payable upon the earliest of (a)
60 days following the date on which such Loan is made, (b) the date on which
such Loan becomes due pursuant to Section II, Paragraph 4 below following the
occurrence of a Default; or (c) the Expiration Date. Interest on all Loans shall
be payable monthly in arrears on the fifteenth day of each month, provided
however, that if such day is not a Business Day, interest shall be payable on
the preceding Business Day, with all accrued and unpaid interest due and payable
on the same day when principal is due and payable. The Borrower covenants and
agrees to repay the outstanding aggregate principal amount of the Loans that at
any time exceeds the Maximum Facility Amount, upon the earlier to occur of the
Borrower first becoming aware of any such excess or demand by the Bank. Loans
may be prepaid without penalty and any amounts prepaid may be reborrowed subject
to the terms hereof. All payments of principal and interest with respect to any
Loan shall be made no later than 2:00 p.m. Boston time on the date due without
set off or deduction in immediately available United States dollars at the
Bank's office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx or as otherwise
directed in writing by the Bank.
None of the officers, employees, agents or shareholders of the
Borrower assumes any personal liability for the obligations entered into on
behalf of the Borrower with respect to the Committed Line.
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May ____, 2002
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6. Fees. The Borrower agrees to pay to the Bank a commitment fee
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equal to .09% per annum on the daily unused portion of the Committed Line Amount
which shall be payable quarterly in arrears on or before the 15th day following
the end of each March, June, September and December of each year and on the
Expiration Date or, if earlier, on the date when the commitment hereunder is
terminated. The commitment fee described herein shall be calculated on the basis
of a 360-day year for the actual number of days elapsed.
7. Use of Loan Proceeds. Proceeds of Loans may be used only (i) to
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temporarily finance the purchase or sale of securities for prompt delivery if
the Loan is to be repaid promptly in the ordinary course of business upon
completion of such purchase or sale transaction; or (ii) to finance the
redemption of the shares of an investor of the Borrower. Each Loan shall be made
in compliance with, and subject to, such Regulation U and no portion of any
proceeds of any Loan shall be used directly or indirectly in violation of any
provision of any statute, regulation, order or restriction applicable to the
Bank or the Borrower.
8. Security. All obligations of the Borrower with respect to the
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Committed Line shall remain unsecured.
II. General Loan Terms
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1. Covenants. Until all obligations of the Borrower with respect
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to the Committed Line have been paid in full and the Committed Line has been
terminated, unless otherwise consented to in writing by the Bank, the Borrower
covenants and agrees as follows:
(a) not to issue any preferred stock or create, incur, assume,
suffer to exist, or guarantee any Indebtedness other than, to the extent
permitted by the Prospectus (i) reverse repurchase agreements entered into by
the Borrower aggregating not in excess of 5% of the Borrower's total assets at
any time outstanding, (ii) Indebtedness to the Bank, and Indebtedness to the
Custodian of the Borrower incurred in connection with such custody relationship
(other than Indebtedness for borrowed money), (iii) Indebtedness and guarantees
existing as of the date of this loan agreement and disclosed on Exhibit C, (iv)
preferred stock or other Indebtedness and guarantees with the prior consent of
the Bank; and (v) other Indebtedness incurred in the ordinary course of the
Borrower's business in connection with portfolio investments and investment
techniques permissible under the Investment Company Act (and not for the primary
purpose of borrowing money), but only to the extent such Indebtedness is
reflected in the calculation of Adjusted Net Assets;
(b) not to create, incur, assume or suffer to exist any mortgage,
pledge, security interest, lien or other charge or encumbrance upon any of its
assets or properties, or enter into any agreement preventing it from encumbering
any such assets or properties other than, to the extent permitted by the
Prospectus (i) those in favor of the Bank or its affiliates or subsidiaries,
(ii) those shown on Exhibit D, (iii) those in favor of the Custodian of the
Borrower, (iv) those for which the Bank has given its prior written approval,
(v) those in the ordinary course
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May ____, 2002
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of the Borrower's business arising out of or in connection with portfolio
investments and investment techniques allowed by Section II, paragraph 1(a)(v)
above; and (vi) liens for taxes, fees, assessments and other governmental
charges not yet due and payable.
(c) to (i) duly observe and comply in all material respects with
all applicable laws, including, without limitation, the Investment Company Act
and any asset coverage and borrowing restrictions and restrictions on
indebtedness and extensions of credit contained therein and applicable to the
Borrower and applicable securities laws and regulations, and pay all taxes and
governmental charges prior to the time they become delinquent, (ii) maintain in
full force and effect all licenses and permits necessary in any material respect
for the proper conduct of its business, (iii) maintain its status as a
closed-end diversified management investment company registered under the
Investment Company Act and its status as a regulated investment company under
Subchapter M of the Internal Revenue Code, (iv) operate in compliance with its
organizational documents, the Prospectus and any other applicable investment
policies and restrictions and agreements relating thereto, (v) not merge or
consolidate with or into any entity or purchase all or substantially all of the
assets or stock of any entity or sell or otherwise transfer all or any
substantial portion of the Borrower's assets, (vi) not permit there to occur a
change in the investment adviser or custodian of the Borrower's assets from the
Investment Adviser and Custodian or permit any change in the investment
objectives or in the investment restrictions of the Borrower as described in the
Prospectus without the prior written consent of the Bank in each instance not to
be unreasonably withheld, (vii) comply with all terms and provisions of all
documents evidencing or securing any Indebtedness to the Bank and to or with any
party other than the Bank ("Other Indebtedness"), (viii) immediately notify the
Bank of any default or event of default with respect to Other Indebtedness and
of any default under or termination of any agreement with the Custodian or with
the Investment Adviser and to provide to the Bank a copy of any notice received
by the Borrower relating thereto and any notice or claim of any such default or
termination, and (ix) immediately notify the Bank of any Default hereunder and
of any litigation or governmental proceeding inspection or investigation
commenced or threatened in writing against the Borrower;
(d) to permit the Bank or its representatives and agents to visit
and inspect the properties of the Borrower and make copies or abstracts from the
Borrower's books and records;
(e) to pay all fees, costs and expenses incurred or paid by the
Bank, including the Bank's attorney's fees and expenses, in connection with the
administration, enforcement, amendment or termination of the Loan Documents;
(f) to submit to the Bank: (i) within 60 days after the end of
each semi-annual period in each fiscal year, the Borrower's semi-annual or
annual, as the case may be, financial statements including a statement of
assets, liabilities and investments as of the end of each such period in a form
acceptable to the Bank and, in the case of annual statements, audited by a
certified public accountant satisfactory to the Bank, (ii) all proxy materials,
reports to shareholders and other information delivered to shareholders of the
Borrower or to the United
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May ____, 2002
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States Securities and Exchange Commission including, in any event, copies of any
material change to the Prospectus or registration statement, and (iii) such
other financial statements and information as to the Borrower or Investment
Adviser as the Bank may reasonably request from time to time. All financial
statements required hereunder shall be prepared in accordance with generally
accepted accounting principles consistently applied; and
(g) execute and deliver such additional instruments to the
satisfaction of the Bank's counsel and take such further action as the Bank may
reasonably request solely to effect the purpose of the Loan Documents and the
Loans.
2. Representations and Warranties. The Borrower represents and
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warrants to the Bank that:
a) it is a corporation duly organized, validly existing and in
good standing under the laws of Maryland, and the Borrower is registered as a
closed-end management investment company under the Investment Company Act,
qualified as a regulated investment company within the meaning of the United
States Internal Revenue Code of 1986, has all requisite power and authority to
own its property and conduct its business as is now conducted, is duly
authorized to do business in each jurisdiction where the nature of its
properties or business requires such qualification and where failure to be so
qualified would reasonably be expected to have a Material Adverse Effect, and is
in compliance with its organizational documents and applicable law, including,
without limitation, the Investment Company Act and Federal Reserve Regulation U.
The Borrower has filed all income tax returns and paid all taxes due pursuant to
such returns and the charges, accruals and reserves on the books and records of
the Borrower with respect to such taxes and charges are, in the opinion the
Borrower, adequate;
b) the execution, delivery and performance of each of the Loan
Documents and the making of any Loan by the Bank to the Borrower hereunder (i)
are, and will be, within the Borrower's power and authority, (ii) have been
authorized by all necessary corporate proceedings, (iii) do not, and will not,
require the consent of any shareholders of the Borrower or approvals of any
governmental authority other than those which have been received, (iv) will not
contravene any provision of, or exceed any limitation contained in, the articles
of incorporation or by-laws or other organizational documents of the Borrower or
the Prospectus or any law, rule or regulation applicable to the Borrower,
including, without limitation, the Investment Company Act; and the same will be
in compliance with Federal Reserve Regulations T, U and X and the Investment
Company Act, (v) does not constitute a default under any other agreement, order
or undertaking binding on the Borrower, and (vi) does not require the consent or
approval of any obligee or holder of any instrument relating to the Other
Indebtedness or any other party other than for those consents and approvals
which have been received;
c) no portion of any proceeds of any Loan shall be used directly
or indirectly in violation of any provision of any statute, regulation, order or
restriction applicable to the Bank or the Borrower;
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May ____, 2002
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d) each of the Loan Documents constitutes the legal, valid,
binding and enforceable obligation of the Borrower, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors' rights generally and by general
equitable principles;
e) all financial statements previously furnished to the Bank by
the Borrower were prepared in accordance with generally accepted accounting
principles and present fairly and completely the financial position of the
Borrower. Since the date of such statements, there has been no material adverse
change in the assets, liabilities, financial condition or business of the
Borrower other than in the ordinary course of business. The Borrower has
disclosed to the Bank in writing any and all facts which, to the best of the
Borrower's knowledge after due inquiry, materially and adversely affect or may
affect the business, operations or financial condition of the Borrower or the
ability of the Borrower to perform its obligations under the Loan Documents;
f) the Borrower has good and marketable title to all its material
properties, assets and rights of every name and nature purportedly owned by it,
except for encumbrances shown on Exhibit D;
g) there is no litigation, arbitration, proceeding or
investigation pending, or to the best of the Borrower's knowledge overtly
threatened, against the Borrower or the Investment Adviser except those
previously disclosed by the Borrower to the Bank in writing and those described
on Exhibit E attached hereto;
h) the shares of the Borrower have been registered under the
Securities Act of 1933 and are eligible for sale under applicable state and
federal securities laws and regulations;
i) with regard to the Employee Retirement Income Security Act of
1974, and the rules and regulations thereunder, collectively, as amended and in
effect from time to time ("ERISA"), the Borrower is not treated as a single
employer with any other person under ERISA, and has no liability with respect to
any benefit arrangement, plan or multi-employer plan subject to ERISA;
j) the Borrower is not an "Affiliated Person", as defined in the
Investment Company Act, with the Bank;
k) the Investment Adviser serves as investment adviser to the
Borrower and the Custodian serves as custodian for assets of the Borrower; and
l) the Borrower has complied with, and is in compliance with, the
investment policies and restrictions set forth in the Prospectus.
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The making of each Loan hereunder to the Borrower shall be deemed to
be a reaffirmation by the Borrower as to the representations and warranties
contained in this paragraph and confirmation that no Default has occurred
hereunder or will occur after giving effect to the making of such Loan.
3. Default. It will be a Default hereunder with respect to the
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Borrower if any of the following events occur:
a) the Borrower fails to pay when due any amount of principal of
any Loan or any amount of interest thereon, or any fees or expenses payable
hereunder or under the Note; or
b) the Borrower fails to perform any term, covenant or agreement
contained in any of the Loan Documents or a default or event of default occurs
thereunder; or
c) any material representation or warranty of the Borrower made
in any of the Loan Documents or as an inducement for the Bank to make any Loan
shall prove to have been false in any material respect upon the date when made
or deemed to have been made; or
d) the Borrower fails to pay or perform any Obligation whether
now existing or hereafter arising, except as otherwise provided in this Section
II, Paragraph 3, when due or the Borrower fails to pay at maturity, or within
any applicable period of grace, any obligations for Other Indebtedness, or for
the use of real or personal property, or fails to observe or perform any term,
covenant or agreement evidencing or securing such Other Indebtedness or relating
to such use of real or personal property; or
e) the Borrower or the Investment Adviser (i) applies for or
consents to the appointment of, or the taking of possession by, a receiver,
custodian, trustee, liquidator or similar official of itself or of all or a
substantial part of its property, (ii) is generally not paying its debts as such
debts become due, (iii) makes a general assignment for the benefit of its
creditors, (iv) commences any case or proceeding under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, or any other law providing for the relief of debtors, (v) fails to
contest in a timely or appropriate manner, or acquiesces in writing to, any
petition filed against it in an involuntary case under the Federal Bankruptcy
Code or other law, (vi) takes any action under the laws of its jurisdiction of
incorporation or organization similar to any of the foregoing or (vii)
discontinues its business; or
f) a proceeding or case shall be commenced against the Borrower
or the Investment Adviser without the application or consent of such party, in
any court of competent jurisdiction, seeking (i) the liquidation,
reorganization, dissolution, winding-up, or composition or readjustment of its
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the
like of it or of all or any substantial part of its assets, or (iii) similar
relief in respect of it, under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts or any other
law providing for the relief of debtors, and such proceeding or
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May ____, 2002
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case shall continue undismissed, or unstayed and in effect, for a period of 60
days; or an order for relief shall be entered in an involuntary case under the
Federal Bankruptcy Code, against the Borrower or the Investment Adviser or
action under the laws of the jurisdiction of incorporation or organization of
the Borrower or the Investment Adviser similar to any of the foregoing shall be
taken with respect to the Borrower or the Investment Adviser and shall continue
unstayed and in effect for any period of 60 days; or
g) a final judgment or final order for the payment of money is
entered against the Borrower by any court, or an execution or similar process is
issued or levied against property of the Borrower, that in the aggregate exceeds
5% of the Adjusted Net Assets of the Borrower in value and such judgment, order,
warrant or process shall continue undischarged or unstayed for 30 days; or
h) there occurs a change in the business, assets, financial
condition or prospects of the Borrower resulting in a Material Adverse Effect,
but shall not include a decline in the net assets of the Borrower resulting from
redemptions by shareholders of the Borrower or a decline in market value of
securities held by the Borrower; or
i) the Borrower challenges the validity or enforceability of any
portion of any of the Loan Documents; or
j) any investment advisory agreement which is in effect on the
date hereof relating to the Borrower terminates or the Investment Adviser ceases
to serve as the investment adviser for the Borrower or the Custodian ceases to
serve as the custodian for the Borrower's assets without the prior written
consent of the Bank in each instance which consent shall not be unreasonably
withheld; or
k) the Borrower shall violate, or take any action that would
result in a deviation from, any of its fundamental investment policies or
restrictions applicable to the Borrower as in effect from time to time,
including those as set forth in the Prospectus.
4. Remedies. Upon the occurrence of a Default described in Section
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II(3)(e) and (f), immediately and automatically; and upon the occurrence of any
other Default at any time thereafter while such Default is continuing, at the
Bank's option and upon the Bank's declaration:
(a) the Committed Line established hereunder shall terminate with
respect to the Borrower;
(b) the unpaid principal amount of the Loans to the Borrower,
together with accrued interest and all other Obligations, shall become
immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived; and
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May ____, 2002
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(c) the Bank may exercise any and all rights it has under any of
the Loan Documents and proceed to protect and enforce the Bank's rights by any
action at law, in equity or other appropriate proceeding.
The Borrower authorizes the Bank and the Custodian to charge and
setoff against any deposit account or other account maintained with either the
Bank or the Custodian on behalf of the Borrower and apply the proceeds thereof
against repayment of any unpaid Obligations of the Borrower, as appropriate. In
addition, the Custodian is hereby directed by the Borrower to dispose of the
Borrower's assets as selected by the Borrower's Investment Adviser to the extent
necessary to repay all amounts due to the Bank from the Borrower to the extent
that the Obligations of the Borrower have not been paid when due or if a Default
has occurred. If the Borrower's Investment Adviser does not select a sufficient
amount of assets to repay all amounts due to the Bank from the Borrower within a
reasonable time, the Custodian is hereby directed by the Borrower, upon one
day's prior written notice to the Borrower and its Investment Adviser, to
dispose of the Borrower's assets to the extent necessary to repay all amounts
due to the Bank from the Borrower. The foregoing shall be deemed to be
continuing and irrevocable "proper instructions" to the Custodian for all
purposes under the custody agreement between the Borrower and the Custodian. The
foregoing shall be in addition to any other rights or remedies the Bank and the
Custodian may have against the Borrower following the occurrence of a Default
hereunder.
5. Notices. All notices hereunder shall be in writing and shall be
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deemed to have been given one Business Day after delivery to an overnight
courier or when delivered by hand to the address given below and in each case
such delivery is confirmed to have been made. Notices to the Bank shall be given
to State Street Bank and Trust Company, Lafayette Corporate Center, 0 Xxxxxx xx
Xxxxxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attn.: Xxxx Xxxxx Xxxxxxxxx,
Vice President or Mutual Fund Lending Department Head, and notices to the
Borrower shall be deemed to have been given if given at the address stated at
the beginning of this loan agreement, Attention: ______________________.
6. Amendments and Waivers. No waivers shall be effective unless in
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writing. No right of the Bank shall be exclusive of any other right of the Bank
now or hereafter available under the Loan Documents, at law, in equity or
otherwise; or by statute or any other provision of law; and no course of dealing
or delay by the Bank in exercising any right hereunder shall operate as a waiver
thereof or otherwise affect any rights or remedies of the Bank. All amendments
hereto must be in writing signed by all parties hereto.
7. Assignments and Participations. The Borrower may not assign or
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transfer or participate any of its rights under any of the Loan Documents
without the prior written consent of the Bank. The Bank may assign, pledge,
transfer or participate its rights hereunder to any Federal Reserve Bank or to
any other person or entity, provided however that no such person or entity
taking a participation interest in the Borrower's Obligations, without the
consent of the Borrower, shall have any rights with respect to such
participation other than for the right to vote
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May ____, 2002
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on changes in interest, fees, commitment amount, principal payments, and any
advance rate described herein.
8. Waiver of Jury Trial. Except as prohibited by law, neither the
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Borrower nor the Bank, nor any assignee or successor of the Borrower or the
Bank, shall seek a jury trial in any lawsuit, proceeding, counterclaim or any
other litigation procedure based upon or arising out of any of the Loan
Documents. Neither the Borrower nor the Bank will seek to consolidate any such
action, in which a jury trial has been waived, with any other action in which a
jury trial has not been waived. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY
DISCUSSED BY THE PARTIES HERETO, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO
NO EXCEPTIONS. NO PARTY HERETO HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN
ALL INSTANCES.
9. Jurisdiction. EACH OF THE LOAN DOCUMENTS SHALL BE CONSTRUED IN
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ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT
SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED ABOVE. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
10. Counterparts. This loan agreement may be executed in any number
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of counterparts each of which shall be deemed to be an original document.
11. Definitions. Except as otherwise defined herein, all financial
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terms shall be defined in accordance with generally accepted accounting
principles. The following defined terms as used herein shall have the following
meanings:
"Adjusted Net Assets" shall mean, as applied to the Borrower at
any time, (a) the value of the total assets of the Borrower at such time, less
(b) all Indebtedness of the Borrower at such time other than Loans outstanding
hereunder. Total assets shall mean the value of the total assets of the Borrower
determined in accordance with the Investment Company Act. For purposes of this
definition the value of the Borrower's portfolio securities shall be the value
of such securities based upon the current market value of the Borrower's assets
determined with reference to daily prices provided by independent pricing
sources at the time the Loan in question is made.
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May ____, 2002
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"Business Day" shall mean any day excluding Saturday and Sunday
and excluding any other day which shall be in Boston, Massachusetts a legal
holiday or a day on which banking institutions are authorized by law to close.
"Custodian" shall mean State Street Bank and Trust Company.
"Indebtedness" means, all obligations, contingent and otherwise,
which, in accordance with generally accepted accounting principles, should be
classified upon a balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including, without limitation, in any event and
whether or not so classified: (i) all debt and similar monetary obligations,
whether direct or indirect; (ii) all guarantees, endorsements and other
contingent obligations, whether direct or indirect, in respect of Indebtedness
of others, including any obligation to supply funds to or in any manner to
invest in, directly or indirectly, the debtor (whether by way of loan, stock
purchase, capital contribution or otherwise), to purchase Indebtedness, or to
assure the owner of Indebtedness against loss, through an agreement to purchase
goods, supplies or services for the purpose of enabling the debtor to make
payment of the Indebtedness held by such owner or otherwise, and the obligations
to reimburse the issuer of any letters of credit; and (iii) all liabilities
secured by any mortgage, pledge, security interest, lien, charge or other
encumbrance existing on property owned or acquired subject thereto, or with
respect to which assets have been segregated, whether or not the liability
secured thereby shall have been assumed, including without limitation, any cash
or securities held or otherwise pledged as collateral in connection with any
portfolio investments or investment techniques.
"Investment Adviser" means _________________________.
"Investment Company Act" means the Investment Company Act of
1940, as amended, together with all related rules and regulations promulgated by
the United States Securities and Exchange Commission relating thereto.
"Loan Documents" means this loan agreement, the Note and any
other documents executed in connection herewith, as the same may be amended,
superseded or replaced.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business condition (financial or otherwise), operations, performance or
properties of the Borrower, (b) the rights or remedies of the Bank under this
loan agreement, or (c) the ability of the Borrower to perform its obligations
under this loan agreement.
"Obligations" means any and all obligations of the Borrower to
the Bank of every kind and description, direct or indirect, absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising, regardless of how they arise or by what agreement or
instrument, if any, and including obligations to perform acts and refrain from
taking action as well as obligations to pay money.
The Asia Pacific Fund, Inc.
May ____, 2002
Page 12
"Prospectus" means the current Prospectus of the Borrower as of
the effective date of this loan agreement.
If the foregoing satisfactorily sets forth the terms and conditions
of the Committed Line, please execute and return to the undersigned each of the
Loan Documents and such other documents and agreements as the Bank may request.
We are pleased to provide the Committed Line to the Borrower and look forward to
the ongoing development of our relationship.
Sincerely,
STATE STREET BANK AND
TRUST COMPANY, as Bank
By: _______________________________
Title: _____________________________
Acknowledged and Accepted:
-------------------------
THE ASIA PACIFIC FUND, INC.
By: _______________________________
Title: _____________________________
STATE STREET BANK AND TRUST COMPANY,
as Custodian
By: ________________________________
Title: ______________________________
EXHIBIT A
PROMISSORY NOTE
$_____________ ________________, 2002
Boston, Massachusetts
For value received, the undersigned hereby promises to pay to State
Street Bank and Trust Company (the "Bank"), or order, at the head office of the
Bank at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 xx xxxxxxxxxxx
xxxxxxxxx Xxxxxx Xxxxxx dollars, the principal amount of
____________________________ Dollars ($_____________), or, if less, the
aggregate original principal amount of outstanding Loans which have not been
prepaid as provided herein. Each Loan shall be payable upon the earliest to
occur of 60 days after the date on which such Loan is made, the date on which
the Loan becomes due whether following the occurrence of a Default or as
otherwise described in the Loan Agreement, as hereinafter defined, or
________________ (the "Expiration Date"). Interest on the unpaid principal
amount outstanding hereunder shall be payable at the variable rate per annum
equal to the Bank's overnight federal funds rate as determined by the Bank plus
..50% per annum. Interest on principal outstanding hereunder shall be payable
monthly in arrears on the fifteenth day of each month beginning on the first
such date following the date hereof, with all accrued and unpaid interest due
and payable upon the Expiration Date or when principal outstanding hereunder is
otherwise due and payable. Each change in such interest rate shall take effect
simultaneously with the corresponding change in such federal funds rate.
Interest shall be computed on the basis of a 360-day year for the actual number
of days elapsed, including holidays or other days on which the Bank is not open
for the conduct of banking business.
All Loans hereunder and all payments on account of principal and
interest hereof shall be recorded by the Bank. The entries on the records of the
Bank (including any appearing on this Note), absent manifest error, shall govern
and control as to amounts outstanding hereunder, provided that the failure by
the Bank to make any such entry shall not affect the obligation of the Borrower
to make payments of principal and interest on all Loans as provided herein and
in the Loan Agreement.
Overdue principal, and, to the extent permitted by law, overdue
interest, shall bear interest, compounded monthly and payable on demand in
immediately available funds, at a rate per annum equal to two percent (2%) above
the rate otherwise applicable to such principal.
This Note is issued pursuant to, and entitled to the benefits of, and
is subject to, the provisions of a certain loan agreement dated ______________,
2002 by and between the undersigned and the Bank (herein, as the same may from
time to time be amended or extended, referred to as the "Loan Agreement"), but
neither this reference to the Loan Agreement nor any provision thereof shall
affect or impair the absolute and unconditional obligation of the undersigned
maker of this Note to pay the principal of and interest on this Note as herein
provided. All terms not otherwise defined herein shall be used as defined in the
Loan Agreement.
The undersigned may at its option prepay all or any part of the
principal of this Note without penalty. Amounts prepaid may be reborrowed
subject to the terms of the Loan Agreement.
Any deposits or other sums at any time credited by or due from the
Bank to the undersigned and any securities or other property of the undersigned
at any time in the possession of the Bank may at all times be held and treated
as collateral for the payment of this Note.
The undersigned maker and every endorser and guarantor hereof hereby
waives presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement
hereof and consents that this Note may be extended from time to time and that no
such extension or other indulgence, and no substitution, release or surrender of
collateral and no discharge or release of any other party primarily or
secondarily liable hereon, shall discharge or otherwise affect the liability of
the undersigned, endorser or guarantor. No delay or omission on the part of the
Bank in exercising any right hereunder shall operate as a waiver of such right
or of any other right hereunder, and a waiver of any such right on any one
occasion shall not be construed as a bar to or waiver of any such right on any
future occasion.
This instrument shall have the effect of an instrument executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts (without giving effect to any conflicts of laws
provisions contained therein).
WITNESS: [BORROWER]
______________________________ By: _____________________________
Title: ____________________________
SCHEDULE I TO NOTE DATED ____________, 2002
FROM _____________________ TO THE BANK
Date of Loan Amount of Principal Amount of Outstanding Notation
------------ ------------------- Principal Paid Balance Made By
-------------- ------- -------
EXHIBIT B
ADVANCE/PAYDOWN
REQUEST FORM
DATE:
------------------------------------------------------------------------
TO: STATE STREET BANK AND TRUST COMPANY
------------------------------------------------------------------------
ATTN:
------------------------------------------------------------------------
FROM: The Asia Pacific Fund, Inc.
------------------------------------------------------------------------
Borrower (DDA # )
In connection with the loan agreement and related documents currently
in effect with State Street Bank and Trust Company (collectively, the
"Agreement"), please increase or reduce the outstanding balance on behalf of the
above-indicated Borrower as indicated below. The Loan should be recorded on the
books of the Borrower with the Bank and interest payable to the Bank should be
recorded at the agreed upon rate.
Further, the Borrower hereby represents and warrants that:
1. The proceeds of the Loan shall be used in conformance with the terms of the
Agreement, and no Default or event of default has occurred thereunder;
2. The Borrower is in compliance with all the terms and conditions in the
Agreement and will remain in compliance therewith after giving effect to the
making of the requested Loan; and
3. All of the representations and warranties of the Borrower set forth in
Section II (2) of the Agreement are true and correct on and as of the date
hereof; and
4. The following amounts and statements are true in connection with the
requested Loan:
(a) Beginning Loan Balance: $___________________
(b) Total Assets of the Borrower: $___________________
(c) Total Indebtedness of the Borrower
(not including beginning loan balance
or the requested Loan): $___________________
(d) Adjusted Net Assets of the Borrower
(b minus c = Adjusted Net Assets): $___________________
(e) 25% of Adjusted Net Assets: $___________________
(f) The amount of all Loans to the Borrower,
after giving effect to the Loan requested hereby,
totals: $___________________
(g) The amount set forth in (f) above does not exceed the least of (a)
$25,000,000, (b) the amount in (e) above; or (c) the maximum amount which the
Borrower is permitted to borrow at any time or in the aggregate pursuant to the
Prospectus, the Investment Company Act or any registration made thereunder, any
vote of the shareholders of the Borrower, any agreement of the Borrower with any
foreign, federal, state or local securities division to which the Borrower is
subject, any other applicable agreement or document to which the Borrower is a
party or any law, rule or regulation applicable to the Borrower.
The undersigned is a duly authorized officer of the Borrower with
authority to execute and deliver this document to the Bank and request the Loan
described herein on behalf of the Borrower.
By:
------------------------------------
Name:
------------------------------------
Title
------------------------------------
Date:
------------------------------------
EXHIBIT C
---------
INDEBTEDNESS
To be submitted by the Borrower
EXHIBIT D
---------
ENCUMBRANCES
To be submitted by the Borrower
EXHIBIT E
---------
LITIGATION
To be submitted by the Borrower
