ABERDEEN GLOBAL INCOME FUND, INC. MANAGEMENT AGREEMENT
ABERDEEN GLOBAL INCOME FUND, INC.
AGREEMENT dated as of March 8, 2004, between Aberdeen Global
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;
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 Commonwealth 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:
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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. The Investment
Manager 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 amounts
between $200 million and $500 million and 0.55% of such assets in excess of
$500 million, computed based upon net asset value applicable to shares of
common stock and shares of preferred stock determined weekly and payable on
the first business day of each calendar month it being understood that the portion
of the fee which is equal to the percentage of the Fund’s net assets, measured at
the end of each week, held in securities (or cash) denominated in the currencies of
Australia and New Zealand, Canada, and the United Kingdom shall be paid to the
Investment Manager in, respectively, the currencies of Australia, Canada and the
United Kingdom. For the purpose of determining the fees payable to the
Investment Manager hereunder, the value of the Fund’s net assets shall be
computed initially at the times and in the manner specified in the Fund’s
registration statement on Form N-2, as such times and manner may be amended
from time to time by action of the Fund’s Board.
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 Officers and Directors 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.
Scope of Engagement. The Investment Manager hereby agrees
that the Fund, may, at any time, upon at least 60 days’ notice, advise the
Investment Manager that it wishes to limit the scope of the Investment Manager’s
engagement hereunder to that of managing the Fund’s investments solely with
respect to securities denominated in certain stipulated currencies, in which case
the fee otherwise payable to the Investment Manager as provided in Paragraph 1.2
hereof shall be reduced to reflect the proportion of the Fund’s aggregate net assets
measured at the end of each week which are denominated in the stipulated
currencies.
6.
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).
7.
Miscellaneous.
7.1 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.
7.2 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.
7.3 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.
7.4 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 as of the day and year first above written.
ABERDEEN GLOBAL 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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