ABERDEEN ASIA-PACIFIC INCOME FUND, INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT dated as of March 8, 2004, among
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"), and
Aberdeen Asset Management Limited, a New South Wales,
Australia corporation (the "Investment Adviser").
WHEREAS, the Fund is a closed-end management
investment company;
WHEREAS, the Fund engages in the business of
investing and reinvesting its assets in the manner and in
accordance with its stated investment objectives 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"), pursuant to which
AAMCIL then managed the Fund's investments and made
investment decisions on behalf of the Fund, and for which
AAMCIL received a monthly fee from the Fund as
specified in the Former Management Agreement;
WHEREAS, in connection with rendering the services
required under the Former Management Agreement,
AAMCIL was permitted to retain, at its expense and in the
manner set forth in the Former Management Agreement,
investment advisers to assist it in carrying out its
obligations to the Fund under the Former Management
Agreement;
WHEREAS, pursuant to an investment advisory
agreement executed December 22, 2000 (the "Former
Advisory Agreement") among the Fund, AAMCIL and the
Investment Adviser (then known as EquitiLink Australia
Limited), AAMCIL retained the Investment Adviser to
assist it in carrying out its obligations to the Fund under the
Former Management Agreement;
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 and the Former Advisory
Agreement (the "Transfer");
WHEREAS, the Fund entered into a management
agreement dated as of March 8, 2004 (the "Management
Agreement") with AAMAL, pursuant to which AAMAL
will manage the Fund's investments and will make
investment decisions on behalf of the Fund, and for which
AAMAL will receive a monthly fee from the Fund as
specified in the Management Agreement;
WHEREAS, the Fund desires to have AAMAL assume
the rights and obligations of AAMCIL under the Former
Advisory Agreement, and AAMAL is willing to assume
such rights and obligations, by entering into this investment
advisory agreement (the "Agreement");
NOW, THEREFORE, in consideration of the premises
and mutual covenants herein contained, the parties agree as
follows:
I. Investment Adviser.
A. The Investment Adviser will make
recommendations to the Investment Manager
as to specific portfolio securities to be
purchased, retained or sold by the Fund and
will provide or obtain such research and
statistical data as may be necessary in
connection therewith. The Investment Adviser
shall give the Investment Manager (and the
Fund) the benefit of the Investment Adviser's
best judgment and efforts in rendering services
under this Agreement.
B. The Investment Manager will pay the
Investment Adviser a fee computed at the
annual rate of 0.25% of the Fund's average
weekly net assets applicable to the shares of
common stock and shares of preferred stock up
to $1,200 million and 0.20% of such assets in
excess of $1,200 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.
II. Expenses. The Investment Adviser shall bear all
expenses of its respective employees, except
certain expenses incurred by the Investment
Adviser's employees who serve as officers and
directors of the Fund which are reimbursed by the
Fund under the Fund's policy governing
reimbursement of Fund-related expenses. The
Investment Adviser shall bear all 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 Adviser but who are not interested
persons of the Investment Manager.
III. Liability. Neither the Investment Manager nor the
Investment Adviser shall 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 the
part of the Investment Manager or the Investment
Adviser, as appropriate, in the performance of, or
from reckless disregard by such party of such
party's obligations and duties under, this
Agreement.
IV. Services Not Exclusive. It is understood that the
services of the Investment Manager and the
Investment Adviser are not deemed to be
exclusive, and nothing in this Agreement shall
prevent the Investment Manager or the Investment
Adviser, or any affiliate of either of them, 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 or the Investment Adviser 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
clients of each in a manner that is fair and
equitable in the judgment of the Investment
Manager and the Investment Adviser in the
exercise of their fiduciary obligations to the Fund
and to such other clients.
V. 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
and the Investment Adviser, or by either the
Investment Manager or Investment Adviser upon
at least ninety (90) days' written notice to the
Fund and the other party but any such termination
shall not affect continuance of this Agreement as
to the remaining parties. This Agreement shall
automatically terminate as to any party in the
event of its assignment (as defined in the 1940
Act).
VI. Miscellaneous.
A. 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.
B. 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.
C. 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.
D. Nothing herein shall be construed as
constituting any party an agent of the Fund or
of any other party.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed 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
ABERDEEN ASSET MANAGEMENT LIMITED
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Director
6
- -
