-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N6S3vseKOLFDoS0Am7VMRjT/qWOUtijLX+nSED9o+8xQu9i7ezUDS7CWXYPY4RwH jd9+faTilRFpymyGtQuH0A== 0000950123-04-000682.txt : 20040123 0000950123-04-000682.hdr.sgml : 20040123 20040123141222 ACCESSION NUMBER: 0000950123-04-000682 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20040123 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KOREA FUND INC CENTRAL INDEX KEY: 0000748691 IRS NUMBER: 133226146 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-36819 FILM NUMBER: 04540145 BUSINESS ADDRESS: STREET 1: 345 PARK AVE STREET 2: C/O SCUDDER STEVENS & CLARK INC CITY: NEW YORK STATE: NY ZIP: 10154 BUSINESS PHONE: 6173305464 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KOREA FUND INC CENTRAL INDEX KEY: 0000748691 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133226146 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: 345 PARK AVE STREET 2: C/O SCUDDER STEVENS & CLARK INC CITY: NEW YORK STATE: NY ZIP: 10154 BUSINESS PHONE: 6173305464 SC TO-I 1 y93395tasctovi.txt SCHEDULE TO-I AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 23, 2004. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- SCHEDULE TO TENDER OFFER STATEMENT UNDER SECTION 14(D)(1) OR 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 --------------------- THE KOREA FUND, INC. (Name of Subject Company (issuer)) THE KOREA FUND, INC. (Name of Filing Person (offeror)) COMMON STOCK, $0.01 PAR VALUE PER SHARE (Title of Class of Securities) 500634100 (CUSIP Number of Class of Securities) Richard T. Hale, Chairman The Korea Fund, Inc. c/o Deutsche Investment Management Americas, Inc. 345 Park Avenue New York, New York 10154 (800) 349-4281 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) --------------------- COPY TO: MEREDITH M. BROWN, ESQ. DEBEVOISE & PLIMPTON 919 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 909-6000 --------------------- CALCULATION OF FILING FEE
- ----------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- TRANSACTION VALUATION AMOUNT OF FILING FEE - ----------------------------------------------------------------------------------------------------------- $106,781,675(a) $8,638.64 - ----------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------
- --------------- (a) Calculated as the aggregate maximum purchase price to be paid for 4,966,590 shares in the offer, based upon a price of $21.50 (95% of the net asset value per share of $22.63 on January 20, 2004). [ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. Amount Previously Paid: Not applicable Form or Registration No.: Not applicable Filing Party: Not applicable Date Filed: Not applicable [ ] Check box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes to designate any transactions to which this statement relates: [ ] third party tender offer subject to Rule 14d-1 [X] issuer tender offer subject to Rule 13e-4 [ ] going-private transaction subject to Rule 13e-3 [ ] amendment to Schedule 13D under Rule 13d-2 Check the following box if the filing is a final amendment reporting the results of the tender offer. [ ] INTRODUCTORY STATEMENT This Issuer Tender Offer Statement on Schedule TO relates to an offer by The Korea Fund, Inc., a Maryland corporation (the "Fund"), to purchase for cash up to 4,966,590 of its issued and outstanding common stock, par value $0.01 per share, upon the terms and subject to the conditions contained in the Offer to Purchase dated January 23, 2004 and the related Letter of Transmittal which are filed as exhibits to this Schedule TO. This Issuer Tender Offer Statement on Schedule TO is being filed in satisfaction of the reporting requirements of Rule 13e-4(c)(2) promulgated under the Securities Exchange Act of 1934, as amended. The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference in answer to Items 1 through 11 of Schedule TO. ITEM 12. EXHIBITS (a)(1)(i) Offer to Purchase, dated January 23, 2004. (a)(1)(ii) Form of Letter of Transmittal. (a)(1)(iii) Form of Notice of Guaranteed Delivery. (a)(1)(iv) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(1)(v) Form of Letter to Clients of Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(2) None. (a)(3) Not Applicable. (a)(4) Not Applicable. (a)(5) Press release issued on January 21, 2004. (b)(1) $1,300,000,000 Credit Agreement, dated as of April 11, 2002 (the "Credit Agreement"), among certain mutual funds managed by Deutsche Investment Management Americas Inc., JPMorgan Chase Bank, J.P. Morgan Securities Inc., State Street Bank and Trust Company and Credit Lyonnais New York Branch. (b)(2) Termination, Replacement and Restatement Agreement of the Credit Agreement, dated as of April 10, 2003. (d) Amendment to the License, Approval and Confirmation of The Korea Fund, Inc., dated July 2, 1998, issued by the Ministry of Finance and Economy of Korea. (g) None. (h) None.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3 Not Applicable. 2 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. THE KOREA FUND, INC. By: /s/ JOHN MILLETTE ------------------------------------ Name: John Millette Title: Vice President and Secretary Dated: January 23, 2004 3 EX-99.A.1.I 3 y93395taexv99waw1wi.txt OFFER TO PURCHASE OFFER TO PURCHASE FOR CASH UP TO 4,966,590 OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OF THE KOREA FUND, INC. AT 95% OF NET ASSET VALUE PER SHARE BY THE KOREA FUND, INC. THE OFFER WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON FEBRUARY 23, 2004, UNLESS THE OFFER IS EXTENDED THIS OFFER IS SUBJECT TO IMPORTANT TERMS AND CONDITIONS, INCLUDING THE CONDITIONS LISTED UNDER "CERTAIN CONDITIONS OF THE OFFER". NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THIS OFFER, PASSED UPON THE FAIRNESS OR MERITS OF THE OFFER OR DETERMINED WHETHER THIS OFFER TO PURCHASE IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIME. To the Shareholders of The Korea Fund, Inc.: The Korea Fund, Inc., a diversified, closed-end management investment company incorporated under the laws of the state of Maryland (the "Fund"), is offering to purchase up to 4,966,590 of its issued and outstanding shares of Common Stock, par value $0.01 per share (the "Shares"). As of January 20, 2004, 49,665,902 Shares were outstanding. The offer is for cash at a price equal to 95% of the net asset value ("NAV") per Share determined as of the close of the regular trading session of the New York Stock Exchange, the principal market in which the Shares are traded (the "NYSE"), on the business day after the day the offer expires, and is upon the terms and subject to the conditions set forth in this Offer to Purchase and the related Letter of Transmittal (which together with any amendments or supplements thereto collectively constitute the "Offer"). The Offer will expire at 5:00 p.m. Eastern time on February 23, 2004, unless extended. The Shares are traded on the NYSE under the symbol "KF". The NAV as of the close of the regular trading session of the NYSE on January 20, 2004 was $22.63 per Share and the last reported sale price on the NYSE on such date for a Share was $19.96. Until the Offer expires, NAV quotations can be obtained from Georgeson Shareholder Communications, Inc. (the "Information Agent"), by calling (800) 843-0369 between the hours of 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday (except holidays). Tendering shareholders will not be obliged to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Fund pursuant to the Offer. The Fund will pay all charges and expenses of the Information Agent and Alpine Fiduciary Services, Inc. (the "Depositary"). The Fund mailed this Offer to Purchase and the accompanying Letter of Transmittal to record holders on or about January 23, 2004. IMPORTANT INFORMATION Shareholders who desire to tender their Shares should either: (1) properly complete and sign the Letter of Transmittal, provide thereon the original of any required signature guarantee(s) and mail or deliver it together with the certificates for the Shares (in proper certificated or uncertificated form) and any other documents required by the Letter of Transmittal; or (2) request their broker, dealer, commercial bank, trust company or other nominee to effect the transaction on their behalf. Shareholders who desire to tender Shares registered in the name of such a brokerage firm or other financial intermediary must contact that firm to effect a tender on their behalf. Tendering shareholders will not be obligated to pay brokerage commissions in connection with their tender of Shares, but they may be charged a fee by a brokerage firm or other financial intermediary for processing the tender(s) on their behalf. The Fund reserves the absolute right to reject tenders determined not to be in appropriate form. IF YOU DO NOT WISH TO TENDER YOUR SHARES, YOU NEED NOT TAKE ANY ACTION. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS NOR DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC., THE FUND'S INVESTMENT MANAGER (THE "MANAGER") NOR DEUTSCHE INVESTMENTS TRUST MANAGEMENT COMPANY LIMITED, THE FUND'S SUBADVISER (THE "SUBADVISER"), MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE FUND, ITS BOARD OF DIRECTORS, THE MANAGER OR THE SUBADVISER AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR TO MAKE ANY REPRESENTATION OR TO GIVE ANY INFORMATION IN CONNECTION WITH THE OFFER OTHER THAN AS CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF MADE OR GIVEN, ANY SUCH RECOMMENDATION, REPRESENTATION OR INFORMATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, ITS BOARD OF DIRECTORS, THE MANAGER OR THE SUBADVISER. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES. THE FUND HAS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") A TENDER OFFER STATEMENT ON SCHEDULE TO UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, RELATING TO THE OFFER. 2 TABLE OF CONTENTS
PAGE ---- Summary Term Sheet............................................... 4 1. Price; Number Of Shares..................................... 7 2. Purpose Of The Offer; Plans Or Proposals Of The Fund........ 7 3. Certain Conditions Of The Offer............................. 8 4. Procedures For Tendering Shares............................. 9 5. Withdrawal Rights........................................... 12 6. Payment For Shares.......................................... 12 7. Source And Amount Of Funds; Effect Of The Offer............. 13 8. Price Range Of Shares; Dividends/Distributions.............. 16 9. Selected Financial Information.............................. 17 10. Interest Of Directors, Executive Officers And Certain Related Persons............................................. 19 11. Certain Information About The Fund.......................... 20 12. Additional Information...................................... 21 13. Certain United States Federal Income Tax Consequences....... 21 14. Certain Legal Matters: Regulatory Approvals................. 23 15. Amendments; Extension Of Tender Period; Termination......... 23 16. Miscellaneous............................................... 24
3 SUMMARY TERM SHEET This summary highlights important information concerning this tender offer. To understand the tender offer fully and for a more complete discussion of the terms and conditions of the tender offer, you should read carefully the entire offer to purchase and the related letter of transmittal. WHAT IS THE TENDER OFFER? - The Korea Fund, Inc. is offering to purchase up to 4,966,590 of shares of common stock for cash at a price per share equal to 95% of the per share net asset value as of the close of regular trading session of the New York Stock Exchange on the business day after the day the tender offer expires. Unless extended, the tender offer will expire at 5:00 p.m. Eastern time on February 23, 2004. The tender offer is subject to a number of conditions. See "Certain Conditions of the Offer." WHY IS THE FUND MAKING THIS TENDER OFFER? - On April 25, 2003, in light of the evolution of the Korean capital markets and shareholder concerns that the Fund's shares have traded at a discount to their net asset value, the Fund's Board of Directors committed to undertake a special review of alternatives that would enable shareholders to receive value that is near net asset value for at least a portion of their shares. The Board determined that, after considering a full range of alternatives, the tender offer is in the best interests of the Fund and its shareholders because it enables shareholders to receive value that is near net asset value for at least a portion of their shares while maintaining the closed-end structure of the Fund. After completion of the tender offer, the Board will continue to monitor the price of the Fund's shares relative to their net asset value and to review whether further action is appropriate. See "Purposes of the Offer; Plans or Proposals of the Fund." WHEN WILL THE TENDER OFFER EXPIRE, AND MAY THE TENDER OFFER BE EXTENDED? - The tender offer will expire at 5:00 p.m. Eastern time on February 23, 2004, unless extended. The Fund may elect at any time to extend the expiration date of the tender offer. If the tender offer is extended, the Fund will issue a press release announcing the extension. See "Amendments; Extension of Tender Period; Termination." WHAT IS THE NET ASSET VALUE PER FUND SHARE AS OF A RECENT DATE? - As of January 20, 2004, the net asset value per share was $22.63 and the last reported sales price on the New York Stock Exchange for a share of the Fund's common stock was $19.96. See "Price Range of Shares; Dividend/ Distributions" for more information regarding the trading range of the common stock and the Fund's net asset value per share during the past two years. Before the tender offer expires, net asset value quotations can be obtained from Georgeson Shareholder Communications, Inc. by calling (800) 843-0369 between 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday (except holidays). WILL THE FUND'S NET ASSET VALUE PER SHARE BE HIGHER OR LOWER ON THE DATE THAT THE PRICE TO BE PAID FOR TENDERED SHARES IS TO BE DETERMINED? - No one can accurately predict the Fund's net asset value per share at a future date. HOW DO I TENDER MY SHARES? - In order for your shares to be purchased in the tender offer, you must follow the procedures set forth in "Procedures for Tendering Shares" and in the Letter of Transmittal that accompanies this Offer to Purchase. MUST I TENDER ALL OF MY SHARES? - No. You may tender either all or any smaller number of shares you own unless you own fewer than 100 shares total, in which case you have to tender either all or none of your shares. 4 MAY I WITHDRAW MY SHARES AFTER I HAVE TENDERED THEM AND, IF SO, BY WHEN? - Yes, you may withdraw your shares at any time prior to 5:00 p.m. Eastern time on February 23, 2004 or, if the offer is extended, at any time prior to 5:00 p.m. Eastern time on the new expiration date. In order to be effective, the Depositary must receive your notice of withdrawal prior to the expiration of the tender offer at one of the addresses on the back cover of this Offer to Purchase. You may retender withdrawn shares by following the tender procedures before the offer expires, including any extension period. In addition, if we have not accepted for payment shares you tendered, you may withdraw your tendered shares at any time after March 19, 2004 and prior to their acceptance for payment. See "Withdrawal Rights." HOW DO I WITHDRAW TENDERED SHARES? - A notice of withdrawal of tendered shares must be timely received by the Depositary which specifies the name of the shareholder who tendered the shares, the number of shares being withdrawn (which must be all of the shares tendered) and, as regards share certificates which represent tendered shares that have been delivered or otherwise identified to the Depositary, the name of the registered owner of such shares if different than the person who tendered the shares. See "Withdrawal Rights." MAY I PLACE ANY CONDITIONS ON MY TENDER OF SHARES? - No. WHAT IF MORE THAN 4,966,590 SHARES ARE TENDERED AND NOT TIMELY WITHDRAWN? - The Fund is offering to purchase up to 4,966,590 shares of its common stock. If shareholders tender more than 4,966,590 shares, the Fund will purchase duly tendered shares from tendering shareholders on a pro rata basis, disregarding fractions, based upon the number of shares each shareholder tenders and does not timely withdraw except that, if a shareholder owns beneficially or of record 99 shares or less, the Fund will purchase all shares tendered by such shareholder. The Fund does not intend to increase the number of shares that it is offering to purchase, even if shareholders tender more than 4,966,590 shares. DOES THE FUND HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT FOR TENDERED SHARES? - Yes. The Fund expects to pay for tendered shares with cash on hand and proceeds from the sale of portfolio securities. The Fund is authorized to borrow for temporary or emergency purposes, and, to the extent that the Fund does not have sufficient resources through cash on hand and the disposition of portfolio securities to purchase shares in the tender offer, it intends to finance a portion of the Offer through temporary borrowing. See Section 7. IF SHARES I TENDER ARE ACCEPTED BY THE FUND, WHEN WILL PAYMENT BE MADE? - Payment for tendered shares, if accepted, will be made as soon as possible after the expiration of the tender offer. IS MY SALE OF SHARES IN THE TENDER OFFER A TAXABLE TRANSACTION? - It is anticipated that U.S. shareholders (other than those who are tax exempt) who sell shares in the tender offer will generally recognize gain or loss for U.S. federal income tax purposes equal to the difference between the cash they receive for the shares sold and their adjusted basis in the shares sold. The sale date for tax purposes will be the date the Fund accepts shares for purchase. See "Certain United States Federal Income Tax Consequences" for a general summary of the U.S. federal income tax consequences of a sale of shares pursuant to the tender offer, including the possibility that different tax treatment may apply; the differing rules for U.S. and non-U.S. shareholders; and the imposition of withholding taxes on payments to tendering shareholders who have not completed and returned certain required IRS Forms. Please consult your tax advisor for a full understanding of your individual tax consequences, including potential state, local and foreign taxation. 5 IS THE FUND REQUIRED TO COMPLETE THE TENDER OFFER AND PURCHASE ALL SHARES TENDERED UP TO THE NUMBER OF SHARES TENDERED FOR? - Yes, unless certain conditions described under "Certain Conditions of the Offer" are not satisfied. The Fund also has the right to amend or terminate the tender offer prior to the time the tender offer expires. IS THERE ANY REASON SHARES TENDERED WOULD NOT BE ACCEPTED? - In addition to those circumstances described under "Certain Conditions of the Offer" in which the Fund is not required to accept tendered shares, the Fund has reserved the right to reject any and all tenders determined by it not to be in appropriate form. The Fund may reject tenders of shares if, for instance, the Letter of Transmittal does not include original signature(s) or the original of any required signature guarantee(s). HOW WILL TENDERED SHARES BE ACCEPTED FOR PAYMENT? - Properly tendered shares, up to the number tendered for, will be accepted for payment by a determination of the Fund's Board of Directors followed by notice of acceptance to the Depositary, which is thereafter to make payment as directed by the Fund with funds to be deposited with it by the Fund. See "Payment for Shares." WHAT ACTION NEED I TAKE IF I DECIDE NOT TO TENDER MY SHARES? - None. DOES THE FUND'S MANAGEMENT RECOMMEND THAT SHAREHOLDERS PARTICIPATE IN THE TENDER OFFER, AND WILL THEY PARTICIPATE IN THE TENDER OFFER? - None of the Fund, its Board of Directors, its investment manager or its subadviser is making any recommendation to the Fund's shareholders whether or not to tender shares in the tender offer. None of the Fund's directors or officers intend to tender the shares they beneficially own in the tender offer. See "Interests of Directors, Executive Officers and Certain Related Persons." WILL THERE BE ADDITIONAL OPPORTUNITIES TO TENDER SHARES TO THE FUND? - Potentially. The Fund's Board of Directors has approved a program (the "Program") under which, subject to fiduciary and other applicable requirements, the Fund will conduct a tender offer for its own shares during the first quarter of 2005 and the first quarter of 2006, in each case if during the 13 week measurement period ending the preceding December 31, shares of the Fund trade on the NYSE at an average weekly discount from net asset value greater than 15%. Each offer would be conducted for 10% of the Fund's outstanding shares of common stock at a price equal to 95% of net asset value on the business day after the last day of the tender offer. The Fund may at its option pay for some or all shares repurchased in these additional offers with portfolio securities rather than cash. There can be no assurance that the discount will be in excess of 15% during the measurement periods. See "Purpose of the Offer; Plans or Proposals of the Fund." HOW DO I OBTAIN MORE INFORMATION? - Questions, requests for assistance and requests for additional copies of the Offer to Purchase, the Letter of Transmittal and all other tender offer documents should be directed to Georgeson Shareholder Communications, Inc., the information agent for the tender offer, toll free at (800) 843-0369. If you do not own shares directly, you should obtain this information and the documents from your broker, dealer, commercial bank, trust company or other nominee, as appropriate. 6 1. PRICE; NUMBER OF SHARES. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or modified, the terms and conditions of any such extension or amendment), the Fund will accept for payment and purchase for cash up to 4,966,590 of its issued and outstanding Shares that are properly tendered and not withdrawn in accordance with Section 5 prior to the Expiration Date. The term "Expiration Date" shall mean 5:00 p.m. Eastern time on February 23, 2004, unless the Fund, in its sole discretion, shall extend the period the Offer is open, in which case Expiration Date shall mean the last time and date the Offer, as so extended by the Fund, shall expire. The Fund reserves the right in its sole discretion and for any reason to amend, extend or terminate the Offer. See Sections 3 and 15. The Fund will not be obligated to purchase Shares pursuant to the Offer under certain circumstances. See Section 3. The purchase price of the Shares will be 95% of their NAV per Share determined as of the close of the regular trading session of the NYSE on the business day after the Expiration Date. The Fund will not pay interest on the purchase price under any circumstances. The NAV as of the close of the regular trading session of the NYSE on January 20, 2004 was $22.63 per Share and the last reported sale price of a Share on the NYSE on such date was $19.96, representing a discount of 11.80% to NAV. Prior to the Expiration Date, NAV quotations can be obtained from the Information Agent by calling (800) 843-0369 between the hours of 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday (except holidays). The Offer is being made to all shareholders and is not conditioned upon shareholders tendering in the aggregate any minimum number of Shares. If more than 4,966,590 Shares are duly tendered pursuant to the Offer (and not withdrawn as provided in Section 5), unless the Fund determines not to purchase any shares, the Fund will purchase Shares from tendering shareholders, in accordance with the terms and conditions specified in the Offer, on a pro rata basis (disregarding fractions) based upon the number of Shares duly tendered by or on behalf of each shareholder (and not so withdrawn); provided that, the Fund will exclude from such pro-rata reduction and accept all Shares duly tendered in accordance with the terms and conditions specified in the Offer by any shareholder who owns, beneficially or of record, an aggregate of not more than 99 Shares. The Fund does not intend to increase the number of Shares offered for purchase, even if more than 4,966,590 Shares are tendered. On January 20, 2004, there were 49,665,902 Shares issued and outstanding, and there were 1,236 holders of record of Shares. Certain of these holders of record were brokers, dealers, commercial banks, trust companies and other institutions that held Shares in nominee name on behalf of multiple beneficial owners. 2. PURPOSE OF THE OFFER; PLANS OR PROPOSALS OF THE FUND. The Board of Directors of the Fund (the "Board") considered and approved the Offer and the Program at a meeting held on January 21, 2004 (the "January Board Meeting"). The Fund is making the Offer and implementing the Program to provide its shareholders with an opportunity to sell a portion of the outstanding Shares at a price that is near the NAV per share. The Board for many years has sought to address the discount to net asset value at which the Fund's shares have traded, in ways consistent with the best interests of shareholders and applicable regulatory requirements. The Board has discussed and considered various alternative strategies to address the discount, including instituting a managed dividend policy, conducting share repurchases, committing to conduct periodic self-tender offers, combining with other funds, converting to an open-end format and liquidating. Past actions taken by the Board have included a special in-kind dividend of portfolio securities, a share buy-back program, purchases of Fund shares pursuant to the Fund's Dividend Reinvestment Plan and increased publicity about the Fund. On April 25, 2003, the Fund issued a press release announcing that, in light of the evolution of the Korean capital markets and the concerns that shareholders have expressed about the discount, the Board would undertake a special review of possible alternatives that would enable shareholders within the next twelve months to receive value that is near net asset value for at least a portion of their shares. The alternatives available to the Fund, including a full range of strategic and structural alternatives, were considered at meetings of the Board held on May 28, July 8-9, December 16-17, 2003, and January 21, 2004. After consideration of these alternatives, the Manager recommended, and the Board on January 21, 2004 approved, making an initial tender offer for up to 10% of the Fund's common stock at 95% of its net asset value. At the January Board Meeting, the Board also approved the Program for additional tender offers to purchase shares of the Fund's outstanding stock, in order to give shareholders additional opportunities to receive close to net asset value for 7 their shares in the near future in the event that the shares of the Fund continue to trade at a discount to net asset value. The Board committed the Fund, subject to fiduciary and other applicable requirements, to make a tender offer to acquire 10% of its outstanding shares of common stock during the first quarter of 2005 and during the first quarter of 2006, at a per share purchase price of 95% of the Fund's net asset value per share, in each case if, over a 13 week measurement period ending the preceding December 31, shares of the Fund trade on the NYSE at an average weekly discount from net asset value greater than 15%. The Fund may at its option pay for some or all of the shares repurchased in these additional offers with portfolio securities rather than with cash. There can be no assurance that the Fund's average weekly discount will exceed 15% over the measurement periods. At the same time, the Board concluded that maintaining the current closed-end format was in the best interests of the Fund's shareholders because, under current market conditions, including the emerging nature of the Korean capital markets, the volatility and the limited liquidity of many of the Fund's holdings, the Fund's investment objective of long-term capital appreciation can best be achieved through a closed-end structure. The Board believes that the long-term and recent performance of the Fund supports this view. The Board believes that the Offer and the Program serve the best interests of the Fund's shareholders. There can be no assurance that this Offer and the Program will reduce or eliminate any market price discount from NAV of the Shares. The market price of the Shares will, among other things, be determined by the relative demand for and supply of Shares in the market, the Fund's investment performance, the Fund's dividends and yield and investor perception of the Fund's overall attractiveness as an investment as compared with other investment alternatives. Any shares acquired by the Fund pursuant to the Offer and the additional offers pursuant to the Program will become treasury shares and will be available for issuance by the Fund without further shareholder action (except as required by applicable law or the rules of national securities exchanges on which the Shares are listed). Except as set forth above, as referred to in Section 10 or in connection with the operation of the Fund's Dividend Reinvestment Plan, the Fund does not have any present plans or proposals and is not engaged in any negotiations that relate to or would result in (a) any extraordinary transaction, such as a merger, reorganization or liquidation, involving the Fund or any of its subsidiaries; (b) other than in connection with transactions in the ordinary course of the Fund's operations and for purposes of funding the Offer, any purchase, sale or transfer of a material amount of assets of the Fund or any of its subsidiaries; (c) any material change in the Fund's present dividend policy, or indebtedness or capitalization of the Fund; (d) any plans or proposals to change the number or the term of members of the Board, to fill any existing vacancies on the Board or to change any material term of the employment contract of any executive officer; (e) any other material change in the Fund's corporate structure or business, including any plans or proposals to make any changes in the Fund's investment policy for which a vote would be required by Section 13 of the Investment Company Act of 1940, as amended (the "1940 Act"); (f) any class of equity securities of the Fund to be delisted from a national securities exchange or to cease to be authorized to be quoted in an automated quotations system operated by a national securities association; (g) any class of equity securities of the Fund becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; (h) the suspension of the Fund's obligation to file reports pursuant to Section 15(d) of the Exchange Act; (i) the acquisition by any person of additional securities of the Fund, or the disposition of securities of the Fund; or (j) any changes in the Fund's charter, bylaws or other governing instruments or other actions that could impede the acquisition of control of the Fund. 3. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the Offer, and in addition to (and not in limitation of) the Fund's right to extend and amend the Offer at any time in its sole discretion, the Fund shall not be required to accept for payment or, subject to the applicable rules and regulations of the Commission, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), pay for, and may delay the acceptance for payment of or payment for any tendered Shares, if: (a) the Fund is not able to liquidate portfolio securities in an orderly manner and consistent with the Fund's investment objective and policies or its status as a regulated investment company under the Internal Revenue Code in order to provide sufficient cash from the disposition of portfolio securities to purchase Shares tendered pursuant to the Offer; (b) there shall be instituted, pending or threatened before any governmental entity or court any action, proceeding, application, claim or any judgement, order or injunction sought or any other action taken by any person or entity which restrains, prohibits or materially delays the making or consummation of the Offer, challenges the 8 acquisition by the Fund of any Shares pursuant to the Offer or the Board's fulfillment of its fiduciary obligations in respect thereof, seeks to obtain any material amount of damages or otherwise directly or indirectly adversely effects the Offer or the Fund; (c) there shall have occurred (i) any general suspension of trading in or limitation on prices for securities on the NYSE, the over-the-counter market or any foreign exchange on which portfolio securities held by the Fund are traded, (ii) any declaration of a banking moratorium or similar action by Federal, state, Korean or other foreign authorities or any suspension of payment by banks in the United States, New York State, Korea or any other foreign country which is material to the Fund, (iii) any limitation imposed by Federal, state, Korean or other foreign authorities on the extension of credit by lending institutions or on the exchange of foreign currencies which affects the Fund or the issuers of its portfolio securities, (iv) the commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States or Korea, or (v) other event or condition which, in the Board's judgment, would have a material adverse effect on the Fund or its shareholders if Shares tendered pursuant to the Offer were purchased; or (d) the Board determines that effecting the transaction would be inconsistent with applicable legal requirements or would constitute a breach of the Board's fiduciary duty owed to the Fund or its shareholders. The Board may modify these conditions in light of experience. The foregoing conditions are for the Fund's sole benefit and may be asserted by the Fund regardless of the circumstances giving rise to any such condition (including any action or inaction of the Fund), and any such condition may be waived by the Fund, in whole or in part, at any time and from time to time in its reasonable judgment. The Fund's failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts or circumstances; and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Fund concerning the events described in this Section 3 shall be final and binding. The Fund reserves the right, at any time during the pendency of the Offer, to amend, extend or terminate the Offer in any respect. See Section 15. 4. PROCEDURES FOR TENDERING SHARES. A. PROPER TENDER OF SHARES. For Shares to be properly tendered pursuant to the Offer, a shareholder must cause a properly completed and duly executed Letter of Transmittal bearing original signature(s) and the original of any required signature guarantee(s), and any other documents required by the Letter of Transmittal, to be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase and must either cause certificates for tendered Shares to be received by the Depositary at such address or cause such Shares to be delivered pursuant to the procedures for book-entry delivery set forth below (and confirmation of receipt of such delivery to be received by the Depositary), in each case before 5:00 p.m. Eastern time on the Expiration Date, or (in lieu of the delivery of such Share certificates prior to the Expiration Date) such shareholder must comply with the guaranteed delivery procedures set forth below. Letters of Transmittal and certificates representing tendered Shares should not be sent or delivered to the Fund. Shareholders who desire to tender Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact that firm to effect a tender on their behalf. Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder make it unlawful for any person, acting alone or in concert with others, directly or indirectly, to tender Shares in a partial tender offer for such person's own account unless at the time of tender, and at the time the Shares are accepted for payment, the person tendering has a net long position equal to or greater than the amount tendered in (a) Shares and will deliver or cause to be delivered such Shares for the purpose of tender to the Fund within the period specified in the Offer, or (b) an equivalent security and, upon the acceptance of his or her tender, will acquire Shares by conversion, exchange, or exercise of such equivalent security to the extent required by the terms of the Offer, and will deliver or cause to be delivered the Shares so acquired for the purpose of tender to the Fund prior to or on the Expiration Date. Section 14(e) and Rule 14e-4 provide a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The acceptance of Shares by the Fund for payment will constitute a binding agreement between the tendering shareholder and the Fund upon the terms and subject to the conditions of the Offer, including the tendering shareholder's 9 representation that the shareholder has a net long position in the Shares being tendered within the meaning of Rule 14e-4 and that the tender of such Shares complies with Rule 14e-4. B. SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee is required if (a) the Letter of Transmittal is signed by the registered holder(s) (including, for purposes of this document, any participant in The Depository Trust Company ("DTC") book-entry transfer facility whose name appears on DTC's security position listing as the owner of Shares) of the Shares tendered thereby, unless such holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" in the Letter of Transmittal or (b) the Shares tendered are tendered for the account of a firm (an "Eligible Institution") which is a broker, dealer, commercial bank, credit union, savings association or other entity and which is a member in good standing of a stock transfer association's approved medallion program (such as STAMP, SEMP or MSP). In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 2 of the Letter of Transmittal. If the Letter of Transmittal is signed by the registered holder(s) of the Shares tendered thereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s) for the Shares tendered without alteration, enlargement or any change whatsoever. If any of the Shares tendered thereby are owned of record by two or more joint owners, all such owners must sign the Letter of Transmittal. If any of the tendered Shares are registered in different names, it is necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations. If the Letter of Transmittal or any certificates for Shares tendered or stock powers relating to Shares tendered are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Fund of their authority so to act must be submitted. If the Letter of Transmittal is signed by the registered holder(s) of the Shares transmitted therewith, no endorsements of certificates or separate stock powers with respect to such Shares are required unless payment is to be made to, or certificates for Shares not purchased are to be issued in the name of, a person other than the registered holder(s). Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. If the Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed thereon, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificate(s) for the Shares involved. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. See subsection D of this Section 4. C. BOOK-ENTRY DELIVERY. The Depositary has established an account with respect to the Shares at DTC for purposes of the Offer. Any financial institution that is a participant in the DTC system may make book-entry delivery of tendered Shares by causing DTC to transfer such Shares into the Depositary's account at DTC in accordance with DTC's procedures for such transfers. However, although delivery of Shares may be effected through book-entry transfer into the Depositary's account at DTC, a Letter of Transmittal (or a copy or facsimile thereof) properly completed and bearing original signature(s) and the original of any required signature guarantee(s), or an Agent's Message (as defined below) in connection with a book-entry transfer and any other documents required by the Letter of Transmittal, must in any case be received by the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date at one of its addresses set forth on the back cover page of this Offer to Purchase, or the tendering shareholder must comply with the guaranteed delivery procedures described below. The term "Agent's Message" means a message from DTC transmitted to, and received by, the Depositary forming a part of a timely confirmation of a book-entry transfer of Shares (a "Book-Entry Confirmation") which states that (a) DTC has received an express acknowledgment from the DTC participant tendering the Shares that are the subject of the Book-Entry Confirmation, (b) the DTC participant has received and agrees to be bound by the terms of the Letter of Transmittal, and (c) the Fund may enforce such agreement against the DTC participant. Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the Depositary. D. GUARANTEED DELIVERY. Notwithstanding the foregoing, if a shareholder desires to tender Shares pursuant to the Offer and the certificates for the Shares to be tendered are not immediately available, or time will not permit the Letter of 10 Transmittal and all documents required by the Letter of Transmittal to reach the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date, or a shareholder cannot complete the procedures for delivery by book-entry transfer on a timely basis, then such shareholder's Shares nevertheless may be tendered, provided that all of the following conditions are satisfied: (a) the tender is made by or through an Eligible Institution; and (b) a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by the Fund is received by the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date; and (c) the certificates for all such tendered Shares, in proper form for transfer, or a Book-Entry Confirmation with respect to such Shares, as the case may be, together with a Letter of Transmittal (or a copy or facsimile thereof) properly completed and bearing original signature(s) and the original of any required signature guarantee(s) (or, in the case of a book-entry transfer, an Agent's Message) and any documents required by the Letter of Transmittal, are received by the Depositary prior to 5:00 p.m. Eastern time on the second NYSE trading day after the date of execution of the Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution and a representation that the shareholder owns the Shares tendered within the meaning of, and that the tender of the Shares effected thereby complies with, Rule 14e-4 under the Exchange Act, each in the form set forth in the Notice of Guaranteed Delivery. THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER. IF DOCUMENTS ARE SENT BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Shareholders have the responsibility to cause their Shares to be tendered (in proper certificated or uncertificated form), the Letter of Transmittal (or a copy or facsimile thereof) properly completed and bearing original signature(s) and the original of any required signature guarantee(s) and any other documents required by the Letter of Transmittal, to be timely delivered. Timely delivery is a condition precedent to acceptance of Shares for purchase pursuant to the Offer and to payment of the purchase amount. Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of Share certificates evidencing such Shares or a Book-Entry Confirmation of the delivery of such Shares (if available), a Letter of Transmittal (or a copy or facsimile thereof) properly completed and bearing original signature(s) and the original of any required signature guarantee(s) or, in the case of a book-entry transfer, an Agent's Message and any other documents required by the Letter of Transmittal. E. DETERMINATIONS OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, which determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined not to be in appropriate form or to refuse to accept for payment, purchase, or pay for, any Shares if, in the opinion of the Fund's counsel, accepting, purchasing or paying for such Shares would be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender, whether generally or with respect to any particular Share(s) or shareholder(s). The Fund's interpretations of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) shall be final and binding. NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE MANAGER, THE SUBADVISER, THE INFORMATION AGENT, THE DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR IRREGULARITY IN ANY TENDER, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE. F. UNITED STATES FEDERAL INCOME TAX WITHHOLDING. To prevent the imposition of a U.S. federal backup withholding tax equal to 28% of the gross payments made pursuant to the Offer, prior to such payments, each shareholder accepting the Offer who has not previously submitted to the Fund a correct, completed and signed Form W-9 (for U.S. Shareholders as defined below) or Form W-8BEN or other appropriate type of Form W-8 (for Non-U.S. 11 Shareholders as defined below), or otherwise established an exemption from such withholding, must submit the appropriate form and any other required documentation to the Depositary. See Section 13. Under certain circumstances (see Section 13), the Depositary will withhold a tax equal to 30% of the gross payments payable to a Non-U.S. Shareholder unless the Depositary determines that a reduced rate of withholding or an exemption from withholding is applicable. (Exemption from backup withholding tax does not exempt a Non-U.S. Shareholder from the 30% withholding tax.) For this purpose, a Non-U.S. Shareholder is any shareholder that is not a U. S. Shareholder. A U.S. Shareholder is, in general, a shareholder that is (i) an individual who is a citizen or resident of the United States, (ii) a corporation, partnership or other entity taxed as a corporation or partnership created or organized in or under the laws of the United States, any State thereof or the District of Columbia, (iii) an estate the income of which is subject to United States federal income taxation regardless of the source of such income, or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. The Depositary will determine a shareholder's status as a Non-U.S. Shareholder and the shareholder's eligibility for a reduced rate of, or an exemption from, withholding by reference to any outstanding Forms W-8BEN, W-8ECI, W-8IMY and W-8EXP and to any attachments to such forms, unless facts and circumstances indicate that such reliance is not warranted. A Non-U.S. Shareholder that has not previously submitted the appropriate type of Form W-8 with respect to a reduced rate of, or exemption from, withholding for which such shareholder may be eligible should consider doing so in order to avoid over-withholding. See Section 13. 5. WITHDRAWAL RIGHTS. At any time prior to 5:00 p.m. Eastern time on the Expiration Date, and, if the Shares have not by then been accepted for payment by the Fund, at any time after March 19, 2004, any shareholder may withdraw all, but not less than all, of the Shares that the shareholder has tendered. To be effective, a written notice of withdrawal of Shares tendered must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer. Shareholders may also send a facsimile transmission notice of withdrawal, which must be timely received by the Depositary by 5:00 p.m., February 23, 2004, and the original notice of withdrawal must be delivered to the Depositary by overnight courier or by hand the next day. Any notice of withdrawal must specify the name(s) of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn (which may not be less than all of the Shares tendered by the shareholder) and, if one or more certificates representing such Shares have been delivered or otherwise identified to the Depositary, the name(s) of the registered owner(s) of such Shares as set forth in such certificate(s) if different from the name(s) of the person tendering the Shares. If one or more certificates have been delivered to the Depositary, then, prior to the release of such certificate(s), the certificate number(s) shown on the particular certificate(s) evidencing such Shares must also be submitted and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. All questions as to the validity, form and eligibility (including time of receipt) of notices of withdrawal will be determined by the Fund in its sole discretion, which determination shall be final and binding. Shares properly withdrawn will not thereafter be deemed to be tendered for purposes of the Offer. Withdrawn Shares, however, may be re-tendered by following the procedures described in Section 4 prior to 5:00 p.m. Eastern time on the Expiration Date. Except as otherwise provided in this Section 5, tenders of Shares made pursuant to the Offer will be irrevocable. NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE MANAGER, THE SUBADVISER, THE INFORMATION AGENT, THE DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR IRREGULARITY IN ANY NOTICE OF WITHDRAWAL, NOR SHALL ANY OF THEM INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE. 6. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be deemed to have accepted for payment and purchased Shares that are tendered (and not withdrawn in accordance with Section 5 pursuant to the Offer) when, as and if it gives oral or written notice to the Depositary of its acceptance of such Shares for payment pursuant to the Offer. Under the Exchange Act, the Fund is obligated to pay for or return tendered Shares promptly after the termination, expiration or withdrawal of the Offer. Upon the terms and subject to the conditions of the Offer, the Fund will pay for Shares properly tendered as soon as practicable after the Expiration Date. The Fund will make payment for Shares purchased pursuant to the Offer by depositing the aggregate purchase price therefor with the Depositary, which will make payment to shareholders promptly as directed by the Fund. Upon the deposit of funds with the Depositary for the purpose of making payment to validly tendering shareholders, the Fund's obligation to make such payment shall be satisfied and such tender shareholders must thereafter look solely to the Depositary for payment of the amounts owed to them by 12 reason of the acceptance of the Shares pursuant to the Offer. The Fund will not pay interest on the purchase price under any circumstances. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of: - a Letter of Transmittal (or a copy thereof) properly completed and duly executed and any required signature guarantee(s), or an Agent's Message in connection with a book-entry transfer; - certificate evidencing Shares or timely confirmation of a book-entry transfer of such Shares into the Depositary's account at DTC pursuant to the procedure set forth in Section 4; and - any other documents required by the Letter of Transmittal. Shareholders may be charged a fee by a broker, dealer or other institution for processing the tender requested. Certificates representing Shares tendered but not purchased will be returned promptly following the termination, expiration or withdrawal of the Offer, without further expense to the tendering shareholder. The Fund will pay any transfer taxes payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, tendered Shares are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of any such transfer taxes (whether imposed on the registered owner or such other person) payable on account of the transfer to such person of such Shares will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. The Fund may not be obligated to purchase Shares pursuant to the Offer under certain conditions. See Section 3. Any tendering shareholder or other payee who has not previously fully completed and signed the appropriate type of Form W-8 or Form W-9, as necessary, and who fails to complete fully and sign either the appropriate type of Form W-8 or Substitute Form W-9 in the Letter of Transmittal and provide that form to the Depositary, may be subject to federal backup withholding tax of 28% of the gross proceeds paid to such shareholder or other payee pursuant to the Offer. See Section 13 regarding this tax as well as possible withholding at the rate of 30% (or lower applicable treaty rate) on the gross proceeds payable to tendering Non- U.S. shareholders. 7. SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The actual cost of the Offer to the Fund cannot be determined at this time because the number of Shares to be purchased will depend on the number tendered, and the price will be based on the NAV per Share on the business day after the Expiration Date. If the NAV per Share on the business day after the Expiration Date were $22.63, which was the NAV per Share on January 20, 2004, and if shareholders tender 10% of the Fund's outstanding Shares pursuant to the Offer, the estimated payments by the Fund to the shareholders would be approximately $106,781,685. See the Pro Forma Capitalization table below. The Fund anticipates that it will obtain the cash necessary to pay the aggregate purchase price on Shares accepted for payment pursuant to the Offer through the Fund's holdings of cash and the sale of portfolio securities. The selection of which portfolio securities to sell will be made by the Manager, taking into account investment merit, relative liquidity and applicable investment restrictions and legal requirements. Because the Fund may sell portfolio securities to raise cash for the purchase of Shares, during the pendency of the Offer, and possibly for a short time thereafter, the Fund may hold a greater than normal percentage of its assets in cash and cash equivalents, which may effect the Fund's investment performance. The Fund may also realize taxable gain upon the sale of such securities, which may increase the taxable distribution to the shareholders with respect to the current fiscal year. It is not possible to predict the amount of taxable gain the Fund will recognize in liquidating portfolio securities. As of January 20, 2004, cash and cash equivalents constituted approximately 0.08% of the Fund's total assets. Although the Fund is authorized to borrow money to finance the purchase of Shares, the Board believes that the Fund will have sufficient resources through cash on hand and the disposition of assets to purchase Shares in the Offer without utilizing such borrowing. However, the Fund reserves the right to finance a portion of the Offer through temporary borrowing. The Fund is authorized to borrow money for temporary or emergency purposes, and to the extent the Fund does not have sufficient resources through cash on hand and the disposition of portfolio securities to purchase Shares in the Offer, it intends to finance a portion of the Offer through temporary borrowing. The Fund and other investment companies or portfolios thereof advised by the Manager are parties to a $1.3 billion revolving credit facility (the "Facility") administered by J.P. Morgan Chase Bank. The Facility is intended primarily to cover temporary or 13 emergency needs of the Funds that otherwise might require the untimely disposition of securities. The participants in the Facility are charged an annual commitment fee which is allocated, pro rata based upon net assets, among each of the participants. Interest is calculated at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 5% of its net assets under the Facility. The amounts available to be drawn down by the Fund under the Facility will depend upon the level of borrowings by other funds that are parties to the Facility, and accordingly it is possible that the Fund may not be able to borrow under the Facility the amounts desired. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON- TENDERING SHAREHOLDERS. EFFECT ON NAV AND CONSIDERATION RECEIVED BY TENDERING SHAREHOLDERS. If the Fund were required to sell a substantial amount of portfolio securities to raise cash to finance the Offer, the market prices of portfolio securities being sold and/or the Fund's remaining portfolio securities may decline and hence the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the business day after the Expiration Date, if such a decline continued up to the business day after the Expiration Date, the consideration received by tendering shareholders would be reduced. In addition, the sale of portfolio securities will cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of portfolio securities less than their valuations by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, thereby reducing the amount of proceeds received by tendering shareholders and the NAV per Share for non-tendering shareholders. Shareholders should note, however, that the Offer may result in accretion to the Fund's NAV per Share following the Offer, due to the fact that the purchase price represents a 5% discount to the Fund's NAV per Share. The potential accretion to the Fund's NAV per Share may offset in whole or in part any decline in the Fund's NAV as discussed above. The Fund will likely sell portfolio securities during the pendency of the Offer to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. The Fund will pay for tendered Shares it accepts for payment promptly after the Expiration Date of this Offer. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. If on or prior to the Expiration Date the Fund does not have, or believes it is unlikely to have, sufficient cash to pay for all Shares tendered, it may extend the Offer to allow additional time to sell portfolio securities and raise sufficient cash. RECOGNITION OF CAPITAL GAINS BY THE FUND. As noted in Section 7, the Fund expects that it will sell portfolio securities to finance the Offer and that it will likely recognize gains on the sale of those securities. As noted in Section 11, realized gains are excluded from the limit on repatriation of investment principal in the Fund's license from the Korean Minister of Finance and Economy. Under the Internal Revenue Code, in order to avoid the imposition of income and excise taxes on the Fund, the Fund is generally required to distribute to its shareholders each year substantially all of its "investment company taxable income" (which includes ordinary income and net short term capital gains) and net long term capital gains for the year. It is likely that Fund's purchase of shares pursuant to the Offer will be treated for U.S. federal income tax purposes as a sale of shares by the tendering shareholders and not as a distribution by the Fund that would satisfy the annual distribution requirement. See the discussion in Section 13. As a result, if the Fund realizes substantial gains on the disposition of portfolio securities to fund the purchase of shares, the Fund will likely be required to increase the amount of its taxable distributions to shareholders with respect to the current year. The Fund expects that any such distribution will be declared by the Board in December, 2004 and distributed to shareholders in January, 2005, in accordance with the Fund's regular practice. If there is such a recognition and distribution of gains, the Fund's shareholders on the record date for the distribution would be required to pay taxes on a greater amount of income and capital gain distributions than otherwise would be the case. In addition, to raise cash to make the distribution, the Fund might need to sell additional portfolio securities, which could require the Fund to realize and recognize additional capital gains. It is not possible to predict the amount of capital gains or losses that will be recognized by the Fund on the sale of portfolio securities to finance the purchase of shares pursuant to the Offer. As of December 31, 2003, the Fund had unrealized gains of approximately $565 million, unrealized losses of approximately $35 million, net unrealized gains of approximately $530 million and approximately $8.5 million of loss carryforwards. 14 In addition, some of the distributed gains may be realized on securities held for one year or less, which could generate income taxable to the non-tendering shareholders (or shareholders who sell less than all of their Shares) at ordinary income rates. This could adversely affect the Fund's after-tax performance. TAX CONSEQUENCES OF REPURCHASES TO STOCKHOLDERS. The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering shareholders and may have tax consequences for non-tendering shareholders. See Section 13. HIGHER EXPENSE RATIO AND LESS INVESTMENT FLEXIBILITY. If the Fund purchases a substantial number of Shares pursuant to the Offer, the net assets of the Fund will be reduced accordingly. The reduced net assets of the Fund as a result of the Offer will result in a higher expense ratio for the Fund and possibly in less investment flexibility for the Fund, depending on the number of Shares repurchased. PRO FORMA EFFECTS ON CAPITALIZATION. The purchase by the Fund of its own Shares will reduce the Fund's net assets (that is, its assets less its liabilities). The following table sets forth the net assets of the Fund as of January 20, 2004, adjusted to give effect to the offer (excluding expenses and assuming the Fund repurchases 10% of its outstanding Shares): PRO FORMA CAPITALIZATION(1)
AS OF ADJUSTMENT FOR JANUARY 20, PURCHASE AT $21.50 PRO FORMA AS 2004 PER SHARE(2) ADJUSTED -------------- ------------------ -------------- Total net assets....................................... $1,123,714,213 $(106,781,685) $1,016,932,528 Shares outstanding..................................... 49,665,902 (4,966,590) 44,699,312 NAV per Share(3)....................................... $ 22.63 $ 21.50 $ 22.75
- --------------- (1) This table assumes purchase by the Fund of 4,966,590 Shares, equal to 10% of the Fund's outstanding Shares as of January 20, 2004, and no borrowing by the Fund to finance the purchase. (2) This amount represents 95% of the Fund's NAV as determined on January 20, 2004. Shares tendered pursuant to the Offer will be purchased at a 5% discount to NAV on the business day after the Expiration Date, which may be more or less than $21.50 per Share, and the pro forma NAV per Share also may be more or less than that shown above. (3) The NAV per Share of the Fund is determined as of the close of regular trading on the NYSE no less frequently than weekly, at such times as the Board of Directors may determine, and on the last business day of each month the NYSE is open, by dividing the total assets of the Fund, less all liabilities, by the total number of Shares outstanding. EFFECTS OF PURCHASES OF SHARES UNDER THE PROGRAM. The purchase of Shares in tender offers under the Program may have similar effects to the effects of the Offer described above in this Section 7, including recognition of capital gain and tax consequences (although if the Fund elects to pay for tendered Shares with portfolio securities rather than cash, it may seek a tax ruling to the effect that the distribution of portfolio securities to repurchase its shares will not result in realization of gain by the Fund), higher expense ratio and less investment flexibility, and pro forma effects on capitalization. 15 8. PRICE RANGE OF SHARES; DIVIDENDS/DISTRIBUTIONS. The following table sets forth, for the periods indicated, the high and low NAVs per Share and the high and low closing sale prices per Share as reported on the NYSE Composite Tape, and the amounts of cash dividends/distributions per Share paid during such periods.
NET ASSET VALUE MARKET PRICE --------------- ------------- DIVIDENDS/ HIGH LOW HIGH LOW DISTRIBUTIONS ------ ------ ----- ----- ------------- Year (ending December 31) 2001(4) 1st Quarter....................................... 13.85 11.12 11.55 9.00 $1.4064 2nd Quarter....................................... 13.58 10.53 10.99 8.52 0.0150 3rd Quarter....................................... 13.10 10.74 10.69 8.61 0.0000 4th Quarter....................................... 16.10 11.02 13.22 8.91 0.1200 2002 1st Quarter....................................... 20.94 16.35 17.69 13.66 0.0000 2nd Quarter....................................... 22.40 19.15 18.80 16.00 0.0000 3rd Quarter....................................... 21.68 17.49 17.50 13.49 0.0000 4th Quarter....................................... 19.56 15.73 15.99 12.45 0.8510 2003 1st Quarter....................................... 17.52 13.17 14.26 11.36 0.0000 2nd Quarter....................................... 18.07 13.50 15.46 11.70 0.0000 3rd Quarter....................................... 20.26 17.80 17.11 15.00 0.0000 4th Quarter....................................... 21.32 18.74 18.35 15.52 0.3000
- --------------- (4) $70.3 million of the 2001 dividends represent the value of a special in-kind distribution of SK Telecom securities. As of the close of business on January 20, 2004, the Fund's NAV was $22.63 per Share, and the high, low and closing prices per Share on the NYSE on that date were $20.10, $19.95 and $19.96, respectively. Prior to the expiration of the Offer, NAV quotations can be obtained in the manner indicated in Section 1. The tendering of Shares, unless and until Shares tendered are accepted for payment and purchase, will not affect the record ownership of any such tendered Shares for purposes of entitlement to any dividends payable by the Fund. 16 9. SELECTED FINANCIAL INFORMATION. The table below is intended to help you understand the financial performance of the Fund. This information, except as indicated, has been derived from audited financial statements of the Fund, which are incorporated herein by reference and included in the Fund's Annual Report to shareholders. The Annual and Semi-Annual Reports may be obtained without charge, by writing to Georgeson Shareholder Communications, Inc., the Information Agent, 17 State Street, New York, New York 10004, by calling (800) 843-0369 or on the Internet at www.sec.gov or www.thekoreafund.com. FINANCIAL HIGHLIGHTS The following table includes per share operating performance data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data for each period indicated. This information has been derived from information provided in the financial statements and market price data for the Fund's Shares. FINANCIAL HIGHLIGHTS
YEARS ENDED JUNE 30. 2003 2002 2001 2000 1999 - -------------------- ------ ------ ------- ------ ------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of period.............. $20.20 $13.01 $ 20.04 $17.72 $ 5.63 Income (loss) from Investment operations.......... Net investment income (loss)(a)................. .17 .11 .17 .05 .04 Net realized and unrealized gain (loss) on investment transactions...................... (1.90) 7.20 (5.61) 2.27 12.05 Total from investment operations................ (1.73) 7.31 (5.44) 2.32 12.09 Less distributions from: Net investment income........................... (.18) -- (.18) -- -- Net realized gains on investment transactions... (.67) (.12) (1.41) -- -- Total distributions............................. (.85) (.12) (1.59) -- -- Antidilution (dilution) resulting from repurchases and reinvestment of distributions for shares at value........................................... .00(b) .00(b) -- -- -- Net asset value, end of period.................... $17.52 $20.20 $ 13.01 $20.04 $ 17.72 Market value, end of period....................... $14.99 $16.44 $ 10.58 $14.05 $ 14.88 TOTAL RETURN Per share net asset value (%)(c).................. (8.34) 56.39 (25.01) 13.09 214.74 Per share market value (%)(c)..................... (4.29) 56.71 (13.16) (5.46) 135.64 RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA Net assets, end of period ($ millions)............ 879 1,009 561 1,002 886 Ratio of expenses before expense reductions (%)... 1.26 1.21 1.24 1.20 1.36 Ratio of expenses after expense reductions (%).... 1.26 1.21 1.23 1.19 1.36 Ratio of net Investment Income (loss) (%)......... .99 .69 1.18 .24 .37 Portfolio turnover rate (%)....................... 7 18 40 31 10
- --------------- (a) Based on average shares outstanding during the period. (b) Amount is less than $.005 per share. (c) Total return based on net asset value reflects changes in the Fund's net asset value during the period. Total return based on market value reflects changes in market value. Each figure includes reinvestments of distributions. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund's shares trade during the period. 17 SUMMARY OF SELECTED FINANCIAL INFORMATION FOR THE PERIODS INDICATED BELOW
YEAR ENDED YEAR ENDED YEAR ENDED JUNE 30, JUNE 30, JUNE 30, 2003 2002 2001 ------------ -------------- ------------- (AUDITED) (AUDITED) (AUDITED) STATEMENT OF OPERATIONS INVESTMENT INCOME........................................... $ 19,480,512 $ 15,524,235 $ 17,003,793 ------------ -------------- ------------- EXPENSES.................................................... 10,912,038 9,971,639 8,759,667 Less: fees waived by Investment Adviser................... 25,997 53,600 82,745 ------------ -------------- ------------- Net Expenses................................................ 10,886,041 9,918,039 8,676,922 ------------ -------------- ------------- Net investment income....................................... 8,594,471 5,606,196 8,326,871 ------------ -------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS: Net realized gain on: Investments............................................ (14,779,335) 35,204,628 92,535,212 Futures contracts...................................... Foreign currency transactions.......................... 2,519,855 2,542,733 (9,492,788) Net change in unrealized appreciation/depreciation of: Investments............................................ (80,479,942) 318,735,886 (363,522,823) Futures contracts...................................... Foreign currency transactions.......................... (2,624,557) 2,903,356 82,898 ------------ -------------- ------------- Net realized and unrealized loss on investments, futures contracts and foreign currency transactions............ (95,353,979) 359,386,603 (363,439,975) ------------ -------------- ------------- NET DECREASE IN NET ASSETS FROM INVESTMENT OPERATIONS....... (86,759,508) 364,992,799 (272,070,630) ============ ============== ============= STATEMENT OF ASSETS AND LIABILITIES Total Assets.............................................. 880,321,849 1,010,855,407 661,334,509 Total Liabilities......................................... 31,679,413 1,974,679 10,781,316 ------------ -------------- ------------- Net Assets................................................ 878,642,436 1,008,880,728 650,553,193 ------------ -------------- ------------- Net asset value per share................................. 17.62 20.20 13.01
18 SUMMARY OF ANNUAL NAV DISCOUNTS AND PREMIUMS Shares have traded at varying relationships to per Share net asset value. The following table shows the relationship between price on the New York Stock Exchange and net asset value per Share for the years indicated:
PREMIUM OR DISCOUNT AS A PERCENTAGE ----------------------------------------------------- YEAR AVERAGE HIGH LOW - ---- ------- ------------------ ------------------- 1991............................ 33.78% 54.92% (8/30/91) 15.57% (1/4/91) 1992............................ 16.45 45.88 (11/20/92) -1.2 (5/22/92) 1993............................ 28.26 44.14 (12/31/93) 10.27 (12/17/93) 1994............................ 17.04 37.04 (1/7/94) -2.8 (12/9/94) 1995............................ 4.15 13.52 (5/26/95) -5.15 (6/16/95) 1996............................ 9.92 68.23 (1/3/96) 2.08 (6/7/96) 1997............................ 7.89 38.39 (12/12/97) -17.69 (11/14/97) 1998............................ 11.13 56.96 (1/2/98) -3.44 (12/31/98) 1999............................ -16.07 3.75 (1/15/99) -29.12 (12/22/99) 2000............................ -27.96 -17.44 (12/29/00) -35.48 (6/6/00) 2001............................ -18.01 -12.7 (1/3/01) -21.74 (9/19/01) 2002............................ -18.15 -11.61 (3/1/02) -24.16 (9/23/02) 2003............................ -16.04 -12.41 (6/6/03) -20.45 (11/20/03)
10. INTEREST OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN RELATED PERSONS. Information, as of particular dates, concerning the Fund's directors and executive officers, their remuneration, any material interest of such persons in transactions with the Fund and other matters is required to be disclosed in proxy statements distributed to the Fund's shareholders and filed with the Commission. The table below sets forth the number of Shares and percentage of outstanding Shares beneficially owned by the directors and officers of the Fund as of January 21, 2004.
NUMBER OF SHARES NAME AND POSITION BENEFICIALLY OWNED - ----------------- ------------------ Robert J. Callander, Director*.............................. 2500 Kenneth C. Froewiss, Director*.............................. 1000 William H. Luers, Director*................................. 475 Ronaldo A. da Frota Nogueira, Director*..................... 4000 Susan Kaufman Purcell, Director*............................ 175 Kesup Yun, Director......................................... 0 Richard T. Hale, Chairman, Director and President*.......... 1000 John J. Lee, Vice President................................. 0 John Millette, Vice President and Secretary................. 0 Charles A. Rizzo, Treasurer and Chief Financial Officer..... 0 Kate Sullivan D'Eramo, Assistant Treasurer.................. 0 Salvatore Schiavone, Assistant Treasurer.................... 0 Lucinda H. Stebbins, Assistant Treasurer.................... 0 Caroline Pearson, Assistant Secretary....................... 0 Bruce A. Rosenblum, Vice President and Assistant Secretary................................................. 0 ---- 9150
- --------------- * Percentage of shares beneficially owned equal less than 1/4 of 1% of Shares of the Fund. The total percentage of shares beneficially owned by all directors and executive officers equal less than 1/4 of 1% of Shares of the Fund. Except for repurchases by the Fund in the open market shown below, the Fund nor, to the best of the Fund's knowledge, any of the Fund's directors or officers, or associates of any of the foregoing, has effected any transaction in 19 Shares, except for dividend reinvestment, during the past 60 days. Except as set forth in this Offer to Purchase, neither the Fund, nor, to the best of the Fund's knowledge, any of the Fund's directors or officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly to the Offer with respect to any securities of the Fund, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations. None of the Fund's directors or officers intend to tender their Shares pursuant to the Offer. Based upon information provided or available to the Fund, no other director, officer or affiliate of the Fund intends to tender Share pursuant to the Offer. The Offer does not, however, restrict the purchase of Shares pursuant to the Offer from any such person. During the 60 days prior to the date of this Offer to Purchase, the Fund effected repurchases of Shares in the open market as set forth below:
DATE SHARES PURCHASED AVERAGE COST PER SHARE - ---- ---------------- ---------------------- November 24, 2003........................................... 2000 16.44 December 1, 2003............................................ 2000 17.35 December 3, 2003............................................ 2000 17.30 December 4, 2003............................................ 2000 17.24 December 5, 2003............................................ 2000 16.86 December 8, 2003............................................ 2000 16.90 December 9, 2003............................................ 2000 16.80 December 10, 2003........................................... 2000 16.92 December 11, 2003........................................... 2000 17.03 December 12, 2003........................................... 2000 17.35 December 15, 2003........................................... 2000 17.65 December 16, 2003........................................... 2000 17.51 December 17, 2003........................................... 2000 17.38 December 18, 2003........................................... 2000 17.63 December 19, 2003........................................... 2000 17.67 December 22, 2003........................................... 2000 17.54 December 23, 2003........................................... 2000 17.50 December 24, 2003........................................... 2000 17.57 December 26, 2003........................................... 2000 17.58 January 2, 2004............................................. 2000 18.58 January 5, 2004............................................. 2000 18.83
11. CERTAIN INFORMATION ABOUT THE FUND. The Fund is a Maryland corporation with its principal executive offices located at 345 Park Avenue, New York, NY 10154 (telephone number (800) 349-4281). The Fund is a closed-end, diversified, management investment company. The Fund first issued Shares to the public on August 22, 1984. The Fund operates under a license issued by the Korean Minister of Finance and Economy to invest in Korean securities and to repatriate income received from dividends and interest earned on, and net realized capital gain from, its investments in Korean securities or to repatriate from investment principal up to 10% of the net asset value (taken at current value) of the Fund (except upon termination of the Fund, or for expenses in excess of Fund income, in which case the foregoing restriction shall not apply). "Investment principal" is to be determined in accordance with U.S. generally accepted accounting principles and means amounts raised by the Fund in selling its shares, plus unrealized capital appreciation, but excluding realized capital gains and income. The license does not limit the repatriation of realized capital gain and income from the Fund's investment in Korean securities. Under the license, the Fund -- unlike unlicensed investors in Korea -- is not subject to Korean securities transaction tax payable on the sale of portfolio securities. As a closed-end investment company, the Fund differs from an open-end investment company (i.e., a mutual fund) in that it does not redeem its Shares at the election of a shareholder and does not continuously offer its Shares for sale to the public. The Fund's investment objective is long-term capital appreciation through investment in Korean equity securities. 20 The Manager is a corporation organized under the laws of Delaware and a registered investment adviser under the Investment Advisers Act of 1940, as amended. The Manager and its predecessors have served as investment manager to the Fund since its inception. The Manager's principal business address is 345 Park Avenue, New York, NY 10154. The Manager is part of Deutsche Asset Management. Deutsche Asset Management is the marketing name in the United States for the asset management activities of Deutsche Bank AG, The Manager, Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Bank Trust Company Americas and Scudder Trust Company. Deutsche Asset Management is a global asset management organization with over $685 billion in assets under management as of September 30, 2003. The Manager is an indirect wholly-owned subsidiary of Deutsche Bank AG. Deutsche Bank AG is a global banking institution engaged in financial services, including investment management, mutual fund, retail, private and commercial banking, investment banking and insurance. The Manager, the predecessor of which is Scudder, Stevens & Clark, Inc. ("Scudder"), is an investment counseling firm established as a partnership in 1919. Scudder reorganized from a partnership to a corporation on June 28, 1985. On December 31, 1997, Zurich Insurance Company ("Zurich") acquired a majority interest in Scudder, and Zurich Kemper Investments, Inc., a Zurich subsidiary, became part of Scudder. Scudder's name changed to Scudder Kemper Investments, Inc. On January 1, 2001, the Manager changed its name from Scudder Kemper Investments, Inc. to Zurich Scudder Investments, Inc. On April 5, 2002, 100% of the Manager was acquired by Deutsche Bank AG. Upon the closing of the transaction, the Manager changed its name from Zurich Scudder Investments, Inc. to Deutsche Investment Management Americas Inc. The Subadviser is a wholly-owned subsidiary of Deutsche Bank A. G. The address of the Subadviser is 3rd Floor, Seian Building, 116 Shinmoonro-1 Ka, Changro-ku, Seoul, Korea. The Subadviser is registered with an investment adviser under the Investment Advisers Act of 1940, as amended, and began serving as Subadviser to the Fund on July 9, 2002. The Subadviser renders investment advisory and management services with regards to that portion of the Fund's portfolio allocated to it by the Manager. 12. ADDITIONAL INFORMATION. An Issuer Tender Offer Statement on Schedule TO (the "Schedule TO") including the exhibits thereto, filed with the Commission, provides certain additional information relating to the Offer, and may be inspected and copied at the prescribed rates at the Commission's public reference facilities at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, 233 Broadway, New York, New York 10279 and Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of the Schedule TO and the exhibits may also be obtained by mail at the prescribed rates from the Public Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. The Fund's filings are also available to the public in the Commission's website (www.sec.gov). 13. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following discussion is a general summary of the U.S. federal income tax consequences of a sale of Shares pursuant to the Offer based on current U.S. federal income tax law, including the Internal Revenue Code of 1986, as amended (the "Code"), applicable Treasury regulations and Internal Revenue Service rulings. Each shareholder should consult his or her own tax adviser for a full understanding of the tax consequences of such a sale, including potential state, local and foreign taxation by jurisdictions of which the shareholder is a citizen, resident or domiciliary. U.S. SHAREHOLDERS. It is anticipated that U.S. Shareholders as defined in Section 4.F (other than tax-exempt persons) who sell Shares pursuant to the Offer will generally recognize gain or loss for U.S. federal income tax purposes equal to the difference between the amount of cash they receive pursuant to the Offer and their adjusted tax basis in the Shares sold. The sale date for tax purposes will be the date the Fund accepts Shares for purchase. This gain or loss will be capital gain or loss if the Shares sold are held by the tendering U.S. Shareholder at the time of sale as capital assets and will be treated as either long-term or short-term if the Shares have been held at that time for more than one year or for one year or less, respectively. Gain or loss must be calculated separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) sold pursuant to the Offer. Any such long-term capital gain realized by a non-corporate U.S. Shareholder will be taxed at a maximum rate of 15%. The foregoing U.S. federal income tax treatment is based on the assumption that not all shareholders will tender their Shares pursuant to the Offer and that the continuing ownership interest in the Fund of each tendering shareholder (including shares constructively owned by such tendering shareholder pursuant to the provisions of Section 318 of the Code) will be sufficiently reduced to qualify the sale as a sale rather than a distribution for U.S. federal income tax 21 purposes, pursuant to Section 302(b) of the Code. It is therefore possible that the cash received for the Shares purchased by the Fund would be taxable to a U.S. Shareholder as a distribution by the Fund, rather than as a gain from the sale of the Shares. In that event, the cash received by a U.S. Shareholder will be taxable as a dividend to the extent of the U.S. Shareholder's allocable share of the Fund's current or accumulated earnings and profits, with any excess of the cash received over the portion so taxable as a dividend constituting a non-taxable return of capital to the extent of the U.S. Shareholder's tax basis in the Shares sold and with any remaining excess of such cash being treated as either long-term or short-term capital gain from the sale of the Shares (if the Shares are held as capital assets) depending on how long they were held by the U.S. Shareholder. If the tender is treated as a distribution by the Fund rather than a sale of shares, any cash treated as a dividend may, in the case of a U.S. Shareholder that is an individual and meets certain holding period and other requirements, qualify as "qualified dividend income" eligible for the reduced maximum federal tax rate of 15% (5% for individuals in the 15% bracket) to the extent that the Fund receives "qualified dividend income." Qualified dividend income is, in general, dividend income from taxable U.S. corporations and certain foreign corporations (e.g., generally, foreign corporations incorporated in certain countries with a comprehensive tax treaty with the United States, or the stock of which is readily tradable on an established securities market in the United States). Dividends received by the Fund from non-passive Korean corporations will generally qualify as "qualified dividend income." Any cash treated as a dividend that does not qualify for the reduced rate will be taxable to a U.S. Shareholder at the regular maximum federal tax rate of up to 35%. If cash received by a U.S. Shareholder is taxable as a distribution, the shareholder's remaining tax basis in the purchased Shares will be added to the tax basis of the Shares that the shareholder continues to hold following completion of the Offer. In addition, if a tender of Shares is treated as a distribution to a tendering shareholder, a constructive dividend under Section 305(c) of the Code may result to non-tendering shareholders whose proportionate interest in the Fund have been increased. Under the "wash sale" rules under the Code, loss recognized on Shares sold pursuant to the Offer will ordinarily be disallowed to the extent the U.S. Shareholder acquires Shares within 30 days before or after the date the tendered Shares are purchased pursuant to the Offer and, in that event, the basis and holding period of the Shares acquired will be adjusted to reflect the disallowed loss. The Depositary may be required to withhold 28% of the gross proceeds paid to a U.S. Shareholder or other payee pursuant to the Offer unless either: (a) the U.S. Shareholder has completed and submitted to the Fund or the Depositary an IRS Form W-9 (or Substitute Form W-9), providing the U.S. Shareholder's employer identification number or social security number, as applicable, and certifying under penalties of perjury that: (i) such number is correct; (ii) either (A) the U.S. Shareholder is exempt from backup withholding, (B) the U.S. Shareholder has not been notified by the Internal Revenue Service that the U.S. Shareholder is subject to backup withholding as a result of an under-reporting of interest or dividends, or (C) the Internal Revenue Service has notified the U.S. Shareholder that the U.S. Shareholder is no longer subject to backup withholding; or (b) an exception applies under applicable law. A Substitute Form W-9 is included as part of the Letter of Transmittal for U.S. Shareholders. NON-U.S. SHAREHOLDERS. The U.S. federal income taxation of a Non-U.S. Shareholder (i.e., any shareholder that is not a U.S. Shareholder as defined above) on a sale of Shares pursuant to the Offer depends on whether such transaction is "effectively connected" with a trade or business carried on in the U.S. by the Non-U.S. Shareholder as well as the tax characterization of the transaction as either a sale of the Shares or a distribution by the Fund, as discussed above for U.S. Shareholders. If the sale of Shares pursuant to the Offer is not so effectively connected and gives rise to taxable gain or loss, any gain realized by a Non-U.S. Shareholder upon the tender of Shares pursuant to the Offer will not be subject to U.S. federal income tax, provided, however, that such a gain will be subject to U.S. federal income tax at the rate of 30% (or such lower rate as may be applicable under a tax treaty) if the Non-U.S. Shareholder is a non-resident alien individual who is physically present in the United States for more than 182 days during the taxable year of the sale. If, however, the cash received by a tendering Non-U.S. Shareholder is treated for U.S. tax purposes as a distribution by the Fund, the portion of the distribution treated as a dividend to the Non-U.S. Shareholder would be subject to a U.S. tax which may be withheld at the rate of 30% (or such lower rate as may be applicable under a tax treaty) if the dividend does not constitute effectively connected income. If the amount realized on the tender of Shares by a Non-U.S. Shareholder is effectively connected income, regardless of whether the tender is characterized as a sale or as giving rise to a distribution from the Fund for U.S. federal income tax purposes, the transaction will be treated and taxed in the same manner as if the Shares involved were tendered by a U.S. Shareholder. 22 Non-U.S. Shareholders that have not previously submitted the appropriate type of Form W-8 to the Fund should provide the Depositary with a completed IRS Form W-8BEN or the appropriate type of Form W-8 in order to avoid backup withholding on the cash they receive from the Fund regardless of how they are taxed with respect to their tendered Shares. Copies of Form W-8BEN are provided with the Letter of Transmittal for Non-U.S. Shareholders. Other types of Form W-8 can be found on the IRS website at www.irs.gov/formspubs/index.html. 14. CERTAIN LEGAL MATTERS: REGULATORY APPROVALS. The Fund operates under a license issued by the Korean Minister of Finance and Economy and referred to in Section 11. As described in Section 11, the license includes a restriction on repatriation of more than 10% of investment principal. This excludes income and realized capital gains, including gains realized from selling appreciated securities as part of the financing of this Offer. The Fund is not aware of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Fund as contemplated in this Offer. Should any such approval or other action be required, the Fund presently contemplates that such approval or other action will be sought. The Fund is unable to predict whether it may determine that it is required to delay the acceptance for payment of, or payment for, Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Fund's business. The Fund's obligations under the Offer to accept for payment and pay for Shares are subject to certain conditions described in Section 3. 15. AMENDMENTS; EXTENSION OF TENDER PERIOD; TERMINATION. Subject to the applicable rules and regulations of the Commission, the Fund expressly reserves the right, in its sole discretion, at any time and from time to time, to extend the period during which the Offer is open for any reason, including the failure to satisfy any of the conditions specified in Section 3 and thereby delay acceptance for payment of, and payment for, any Shares, by giving oral or written notice of such extension to the Depositary. There can be no assurance that the Fund will exercise its right to extend the Offer. During any such extension, all Shares previously tendered and not properly withdrawn will remain subject to the Offer, subject to the rights of a tendering shareholder to withdraw such shareholder's Shares. See Section 5. Subject to the applicable rules and regulations of the Commission, the Fund also expressly reserves the right, in its sole discretion, at any time and from time to time, to (1) terminate the Offer and not accept for payment (or pay for) any Shares if any of the conditions referred to in Section 3 has not been satisfied or upon the occurrence and during the continuance of any of the events specified in Section 3 and (2) waive any condition or amend the Offer in any respect, in each case by giving oral or written notice of termination, waiver or amendment to the Depositary and by making a public announcement thereof. The Fund acknowledges (a) that Rule 14e-1(c) under the Exchange Act requires the Fund to pay the consideration offered or return the Shares tendered promptly after the termination or withdrawal of the Offer and (b) that the Fund may not delay acceptance for payment of, or payment for, any Shares upon the occurrence of any of the conditions specified in Section 3 without extending the period during which the Offer is open. Any extension, termination or amendment will be followed as promptly as practicable by a public announcement thereof, such announcement, in the case of an extension, to be made no later than 9:00 a.m. Eastern time on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Fund may choose to make any public announcement, except as provided by applicable law (including Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to holders of Shares), the Fund will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a release to the PR Newswire. If the Fund makes a material change in the terms of the Offer or the information concerning the Offer, or waives a material condition of the Offer, the Fund will disseminate additional tender offer materials (including by public announcement as set forth above) and extend the Offer to the extent required by Rules 14d-4(d) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the changes. With respect to a change in price or, subject to certain limitations, a change in the percentage of securities sought, a minimum ten business day period from the date of such change is generally required to allow for adequate dissemination of such change to stockholders. Accordingly, if, prior to the Expiration Date, the Fund decreases the number of Shares being sought, 23 increases the consideration offered pursuant to the Offer or adds a dealer's soliciting fee, and if the Offer is scheduled to expire at any time earlier than the period ending on the tenth business day from the date that notice of such increase, decrease or addition is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such ten business day period. For purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or a federal holiday and consists of the time period from 12:01 a.m. through 12:00 midnight Eastern time. 16. MISCELLANEOUS. The Offer is not being made to, nor will the Fund accept tenders from, or on behalf of, owners of Shares in any jurisdiction in which the making of the Offer or its acceptance would not comply with the securities or "blue sky" laws of that jurisdiction. The Fund is not aware of any jurisdiction in which the making of the Offer or the acceptance of tenders of, purchase of, or payment for, Shares in accordance with the Offer would not be in compliance with the laws of such jurisdiction. The Fund, however, reserves the right to exclude shareholders in any jurisdiction in which it is asserted that the Offer cannot lawfully be made or tendered Shares cannot lawfully be accepted, purchased or paid for. So long as the Fund makes a good-faith effort to comply with any state law deemed applicable to the Offer, the Fund believes that the exclusion of holders residing in any such jurisdiction is permitted under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on the Fund's behalf by one or more brokers or dealers licensed under the laws of such jurisdiction. 24 Manually signed facsimile copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and Share certificates and any other required documentation should be sent or delivered by each shareholder or the shareholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at one of the addresses set forth below. The Depositary for the Offer is: ALPINE FIDUCIARY SERVICES, INC. DEPOSITARY By Registered, Certified or Express Mail or By First Class Mail: Overnight Courier: By Hand: Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. P.O. Box 2065 219 Murray Hill Parkway c/o STARS South Hackensack, NJ 07606-9974 East Rutherford, NJ 07073 100 William Street Attn: Corporate Attn: Corporate Actions Dept. Lower Galleria Actions Dept. New York, NY 10038
Questions or requests for assistance or for additional copies of the Offer to Purchase, the Letter of Transmittal or other material in connection with the Offer may be directed to the Information Agent at its address and telephone number set forth below. Shareholders may also contact their brokers, dealer, commercial bank or trust company for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street New York, New York 10004 Toll Free: (800) 843-0369 Call Collect: (212) 440-9800 THE KOREA FUND, INC. January 23, 2004 EX-99.A.1.II 4 y93395taexv99waw1wii.txt FORM OF LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL TO ACCOMPANY SHARES OF COMMON STOCK OF THE KOREA FUND, INC. TENDERED PURSUANT TO THE OFFER TO PURCHASE DATED JANUARY 23, 2004 THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON FEBRUARY 23, 2004, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: ALPINE FIDUCIARY SERVICES, INC. By Registered, Certified or Express Mail or Overnight By First Class Mail: Courier: By Hand: Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. P.O. Box 2065 219 Murray Hill Parkway c/o STARS South Hackensack, NJ 07606-9974 East Rutherford, NJ 07073 100 William Street Attn: Corporate Actions Dept. Attn: Corporate Actions Dept. Lower Galleria New York, NY 10038
To Confirm Receipt of Notice of Guaranteed Delivery: Fax #: (201) 528-2733 Fax confirmation #: (201) 559-1152 DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN THOSE SHOWN ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED AND COMPLETE THE SUBSTITUTE W-9 SET FORTH BELOW (OR, IN THE CASE OF A NON-U.S. PERSON, THE APPROPRIATE TYPE OF FORM W-8). THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
- ------------------------------------------------------------------------------------------------------------------------------ DESCRIPTION OF SHARES TENDERED - ------------------------------------------------------------------------------------------------------------------------------ NAMES(S) & ADDRESS(ES) OF REGISTERED HOLDERS(S) (PLEASE FILL IN, IF BLANK, EXACTLY AS SHARE(S) TENDERED (***) NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACHED ADDITIONAL LIST IF NECESSARY) - ------------------------------------------------------------------------------------------------------------------------------ TOTAL NUMBER OF SHARES SHARE REPRESENTED BY NUMBER CERTIFICATE SHARE OF SHARES NUMBER(S)(*) CERTIFICATE(S)(*) TENDERED(**) ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- ----------------------------------------------------------------------------- TOTAL SHARES TENDERED - ------------------------------------------------------------------------------------------------------------------------------ * NEED NOT BE COMPLETED BY SHAREHOLDERS WHO TENDER SHARES BY BOOK-ENTRY TRANSFER. ** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES EVIDENCED BY ANY CERTIFICATES DELIVERED TO THE DEPOSITARY ARE BEING TENDERED. SEE INSTRUCTION 5. *** IF THE SHARES BEING TENDERED ARE SHARES HELD BY THE TRANSFER AGENT PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN, SHAREHOLDERS SHOULD SO INDICATE ON PAGE 3. - ------------------------------------------------------------------------------------------------------------------------------
[ ] I HAVE LOST MY CERTIFICATE(S) FOR SHARES OF STOCK OF THE FUND AND REQUIRE ASSISTANCE WITH RESPECT TO REPLACING SUCH CERTIFICATE(S). SEE INSTRUCTION 3. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK- ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN INSTRUCTION 2, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE SHAREHOLDER HAS THE RESPONSIBILITY TO CAUSE THE LETTER OF TRANSMITTAL, CERTIFICATES AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. This Letter of Transmittal is to be used (a) if certificates for Shares (as defined below) are to be forwarded herewith, or (b) if uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan are to be tendered, or (c) if tenders are to be made by book-entry transfer to any of the accounts maintained by the Depositary at the Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the procedure set forth in Section 4, "Procedures for Tendering Shares," of the Fund's Offer to Purchase dated February 23, 2004 (the "Offer to Purchase"). Shareholders whose certificates are not immediately available or who cannot deliver certificates for Shares (other than uncertified Shares held by the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan) or deliver confirmation of the book-entry transfer of their Shares into the Depositary's account at the Book-Entry Transfer Facility and all other documents required hereby to the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date may nevertheless tender their Shares according to the guaranteed delivery procedures set forth in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase. See Instruction 2 below. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. 2 [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution - -------------------------------------------------------------------------------- Account Number - -------------------------------------------------------------------------------- Transaction Code Number - -------------------------------------------------------------------------------- If the tendered shares are being tendered by a nominee holder on behalf of its customers, please state the number of customer accounts for whose benefit the tender is made: - ------------------------------------------------------------------ [ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of Registered Owner(s): - -------------------------------------------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: - -------------------------------------------------------------------------------- Name of Institution That Guaranteed Delivery: - -------------------------------------------------------------------------------- Account Number (if delivered by book-entry transfer): - -------------------------------------------------------------------------------- NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY 3 Ladies and Gentlemen: The undersigned hereby tenders to The Korea Fund, Inc., a diversified, closed-end management investment company incorporated under the laws of the state of Maryland (the "Fund"), the shares of the Fund's Common Stock, $0.01 par value per share (the "Shares") described below, at a price per share (the "Purchase Price") equal to 95% of the net asset value in U.S. dollars ("NAV") per Share as of the close of the regular trading session of the New York Stock Exchange on the business day after the Expiration Date, upon the terms and subject to the conditions set forth in the Offer to Purchase, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together with the Offer to Purchase constitute the "Offer"). The "Expiration Date" of the Offer is 5:00 p.m. Eastern time on February 23, 2004, unless the Fund, in its sole discretion, shall have extended the period the Offer is open, in which case "Expiration Date" shall mean the last time and date on which the Offer, as so extended by the Fund, shall expire. Subject to, and effective upon, acceptance for payment of the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer, the undersigned hereby sells, assigns and transfers to, or upon the order of, the Fund all right, title and interest in and to all the Shares that are being tendered hereby and that are being accepted for purchase pursuant to the Offer (and any and all dividends, distributions, other Shares or other securities or rights issued or issuable in respect of such Shares on or after the Expiration Date) and irrevocably constitutes and appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any such dividends, distributions, other Shares or securities or rights), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) to (a) deliver certificates for such Shares (and any such other dividends, distributions, other Shares or securities or rights) or transfer ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), together, in either such case, with all accompanying evidences of transfer and authenticity to or upon the order of the Fund, upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price, (b) present such Shares (and any such other dividends, distributions, other Shares or securities or rights) for transfer on the books of the Fund, and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any such other dividends, distributions, other Shares or securities or rights), all in accordance with the terms of the Offer. The undersigned hereby represents and warrants that: (a) the undersigned has full power and authority to tender, sell, assign and transfer the tendered Shares (and any and all dividends, distributions, other Shares or other securities or rights issued or issuable in respect of such Shares on or after the Expiration Date); (b) when and to the extent the Fund accepts the Shares for purchase, the Fund will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges, proxies, encumbrances or other obligations relating to their sale or transfer, and not subject to any adverse claim; (c) on request, the undersigned will execute and deliver any additional documents deemed by the Depositary or the Fund to be necessary or desirable to complete the sale, assignment and transfer of the tendered Shares (and any and all dividends, distributions, other Shares or securities or rights issued or issuable in respect of such Shares on or after the Expiration Date); and (d) the undersigned has read and agreed to all of the terms of the Offer. All authority conferred or agreed to be conferred in this Letter of Transmittal shall be binding upon the successors, assigns, heirs, executors, administrators and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date in accordance with Section 5, "Withdrawal Rights," of the Offer to Purchase. After the Expiration Date, tenders made pursuant to the Offer will be irrevocable except as provided in the Offer to Purchase. THE UNDERSIGNED TENDERS ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE NAME OF THE REGISTERED HOLDER(S) BY THE FUND'S TRANSFER AGENT PURSUANT TO THE FUND'S DIVIDEND REINVESTMENT PLAN. [ ] YES [ ] NO Note: If you do not check either of the boxes above, uncertificated Shares, if any, held in the name of the registered holder(s) by the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan will not be tendered. 4 ODD LOTS (SEE INSTRUCTION 13) This section is to be completed ONLY if Shares are being tendered by or on behalf of a person owning beneficially or of record an aggregate of not more than 99 Shares. The undersigned either (check only one box): [ ] Is the beneficial or record owner of an aggregate of not more than 99 Shares, all of which are being tendered; or [ ] Is a broker, dealer, commercial bank, trust company or other nominee that (a) is tendering for the beneficial owner(s) thereof Shares with respect to which it is the record holder, and (b) believes, based upon representations made to it by such beneficial owner(s), that each such person is the beneficial owner of an aggregate of not more than 99 Shares and is tendering all of such Shares; and, in either case, hereby represents that the above indicated information is true and correct as to the undersigned. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. NOTE: SIGNATURES MUST BE PROVIDED BELOW. The undersigned understands that the valid tender of Shares pursuant to any one of the procedures described in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Fund upon the terms and subject to the conditions of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer, the Fund may not be required to purchase any of the Shares tendered hereby, or may accept for purchase fewer than all of the Shares tendered hereby. Unless otherwise indicated herein under "Special Payment Instructions," please return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) in the name(s) of the registered holder(s) appearing under "Description of Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery Instructions," please return any certificates for Shares not tendered or accepted for payment (and accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing under "Description of Shares Tendered." In the event that either the Special Delivery Instructions or the Special Payment Instructions are completed, please return such certificates to the person or persons so indicated. The undersigned recognizes that the Fund has no obligation pursuant to the Special Payment Instructions to transfer any Shares from the name of the registered holder thereof if the Fund does not accept for payment any of the Shares so tendered. The undersigned further recognizes that the Special Payment Instructions and the Special Delivery Instructions are not applicable to Shares tendered by book-entry transfer, nor to uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan which may be tendered hereby. 5 SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 6, 7 AND 8) To be completed ONLY if certificates for Shares not tendered or not purchased are to be issued in the name of and sent to someone other than the undersigned. Issue Certificate to: Name - -------------------------------------------------------------------------------- (PLEASE PRINT) Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (CITY, STATE, ZIP CODE) Complete Payer Substitute Form W-9 or appropriate type of Form W-8 - -------------------------------------------------------------------------------- (TAXPAYER IDENTIFICATION (SOCIAL SECURITY) NUMBER) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 6, 7 AND 8) To be completed ONLY if certificates for Shares not tendered or not purchased are to be issued in the name of the undersigned, but sent to someone other than the undersigned or to the undersigned at an address other than that shown above. Mail Certificate to: Name - -------------------------------------------------------------------------------- (PLEASE PRINT) Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (CITY, STATE, ZIP CODE) 6 SIGN HERE (IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 HEREIN) - -------------------------------------------------------------------------------- (SIGNATURES OF SHAREHOLDER(S)) Dated: ------------------------------ (Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s) for the Shares or on a security position listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted herewith. If signature is by attorney-in-fact, executor, administrator, trustee, guardian, agent, officer of a corporation or another person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 6.) Name(s) - -------------------------------------------------------------------------------- (PLEASE PRINT) Capacity (Full Title) - -------------------------------------------------------------------------------- Address - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- City State Zip Code Area Code and Telephone Number - -------------------------------------------------------------------------------- Employer Identification or Social Security Number - -------------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 1 AND 6) Authorized Signature(s) - -------------------------------------------------------------------------------- Name - -------------------------------------------------------------------------------- (PLEASE PRINT) Name of Firm - -------------------------------------------------------------------------------- Address 7 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- City State Zip Code Dated: ------------------------------ 8 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. SIGNATURE GUARANTEES. No signature guarantee on this Letter of Transmittal is required if (a) this Letter of Transmittal is signed by the registered holder(s) of the Shares (including, for purposes of this document, any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith, unless such holder(s) has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" herein, or (b) the Shares tendered are tendered for the account of a firm (an "Eligible Institution") which is a broker, dealer, commercial bank, credit union, savings association or other entity and which is a member in good standing of a stock transfer association's approved medallion program (such as STAMP, SEMP or MSP). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 6. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be used only (a) if certificates are to be forwarded herewith, (b) if uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's dividend reinvestment plan are to be tendered, or (c) if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase. Certificates for all physically tendered Shares, or confirmation of a book-entry transfer in the Depositary's account at the Book-Entry Transfer Facility of Shares tendered by book-entry transfer, together, in each case, with a properly completed and duly executed Letter of Transmittal with any required signature guarantees, and any other documents required by this Letter of Transmittal should be mailed or delivered to the Depositary at the appropriate address set forth herein and must be received by the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date. Shareholders whose certificates are not immediately available or who cannot deliver Shares and all other required documents to the Depositary prior to 5:00 p.m. Eastern time on the Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant to the procedures for book-entry transfer prior to the Expiration Date, may tender their Shares by or through any Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery, which must be received by the Depositary prior to the Expiration Date, and by otherwise complying with the guaranteed delivery procedures set forth in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase. Pursuant to such procedures, the certificates for all physically tendered Shares, or confirmation of book-entry transfer, as the case may be, as well as a properly completed and duly executed Letter of Transmittal, and all other documents required by this Letter of Transmittal must be received by the Depositary prior to 5:00 p.m. Eastern time on the second NYSE trading day after the date of execution of the Notice of Guaranteed Delivery, all as provided in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase. THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK- ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND EXCEPT AS OTHERWISE PROVIDED IN THIS INSTRUCTION 2, THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. THE SHAREHOLDER HAS THE RESPONSIBILITY TO CAUSE THE LETTER OF TRANSMITTAL, CERTIFICATES AND ANY OTHER DOCUMENTS TO BE TIMELY DELIVERED. No alternative, conditional or contingent tenders will be accepted. All tendering shareholders, by execution of this Letter of Transmittal, waive any right to receive any notice of the acceptance for payment of Shares. 3. LOST CERTIFICATES. In the event that any shareholder is unable to deliver to the Depositary the Fund Certificate(s) representing his, her or its Shares due to the loss or destruction of such Certificate(s), such fact should be indicated on the face of this Letter of Transmittal. In such case, the shareholder should also contact Scudder Investments Service Company, the Fund's transfer agent (the "Transfer Agent"), at their number (800) 294-4366, to report the lost securities. The Transfer Agent will forward additional documentation which such shareholder must complete in order to effectively surrender such lost or destroyed Certificate(s) (including affidavits of loss and indemnity bonds in lieu thereof). There may be a fee in respect of lost or destroyed Certificates, but surrenders hereunder regarding such lost certificates will be processed only after such documentation has been submitted to and approved by the Transfer Agent. 8 4. INADEQUATE SPACE. If the space provided is inadequate, the certificate numbers and/or number of Shares should be listed on a separate signed schedule attached hereto. 5. PARTIAL TENDERS AND UNPURCHASED SHARES. (Not applicable to shareholders who tender by book-entry transfer.) If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the column entitled "Number of Shares Tendered." In such case, a new certificate for the remainder of the Shares evidenced by the old certificate(s) will be issued and sent to the registered holder, unless otherwise specified in the "Special Payment Instructions" or "Special Delivery Instructions" boxes in this Letter of Transmittal, as soon as practicable after the Repurchase Request Deadline. All Shares represented by certificates listed and delivered to the Depositary are deemed to have been tendered unless otherwise indicated. 6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. (a) If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) on the face of the certificates. (b) If any of the tendered Shares are held of record by two or more joint holders, ALL such holders must sign this Letter of Transmittal. (c) If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many Letters of Transmittal as there are different registrations of certificates. (d) If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made, or the certificates for Shares not tendered or purchased are to be issued, to a person other than the registered holder(s), in which case the endorsements or signatures on the stock powers, as the case may be, must be signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates. Signatures on such certificates or stock powers must be guaranteed by an Eligible Institution. See also Instruction 1. (e) If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, agents, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and must submit proper evidence satisfactory to the Fund of their authority to so act. (f) If this Letter of Transmittal is signed by a person(s) other than the registered holder(s) of the certificates listed and transmitted hereby, the certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear on the certificates. Signatures on such certificates of stock powers must be guaranteed by an Eligible Institution. See also Instruction 1. 7. STOCK TRANSFER TAXES. Except as set forth in this Instruction 7, no stock transfer tax stamps or funds to cover such stamps need accompany this Letter of Transmittal, and the Fund will pay all stock transfer taxes, if any, with respect to the transfer and sale of Shares to it pursuant to the Offer. If, however, payment of the purchase price is to be made to, or (in the circumstances permitted by the Fund's Offer to Purchase) if Shares not tendered or not purchased are to be registered in the name of any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. 8. TENDER OF MORE THAN 4,966,590 SHARES. If more than 4,966,590 Shares are duly tendered pursuant to the Offer (and not withdrawn as provided in section 5, "Withdrawal Rights," of the Offer to Purchase), unless the Fund determines not to purchase any shares, the Fund will purchase Shares from tendering shareholders, in accordance with the terms and conditions specified in the Offer to Purchase, on a pro rata basis (disregarding fractions), based upon the number of Shares duly tendered by or on behalf of each shareholder (and not timely withdrawn); provided that, the Fund will exclude from such pro-rata reduction and accept all Shares duly tendered by any shareholder who owns, beneficially or of record, an aggregate of not more than 99 Shares and who tenders all such Shares by means of the Letter of Transmittal. Certificates representing Shares tendered but not purchased will be returned promptly following the termination, expiration or withdrawal of the Offer, without further expense to the tendering shareholder. 9 9. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificates for Shares not tendered or not purchased are to be issued in the name of a person other than the person signing this Letter of Transmittal or if such certificates are to be sent to someone other than the person signing this Letter of Transmittal or to the person signing this Letter of Transmittal at an address other than that shown above, the boxes captioned "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal should be completed. 10. DETERMINATIONS OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, which determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined not to be in proper form or to refuse to accept for payment, purchase, or pay for, any Shares, if, in the opinion of the Fund's counsel, accepting, purchasing or paying for such shares would be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer, in whole or in part, or any defect or irregularity in any tender, whether generally or with respect to any particular Share(s) or shareholder(s). The Fund's interpretations of the terms and conditions of the Offer (including these instructions) shall be final and binding. No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. None of the Fund, the Depositary, the Information Agent or any other person shall be obligated to give notice of defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notice. Unless waived, any defects or irregularities must be cured within such time as the Fund shall determine. 11. REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Requests for assistance should be directed to, and additional copies of the Offer to Purchase, the Notice of Guaranteed Delivery and this Letter of Transmittal may be obtained from, the Information Agent at the address set forth at the end of this Letter of Transmittal, or from your broker, dealer, commercial bank, trust company, or other nominee. The Information Agent will also provide shareholders, upon request, with a Certificate of Foreign Status (Form W-8 or other appropriate type of Form W-8). 12. BACKUP WITHHOLDING. Unless an exemption applies or a shareholder is claiming to be an exempt recipient on the basis of foreign status, the requirements for which are described below, each shareholder that desires to participate in the Offer and that has not previously submitted to the Fund a correct, completed and signed Form W-9 must provide the Depositary with the shareholder's taxpayer identification number on the Substitute Form W-9 set forth in this Letter of Transmittal, with the required certifications being made under penalties of perjury. If the shareholder is an individual, the taxpayer identification number is his or her social security number. If the Depositary is not provided with the correct taxpayer identification number, the shareholder may be subject to a $50 penalty imposed by the Internal Revenue Service in addition to being subject to backup withholding. Certain shareholders (including, among others, most corporations and certain foreign persons) are exempt from backup withholding requirements. To qualify as an exempt recipient on the basis of foreign status, a shareholder that has not previously submitted to the Fund the appropriate type of Form W-8 must submit a properly executed Certificate of Foreign Status (Form W-8BEN or other appropriate type of Form W-8 along with any required attachment, if any), signed under penalties of perjury, attesting to that person's exempt status. A Form W-8BEN or other appropriate type of Form W-8 may be obtained from the Depositary or Information Agent. Generally, a foreign person will be able to avoid backup withholding with respect to payments that are considered made in exchange for tendered Shares only if such person (a) is neither a citizen nor a resident of the United States, (b) has not been and reasonably does not expect to be present in the United States for a period aggregating 183 days or more during the calendar year, and (c) is not and reasonably expects not be engaged in a trade or business within the United States to which the gain on the sale of the Shares would be effectively connected or, if an income tax treaty applies and so provides, the gain on the sale is not attributable to a U.S. permanent establishment maintained by such person. If backup withholding applies, the Depositary is required to withhold 28% of any payment made to the shareholder with respect to shares purchased pursuant to the Offer. Backup withholding is not an additional tax. Rather, the amount of the backup withholding can be credited against the U.S. federal income tax liability of persons subject to backup withholding provided that the required information is given to the Internal Revenue Service. If backup withholding results in an overpayment of the tax, a refund generally may be obtained by the shareholder upon filing an income tax return with the Internal Revenue Service. A SHAREHOLDER SHOULD CONSULT HIS OR HER TAX ADVISER AS TO HIS OR HER QUALIFICATION FOR EXEMPTION FROM THE BACKUP WITHHOLDING REQUIREMENTS AND THE PROCEDURE FOR OBTAINING AN EXEMPTION. 10 Shareholders are required to give the Depositary the taxpayer identification number of the record owner of the Shares. If the Shares are registered in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on IRS Form W-9. 13. ODD LOTS. As described in Section 1, "Price; Number of Shares," of the Offer to Purchase, the Fund will purchase Shares validly tendered and not properly withdrawn prior to the Expiration Date by any shareholder who owns beneficially or of record an aggregate of not more than 99 Shares (an "Odd Lot Holder"). This preference will not be available unless the item captioned "Odd Lots" is completed. 11
- ------------------------------------------------------------------------------------------------------------------ SUBSTITUTE (OPTIONAL) Name -------------------------------------- --------------------------------------- FORM W-9 Account number(s) Address ------------------------------------ (optional) DEPARTMENT OF THE TREASURY --------------------------------------------- --------------------------------------- INTERNAL REVENUE SERVICE --------------------------------------------- Social security number OR PAYER'S REQUEST FOR PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX --------------------------------------- TAXPAYER IDENTIFICATION AT RIGHT AND CERTIFY BY SIGNING AND DATING Employer identification number NUMBER ("TIN") AND BELOW --------------------------------------- CERTIFICATION Awaiting TIN [ ] --------------------------------------------------------------------------------------
PART 2 -- CERTIFICATION. UNDER PENALTIES OF PERJURY, I CERTIFY THAT: 1. The number shown on this form is my correct TIN (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because (a) I am exempt from backup withholding or (b) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U.S. resident alien). CERTIFICATION INSTRUCTION. -- You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you failed to report all interest and dividends on your tax return. -------------------------------------------------------------------------------------- Signature: --------------------------------------------- Date: ------------------------ - -------------------------------------------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU DO NOT HAVE A TAXPAYER IDENTIFICATION NUMBER BUT HAVE APPLIED OR WILL APPLY FOR A TAXPAYER IDENTIFICATION NUMBER AND HAVE NOT YET RECEIVED IT CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify, under penalties of perjury, that a TIN has not been issued to me and either (a) I have mailed or delivered an application to receive a TIN to the appropriate IRS Center or Social Security Administration Office or (b) I intend to mail or deliver such an application in the near future. I understand that if I do not provide a TIN within 60 days, 28% of all reportable payments made to me thereafter will be withheld until I provide a TIN. - ----------------------------------------------------- ----------------------------------------------------- SIGNATURE DATE
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. 12 IMPORTANT: This Letter of Transmittal (together with certificates for Shares and all other required documents) or the Notice of Guaranteed Delivery must be received by the Depositary prior to February 23, 2004, at the appropriate address set forth below: The Depositary for the Offer is: ALPINE FIDUCIARY SERVICES, INC. By Registered, Certified or Express Mail or Overnight By First Class Mail: Courier: By Hand: Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. Alpine Fiduciary Services, Inc. P.O. Box 2065 219 Murray Hill Parkway c/o STARS South Hackensack, NJ 07606-9974 East Rutherford, NJ 07073 100 William Street Attn: Corporate Actions Dept. Attn: Corporate Actions Dept. Lower Galleria New York, NY 10038
Questions or requests for assistance or for additional copies of this Letter of Transmittal, the Offer to Purchase, the Notice of Guaranteed Delivery and other accompanying materials may be directed to the Information Agent at its address and telephone number set forth below. Shareholders may also contact their broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: GEORGESON SHAREHOLDER COMMUNICATIONS INC. 17 State Street New York, NY 10004 Toll Free: (800) 843-0369 Call Collect: (212) 440-9800 EX-99.A.1.III 5 y93395taexv99waw1wiii.txt FORM OF NOTICE OF GUARANTEED DELIVERY NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF THE KOREA FUND, INC. This form, or one substantially equivalent hereto, must be used to accept the Offer (as defined below) if a shareholder's certificates for shares of common stock, par value $0.01 per share (the "Shares") of The Korea Fund, Inc., are not immediately available or time will not permit the Letter of Transmittal and other required documents to be delivered to the Depositary on or before the Expiration Date of the Offer. The "Expiration Date" of the Offer is 5:00 p.m. Eastern time on February 23, 2004, unless the Fund, in its sole discretion, shall extend the period the Offer is open, in which case "Expiration Date" shall mean the last time and date the Offer, as so extended by the Fund, shall expire. This form may be delivered by hand or overnight courier or transmitted by facsimile transmission or mail to the Depositary at the appropriate address set forth below and must be received by the Depositary on or before the Expiration Date. See Section 4, "Procedures for Tendering Shares," of the Offer to Purchase dated January 23, 2004 (the "Offer to Purchase"). The Depositary: ALPINE FIDUCIARY SERVICES, INC. By Registered, Certified or Express Mail or Overnight By First Class Mail: Courier: By Hand: Alpine Fiduciary Services, Alpine Fiduciary Services, Alpine Fiduciary Services, Inc. Inc. Inc. P.O. Box 2065 219 Murray Hill Parkway c/o STARS South Hackensack, NJ East Rutherford, NJ 07073 100 William Street 07606-9974 Attn: Corporate Actions Dept. Lower Galleria Attn: Corporate Actions Dept. New York, NY 10038
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE DOES NOT CONSTITUTE A VALID DELIVERY Ladies and Gentlemen: The undersigned hereby tenders to The Korea Fund, Inc. (the "Fund"), upon the terms and subject to the conditions set forth in its Offer to Purchase, dated January 23, 2004 and the related Letter of Transmittal (which together constitute the "Offer"), receipt of which is hereby acknowledged, the number of Shares specified below and all Shares that may be held in the name(s) of the registered holder(s) by the Fund's transfer agent pursuant to the dividend reinvestment plan pursuant to the guaranteed delivery procedures set forth in Section 4, "Procedures for Tendering Shares," of the Offer to Purchase. Number of Shares Tendered ------------------------------ Certificate Nos. (if available): Name(s) of Record Holder(s): - ------------------------------------------- ------------------------------------------- - ------------------------------------------- ------------------------------------------- Address: ------------------------------------------- ------------------------------------------- ------------------------------------------- If Shares will be tendered by book-entry transfer to The Depository Trust Company, please check box: [ ] Area Code and Telephone Number: The Depository Trust Company Account Number: - -------------------------------- ------------------------------------------- Taxpayer Identification (Social Security) Number: -----------------------
The undersigned also tenders all uncertificated Shares that may be held in the name(s) of the registered holder(s) by the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan: [ ] Yes [ ] No (Note: If neither of these boxes is checked, any such uncertificated Shares will NOT be tendered.) Dated: ---------------------------------, 2004 ------------------------------------------- SIGNATURE
2 GUARANTEE The undersigned, a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office, branch, or agency in the United States, hereby (a) guarantees to deliver to the Depositary certificates representing the Shares tendered hereby, in proper form for transfer (or tender shares pursuant to the procedure for book-entry transfer) into the Depositary's account at The Depository Trust Company, together with (i) a properly completed and duly executed Letter of Transmittal with any required signature guarantees and (ii) other required documents, within three business days after the Expiration Date of the Offer, and (b) represents that such tender of Shares complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended. Name of Firm: - -------------------------------------------------------------------------------- (PLEASE PRINT) Authorized Signature: - -------------------------------------------------------------------------------- Name: - -------------------------------------------------------------------------------- (PLEASE PRINT) Title: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Address: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: - -------------------------------------------------------------------------------- Dated: - -------------------------------------------------------------------------------- DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE SENT WITH THE LETTER OF TRANSMITTAL 3 EX-99.A.1.IV 6 y93395taexv99waw1wiv.txt FORM OF LETTER OF BROKER, DEALERS OFFER BY THE KOREA FUND, INC. TO PURCHASE FOR CASH UP TO 4,966,590 OF ITS ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AT 95% OF NET ASSET VALUE PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON FEBRUARY 23, 2004 UNLESS THE OFFER IS EXTENDED ("EXPIRATION DATE") THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER TO PURCHASE DATED JANUARY 23, 2004 AND IN THE LETTER OF TRANSMITTAL DATED JANUARY 23, 2004. January 23, 2004 To Brokers, Dealers, Commercial Banks, Trust Companies And Other Nominees: We are enclosing herewith the material listed below relating to the offer of The Korea Fund, Inc., a diversified, closed-end management investment company incorporated under the laws of the state of Maryland (the "Fund"), to purchase up to 4,966,590 of its issued and outstanding shares of common stock, par value $0.01 per share (the "Shares"), for cash at a price equal to 95% of the net asset value ("NAV") per Share determined as of the close of the regular trading session of the New York Stock Exchange ("NYSE") on the business day after the Expiration Date, subject to the terms and conditions set forth in the Offer to Purchase dated January 23, 2004 and the related Letter of Transmittal (which together constitute the "Offer"). The "Expiration Date" of the Offer is 5:00 p.m. Eastern time on February 23, 2004, unless the Fund, in its sole discretion, shall extend the period the Offer is open, in which case Expiration Date shall mean the last time and date the Offer, as so extended by the Fund, shall expire. If the Offer is extended beyond the Expiration Date, the purchase price for Shares will be their NAV determined as of the close of the regular trading session of the NYSE on the business day after the Expiration Date, as extended. We are asking you to contact your clients for whom you hold Shares registered in your name (or in the name of your nominee) or who hold Shares registered in their own names. Please bring the Offer to their attention as promptly as possible. No fees or commission will be payable to the Fund in connection with the Offer. However, brokers, dealers or other persons may charge shareholders a fee for soliciting tenders for Shares pursuant to the Offer. The Fund will also, upon request, reimburse you for reasonable and customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients. The Fund will pay all transfer taxes on its purchase of Shares, subject to Instruction 7, "Stock Transfer Taxes," of the Letter of Transmittal. HOWEVER, BACKUP WITHHOLDING AT A 28% RATE MAY BE REQUIRED UNLESS EITHER AN EXEMPTION IS PROVED OR THE REQUIRED TAXPAYER IDENTIFICATION INFORMATION AND CERTIFICATIONS ARE PROVIDED. SEE SECTION 13, "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES," OF THE OFFER TO PURCHASE AND INSTRUCTION 12, "BACKUP WITHHOLDING," OF THE LETTER OF TRANSMITTAL. For your information and for forwarding to your clients, are enclosing the following documents: 1. The Offer to Purchase dated January 23, 2004; 2. The Letter of Transmittal for your use and to be provided to your clients; 3. Notice of Guaranteed Delivery; 4. Form of letter to clients that may be sent to your clients for whose accounts you hold Shares registered in your name (or in the name of your nominee); and 5. Return envelope addressed to Alpine Fiduciary Services, Inc. (the "Depositary"). The Offer is not being made to, nor will the Fund accept tenders from, holders of Shares in any State or other jurisdiction in which the Offer would not be in compliance with the securities or Blue Sky laws of such jurisdiction. As described in the Offer to Purchase under Section 4, "Procedures for Tendering Shares," tenders may be made without the concurrent deposit of stock certificates if (1) such tenders are made by or through a broker or dealer that is a member firm of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc. or a commercial bank or trust company having an office, branch, or agency in the United States; and (2) certificates for Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility (as defined in the Letter of Transmittal)), together with a properly completed and duly executed Letter of Transmittal, and any other documents required by the Letter of Transmittal, are received by the Depositary within three business days after receipt by the Depositary of a properly completed and duly executed Notice of Guaranteed Delivery. AS DESCRIBED IN THE OFFER, THE FUND WILL, IF THE OFFER IS COMPLETED, PURCHASE ALL SHARES FROM SHAREHOLDERS WHO BENEFICIALLY OWN 99 SHARES OR LESS AND TENDER ALL OF THEIR SHARES. IF SUCH A TENDER IS MADE BY A BROKER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE FOR BENEFICIAL OWNER(S) OF SHARES WITH RESPECT TO WHICH IT IS THE RECORD HOLDER, SUCH BROKER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST REPRESENT AND WARRANT IN THE LETTER OF TRANSMITTAL THAT IT BELIEVES, BASED UPON REPRESENTATIONS MADE TO IT BY SUCH BENEFICIAL OWNER(S), THAT EACH SUCH PERSON OWNS 99 SHARES OR LESS. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER ANY SHARES. For additional information or copies of the enclosed material, please contact Georgeson Shareholder Communications Inc. (the "Information Agent") at (212) 440-9800. Very truly yours, The Korea Fund, Inc. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE KOREA FUND, INC., THE INFORMATION AGENT, OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH MATERIAL 2 EX-99.A.1.V 7 y93395taexv99waw1wv.txt FORM OF LETTER TO CLIENTS THE KOREA FUND, INC. OFFER TO PURCHASE FOR CASH UP TO 4,966,590 SHARES OF ITS ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AT 95% OF NET ASSET VALUE PER SHARE THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON FEBRUARY 23, 2004, UNLESS THE OFFER IS EXTENDED. THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER TO PURCHASE DATED JANUARY 23, 2004 AND IN THE LETTER OF TRANSMITTAL. To Our Clients: Enclosed for your consideration is the Offer to Purchase, dated January 23, 2004 (the "Offer to Purchase"), of The Korea Fund, Inc., a diversified, closed-end management investment company incorporated under the laws of the state of Maryland (the "Fund"), and a related Letter of Transmittal (which together constitute the "Offer"), pursuant to which the Fund is offering to purchase up to 4,966,590 shares of its issued and outstanding common stock, par value $0.01 per share (the "Shares"), for cash at a price equal to 95% of their net asset value ("NAV") per Share determined as of the close of the regular trading session of the New York Stock Exchange ("NYSE") on the business day after the Expiration Date, subject to the terms and conditions set forth in the Offer. The "Expiration Date" of the Offer is 5:00 p.m. Eastern time on February 23, 2004, unless the Fund, in its sole discretion, shall extend the period the Offer is open, in which case Expiration Date shall mean the last time and date the Offer, as so extended by the Fund, shall expire. The Offer to Purchase and the Letter of Transmittal are being forwarded to you for your information only and cannot be used by you to tender Shares held by us for your account. We are the holder of record of Shares held for your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND ONLY PURSUANT TO YOUR INSTRUCTIONS. Your attention is called to the following: (1) The purchase price to be paid for the Shares is an amount per Share equal to 95% of the net asset value per Share as determined as of the close of the regular trading session of the NYSE on the business day after the day on which the Offer expires. The current net asset value of the Fund is calculated daily and may be obtained from Georgeson Shareholder Communications, Inc. (the "Information Agent") by calling (800) 843-0369 between the hours of 9:00 a.m. and 5:00 p.m. Eastern time, Monday through Friday (except holidays). (2) The Offer is not conditioned upon any minimum number of Shares being tendered. (3) Upon the terms and subject to the conditions of the Offer, the Fund will purchase all Shares validly tendered on or prior to the Expiration Date. (4) No fees or commission will be payable to the Fund in connection with the Offer. Except as mandated in Instruction 7, "Stock Transfer Taxes," of the Letter of Transmittal, the Fund will pay any stock transfer taxes on the purchase of Shares by the Fund pursuant to the Offer. However, a broker, dealer or other person may charge a fee for processing the transactions on behalf of shareholders. (5) Your instructions to us should be forwarded in ample time before the Expiration Date to permit us to submit a tender on your behalf. An envelope to return your instructions to us is enclosed. YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE OFFER. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with applicable law. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS IS MAKING ANY RECOMMENDATION TO ANY SHAREHOLDER WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES IN THE OFFER. EACH SHAREHOLDER IS URGED TO READ AND EVALUATE THE OFFER AND ACCOMPANYING MATERIALS CAREFULLY. Very Truly Yours, THE KOREA FUND, INC. 2 INSTRUCTIONS The undersigned acknowledge(s) receipt of your letter, and the enclosed Offer, dated January 23, 2004, relating to The Korea Fund, Inc. (the "Fund"), to purchase up to 4,966,590 shares of its issued and outstanding common stock, par value $0.01 per share (the "Shares"). This will instruct you to tender to the Fund the number of Shares indicated below (which are held by you for the account of the undersigned), upon the terms and subject to the conditions set forth in the Offer that you have furnished to the undersigned. AGGREGATE NUMBER OF SHARES TO BE TENDERED: ________ SHARES ENTER NUMBER OF SHARES TO BE TENDERED. ODD LOTS This section is to be completed ONLY if Shares are being tendered by or on behalf of a person owning beneficially or of record an aggregate of not more than 99 Shares. The undersigned: [ ] Is the beneficial or record owner of an aggregate of not more than 99 Shares, all of which are being tendered; and, hereby represents that the above indicated information is true and correct as to the undersigned. SIGN HERE Account Number: - ---------------------------------------- Signature: - ---------------------------------------------- Dated: - ---------------------------------------------------- - -------------------------------------------------------------------------------- PLEASE PRINT NAME(S) AND ADDRESS(ES) - -------------------------------------------------------------------------------- DAYTIME AREA CODE AND TEL. NO. - -------------------------------------------------------------------------------- TAXPAYER IDENTIFICATION NO. OR SOCIAL SECURITY NO. 3 EX-99.A.5 8 y93395taexv99waw5.txt PRESS RELEASE Exhibit 99 Deutsche Asset Management [LOGO] A Member of the Deutsche Bank Group Press Release - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE For additional information: Judith Inosanto 212.326.6746, Media Patricia M. Rosch 212.336.4812, Investors THE KOREA FUND, INC. ANNOUNCES COMMENCEMENT OF TENDER OFFER, PROGRAM FOR FUTURE REPURCHASE OFFERS NEW YORK, NY, January 21, 2004 -- The Board of Directors of The Korea Fund, Inc. (NYSE: KF) today approved a tender offer for up to 10% of its outstanding shares of common stock for cash, at a price per share equal to 95% of the net asset value on the business day after the day on which the offer expires. The tender offer is expected to commence on January 23, 2004 and remain open through February 23, 2004, unless extended. The tender offer is being conducted as a result of the Board's special review, initiated last April, of alternatives that would enable shareholders to receive value that is near net asset value for at least a portion of their shares by April 2004. The Board considered a full range of strategic and structural alternatives for the Fund in connection with its review, and concluded that, in their opinion, the tender offer is in the best interests of the Fund's shareholders at this time. The Fund also announced that the Board had approved a program of making additional repurchase offers, one in the first quarter of 2005 and one in the first quarter of 2006. Each additional repurchase offer would be for 10% of the Fund's shares, would be at a price of 95% of net asset value at the close of business on the day after the offer expires, and would be made, subject to fiduciary and other applicable requirements, if the Fund's shares traded on the New York Stock Exchange at an average weekly discount from net asset value greater than 15% during a 13-week 1 measuring period ending the preceding December 31. The Fund noted that it might at its option pay for shares repurchased in these additional offers with portfolio securities rather than cash, depending in part on whether the Fund is able to obtain an appropriate ruling from the Internal Revenue Service. The Board also concluded that maintaining the current closed-end format of the Fund was in the best interests of the Fund's shareholders because, under current market conditions, including the emerging nature of the Korean capital markets, the volatility and the limited liquidity of many of the Fund's holdings, the Fund's investment objective of long-term capital appreciation can best be achieved through a closed-end structure. Richard Hale, Chairman of the Board of the Fund and a Managing Director of Deutsche Investment Management Americas Inc., the Fund's manager, said: "The Fund's closed-end structure has, in our view, though past performance is no guarantee of future results, helped the Fund achieve its strong historical record of investment performance." The Fund's manager is part of Deutsche Asset Management. With more than US $685 billion in assets under management (as of September 30, 2003), Deutsche Asset Management is one of the world's leading investment management organizations, not just in size, but in quality and breadth of investment products, performance and client service. Deutsche Asset Management is geographically divided into three regions -- the Americas, Europe and Asia Pacific, providing the full range of investment management products across the risk/return spectrum. # # # There can be no assurance that any action proposed or adopted by the Board will reduce or eliminate the discount at which the Fund's shares trade. This announcement is not an offer to purchase or the solicitation of an offer to sell shares of the Fund. The tender offer will be made only by the Offer to Purchase and the related Letter of Transmittal. Shareholders should read these documents carefully when they are available because they will contain important information. These documents will be available to investors for free at the website of the Securities and Exchange Commission (www.sec.gov). Neither the offer to purchase shares will be made to, nor will tenders pursuant to the Offer to Purchase be accepted from or on behalf of, holders of shares in any jurisdiction in which making or accepting the offer to purchase would violate that jurisdiction's laws. 2 Investments in funds involve risk. Additional risks are associated with international investing, such as government regulations and differences in liquidity which may increase the volatility of your investment. Not FDIC Insured. Not Guaranteed. May Lose Value. Scudder Investments is part of Deutsche Asset Management which is the marketing name in the US for the asset management activities of Deutsche Bank AG, Deutsche Bank Trust Company Americas, Deutsche Asset Management Inc., Deutsche Asset Management Investment Services Ltd., Deutsche Investment Management Americas Inc. and Scudder Trust Company. (1/04) 28141 3 EX-99.B.1 9 y93395taexv99wbw1.txt $1,300,000,000 CREDIT AGREEMENT Exhibit (b)(1) CERTAIN MUTUAL FUNDS MANAGED BY DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (FORMERLY KNOWN AS ZURICH SCUDDER INVESTMENTS, INC.), THE LENDERS NAMED HEREIN AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT ---------- J. P. MORGAN SECURITIES INC., AS ADVISOR, LEAD ARRANGER, AND BOOK MANAGER ---------- STATE STREET BANK AND TRUST COMPANY AND CREDIT LYONNAIS NEW YORK BRANCH, AS SYNDICATION AGENTS ---------- $1,300,000,000 CREDIT AGREEMENT ---------- DATED AS OF APRIL 11, 2002 TABLE OF CONTENTS
Page ---- SECTION 1. DEFINITIONS..................................................................................................... 1 1.1 Defined Terms............................................................................................... 1 1.2 Other Definitional Provisions............................................................................... 9 1.3 Assumptions Regarding Structure............................................................................. 9 SECTION 2. AMOUNT AND TERMS OF COMMITMENTS................................................................................. 9 2.1 Commitments................................................................................................. 9 2.2 Procedure for Borrowing.................................................................................... 10 2.3 Fees....................................................................................................... 10 2.4 Termination and Reduction of Commitment.................................................................... 11 2.5 Repayment of Loans; Evidence of Debt....................................................................... 11 2.6 Optional and Mandatory Prepayments......................................................................... 12 2.7 Interest Rates and Payment Dates........................................................................... 13 2.8 Computation of Interest and Fees........................................................................... 13 2.9 Pro Rata Treatment and Payments............................................................................ 14 2.10 Requirements of Law........................................................................................ 14 2.11 Taxes...................................................................................................... 15 2.12 Change of Lending Office; Replacement of Lender............................................................ 17 2.13 Swing Line Commitment...................................................................................... 17 2.14 Procedure for Swing Line Borrowing......................................................................... 17 2.15 Refunding of Swing Line Loans.............................................................................. 18 2.16 Designation of Additional Borrowers; Amendments to Schedule I.............................................. 19 2.17 Interfund Lending.......................................................................................... 19 SECTION 3. REPRESENTATIONS AND WARRANTIES................................................................................. 20 3.1 Financial Condition........................................................................................ 20 3.2 No Change.................................................................................................. 20 3.3 Existence; Compliance with Law............................................................................. 20 3.4 Power; Authorization; Enforceable Obligations.............................................................. 21 3.5 No Legal Bar............................................................................................... 21 3.6 No Material Litigation..................................................................................... 21 3.7 No Default................................................................................................. 21 3.8 Ownership of Property; Liens............................................................................... 22 3.9 No Burdensome Restrictions................................................................................. 22 3.10 Taxes...................................................................................................... 22 3.11 Federal Regulations........................................................................................ 22 3.12 ERISA...................................................................................................... 22 3.13 Certain Regulations........................................................................................ 22 3.14 Subsidiaries............................................................................................... 22 3.15 Registration of the Funds.................................................................................. 23
ii 3.16 Offering in Compliance with Securities Laws................................................................ 23 3.17 Investment Policies........................................................................................ 23 3.18 Permission to Borrow....................................................................................... 23 3.19 Accuracy of Information; Electronic information............................................................ 23 3.20 Affiliated Persons......................................................................................... 23 SECTION 4. CONDITIONS PRECEDENT............................................................................................ 24 4.1 Conditions to Initial Loans................................................................................ 24 4.2 Conditions to Each Loan.................................................................................... 26 SECTION 5. AFFIRMATIVE COVENANTS.......................................................................................... 27 5.1 Financial Statements....................................................................................... 27 5.2 Certificates; Other Information............................................................................ 28 5.3 Payment of Obligations..................................................................................... 28 5.4 Conduct of Business and Maintenance of Existence........................................................... 28 5.5 Maintenance of Property; Insurance......................................................................... 29 5.6 Inspection of Property; Books and Records; Discussions..................................................... 29 5.7 Notices.................................................................................................... 29 5.8 Purpose of Loans........................................................................................... 30 5.9 Payment of Taxes........................................................................................... 30 SECTION 6. NEGATIVE COVENANTS 30 6.1 Financial Condition Covenant............................................................................... 30 6.2 Limitation on Indebtedness; Derivatives.................................................................... 31 6.3 Limitation on Liens........................................................................................ 31 6.4 Limitation on Guarantee Obligations........................................................................ 31 6.5 Limitation on Fundamental Changes.......................................................................... 31 6.6 Limitation on Distributions................................................................................ 32 6.7 Limitation on Investments, Loans and Advances.............................................................. 32 6.8 Limitation on Transactions with Affiliates................................................................. 32 6.9 Limitation on Negative Pledge Clauses...................................................................... 32 6.10 Limitation on Changes to Investment Policies............................................................... 32 6.11 Permitted Activities....................................................................................... 33 6.12 Sale of Assets, Consolidation, Merger, Etc................................................................. 33 SECTION 7. EVENTS OF DEFAULT.............................................................................................. 33 SECTION 8. THE ADMINISTRATIVE AGENT....................................................................................... 36 8.1 Appointment................................................................................................ 36 8.2 Delegation of Duties....................................................................................... 37 8.3 Exculpatory Provisions..................................................................................... 37
iii 8.4 Reliance by Administrative Agent........................................................................... 37 8.5 Notice of Default.......................................................................................... 37 8.6 Non-Reliance on Administrative Agent and Other Lenders..................................................... 38 8.7 Indemnification............................................................................................ 38 8.8 Administrative Agent in Its Individual Capacity............................................................ 39 8.9 Successor Administrative Agent............................................................................. 39 SECTION 9. MISCELLANEOUS.................................................................................................. 39 9.1 Amendments and Waivers..................................................................................... 39 9.2 Notices.................................................................................................... 40 9.3 No Waiver; Cumulative Remedies............................................................................. 41 9.4 Survival of Representations and Warranties................................................................. 41 9.5 Payment of Expenses and Taxes.............................................................................. 41 9.6 Successors and Assigns; Participations and Assignments..................................................... 42 9.7 Adjustments; Set-off....................................................................................... 44 9.8 Counterparts............................................................................................... 45 9.9 Severability............................................................................................... 45 9.10 Integration................................................................................................ 45 9.11 GOVERNING LAW.............................................................................................. 46 9.12 Submission To Jurisdiction; Waivers........................................................................ 46 9.13 Acknowledgements........................................................................................... 47 9.14 WAIVERS OF JURY TRIAL...................................................................................... 47 9.15 Recourse................................................................................................... 48 9.16 Integration................................................................................................ 48 9.17 Termination of Existing Credit Facilities.................................................................. 48
SCHEDULES: Schedule I Borrowers & Pro Rata Allocations Schedule II Commitments, Addresses, Etc. Schedule III Amendments to Investment Management Agreements Schedule IV Amendments to Custody Agreements EXHIBITS: Exhibit 2.5(e) Form of Note Exhibit 2.16(a) Form for Designation of New Borrowers Exhibit 4.1(g) Form of Opinion Exhibit 9.6(c) Form of Assignment and Acceptance iv Exhibit (b)(1) CREDIT AGREEMENT, dated as of April 11, 2002 (as amended, restated, supplemented or otherwise modified from time to time, this "Agreement") among (i) the undersigned registered investment companies (each, a "Fund", and collectively, the "Funds"), each of which is executing this Agreement on behalf of itself, and, if applicable, certain of its respective investment portfolios set forth beneath such Fund's name on the signature pages hereon (each of which Funds or investment portfolios, as the case may be, is, individually, a "Borrower" and, collectively, the "Borrowers"), (ii) the several banks and other financial institutions from time to time parties to this Agreement (the "Lenders") and (iii) JPMORGAN CHASE BANK, a New York banking corporation, as a Lender and as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent"); W I T N E S S E T H : WHEREAS, each Fund is an open-end or a closed-end registered investment company under the Investment Company Act of 1940 for which Deutsche IMA (as defined below) acts as an investment manager; WHEREAS, each Borrower has requested the Lenders to make Loans (as defined below) severally and not jointly to each Borrower and to make available to it a credit facility for the purposes and on the terms and conditions set forth herein; and WHEREAS, each Lender acknowledges that each Borrower shall be liable hereunder only for the Loans made to such Borrower hereunder and interest thereon and for the fees and expenses associated therewith and as otherwise set forth herein, and that, notwithstanding anything to the contrary herein, each Borrower's obligations hereunder are several and not joint; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties to this Agreement agree as follows: SECTION 1. DEFINITIONS Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Administrative Agent": JPMorgan Chase Bank, together with its permitted successors, as the administrative agent for the Lenders under this Agreement and the other Loan Documents. "Affiliate": as to any Person, any other Person (other than a Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" of a Person means the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Aggregate Commitment": the total of all Commitments of all Lenders, as may be reduced from time to time in the accordance with the terms of this Agreement. On the Closing Date at the time of closing, the Aggregate Commitment shall be equal to $1,300,000,000. "Agreement": this Credit Agreement, as further amended, restated, supplemented or otherwise modified from time to time. "Applicable Law": any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. "Applicable Margin": 0.50% per annum. "Asset Coverage Ratio": with respect to any Borrower, the ratio which the value of the Total Assets of such Borrower less all liabilities and Indebtedness not represented by Senior Securities, bears to the aggregate amount of all Senior Securities representing Indebtedness of such Borrower. For the purposes of calculating the Asset Coverage Ratio, the amount of any liability or Indebtedness deducted from Total Assets shall be equal to the greater of (x) the outstanding amount of such liability or Indebtedness and (y) the fair market value of all assets securing such liability or Indebtedness. The indebtedness incurred by any Borrower under any Interfund Lending shall be deemed to be a Senior Security for purposes of calculating the Asset Coverage Ratio as it applies to the Borrower "Assignee": as defined in Section 9.6(c). "Available Commitment": as to any Lender at any time, an amount equal to (a) the amount of such Lender's Commitment less (b) the aggregate principal amount of all Loans to all Borrowers made by such Lender then outstanding; collectively, as to all the Lenders, the "Available Commitments". "Benefited Lender": as defined in Section 9.7(a). "Borrower" and "Borrowers": as defined in the Preamble hereto. "Borrowing Date": any Business Day specified in a notice pursuant to Section 2.2 or 2.14 as a date on which a Fund, on its own behalf or if applicable on behalf of an investment portfolio thereof that is a Borrower, requests the Lenders to make Loans hereunder. "Business Day": a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close. "Charter Documents": the certificate of incorporation, declaration of trust, by-laws or other organizational or governing documents of a Fund, in each case applicable to or binding upon such Fund or any of its property or to which such Fund or any of its property is subject. 2 "Chase": JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank), a New York banking corporation. "Closing Date": the date on which the conditions precedent set forth in Section 4.1 shall be satisfied and the Loan Documents are signed by the parties hereto and delivered to the offices of Pryor, Cashman, Sherman & Flynn, at 410 Park Avenue, New York, New York 10022, which date shall be the date as of which this Agreement is dated. "Code": the Internal Revenue Code of 1986, as amended from time to time. "Commitment": as to any Lender, the obligation of such Lender to make Loans to the Borrowers hereunder in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule II hereto. "Commitment Fee": as defined in Section 2.3. "Commitment Percentage": as to any Lender at any time, the percentage which such Lender's Commitment then constitutes of the aggregate Commitments of all Lenders (or, at any time after the Commitments of all the Lenders shall have expired or terminated, the percentage which the aggregate principal amount of such Lender's Loans then outstanding constitutes of the aggregate principal amount of the Loans of all the Lenders then outstanding). "Commitment Period": the period from and including the Closing Date, to but not including, the Termination Date. "Commonly Controlled Entity": an entity, whether or not incorporated, which is under common control with any Borrower within the meaning of Section 4001 of ERISA or is part of a group which includes any Borrower and which is treated as a single employer under Section 414 of the Code. "Confidential Information": as defined in Section 9.10(b) hereof. "Contractual Obligation": as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound. "Custody Agreement": as to each Fund, on its own behalf or if applicable on behalf of each investment portfolio thereof that is a Borrower, the Custody Agreement(s) set forth in Schedule IV hereto. "Default": any of the events specified in Section 7, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Designated Borrower": any Borrower designated as such on Schedule I hereto. 3 "Designated Borrower Asset Coverage Ratio Percentage": the percentage stated in Schedule I hereto for each Designated Borrower. "Deutsche IMA": Deutsche Investment Management Americas Inc., a Delaware corporation. "Dollars" and "$": dollars in lawful currency of the United States of America. "Eligible Lender": an entity that is a "Bank" (as defined in the 1940 Act) and is not otherwise prohibited by Section 17 of the 1940 Act from lending to any of the Borrowers. "ERISA": the Employee Retirement Income Security Act of 1974, as amended from time to time. "Event of Default": any of the events specified in Section 7, provided that any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. "Federal Funds Rate": for any day, the "offered rate", as determined by Chase, or, in the case of Swing Line loans, the Swing Line Lender, for overnight federal funds, which rate is determined day to day and will be reasonably representative of the market conditions at the times set. "Financing Lease": any lease of property, real or personal, the obligations of the lessee in respect of which are required in accordance with GAAP to be capitalized on a balance sheet of the lessee. "Fund": as defined in the Preamble hereto. "GAAP": generally accepted accounting principles in the United States of America in effect from time to time. "Governmental Authority": any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Guarantee Obligation": as to any Person (the "guaranteeing person"), any obligation of (a) the guaranteeing person or (b) another Person (including, without limitation, any bank under any letter of credit) to induce the creation of which the guaranteeing person has issued a reimbursement, counterindemnity or similar obligation, in either case guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or other obligations (the "primary obligations") of any other third Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of the guaranteeing person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain working capital or equity capital of the primary 4 obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the owner of any such primary obligation against loss in respect thereof; provided, however, that the term Guarantee Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing person's maximum reasonably anticipated liability in respect thereof as determined by such guaranteeing person in good faith. "Indebtedness": of any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar debt instrument, (c) all obligations of such Person under Financing Leases or Interest Rate Agreements, calculated daily on a marked-to-market basis in accordance with GAAP, (d) all obligations of such Person in respect of acceptances (as defined in Section 3-410 of the UCC) issued or created for the account of such Person, (e) all reimbursement obligations of such person arising out of any letters of credit, and (f) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof. "Interest Payment Date": as to any Loan, the Maturity Date for such Loan, or with respect to any prepayment, the date of such prepayment. "Interest Rate Agreement": any interest rate protection agreement, interest rate future, interest rate option, interest rate swap, interest rate cap or other interest rate hedge or arrangement under which a Fund, on its own behalf or if applicable on behalf of an investment portfolio thereof that is a Borrower, is a party or a beneficiary. "Interfund Lending": lending by a registered investment company or an investment portfolio thereof advised by Deutsche IMA to one or more other registered investment companies or investment portfolios thereof advised by Deutsche IMA, or borrowing by a registered investment company or an investment portfolio thereof advised by Deutsche IMA from one or more other registered investment companies or investment portfolios thereof advised by Deutsche IMA, in either case pursuant to an Interfund Lending Exemptive Order issued by the Securities and Exchange Commission, or otherwise allowed by any Applicable Law. "Interfund Lending Exemptive Order": an exemptive order, including any amended or supplemental order, issued by the Securities and Exchange Commission authorizing Interfund Lending. 5 "Interfund Loan": a loan to a Borrower pursuant to an Interfund Lending arrangement. "Investment Management Agreement": as to the Funds and each Borrower, the Investment Management Agreement set forth on Schedule III hereto. "Investment Policies": as to each Borrower, the policies and objectives for, and limits and restrictions on, investing by such Borrower set forth in the Prospectus relating to such Borrower. "Lenders": as defined in the Preamble hereto. "Lien": any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing). "Loan Documents": this Agreement, the Notes and all other agreements, instruments, and other documents entered into in connection with the transactions contemplated by this Agreement, and all amendments and supplements thereto. "Loans": all loans made pursuant to this Agreement; individually, a "Loan". "Material Adverse Effect": a material adverse effect on (a) the business, financial condition, operations or ability to timely perform any of its material obligations under the Loan Documents of a Fund or a Borrower or (b) the legality, validity, binding nature or enforceability of the Loan Documents or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder. "Maturity Date": as to each Loan, the date which is the earliest of (a) 30 days after the Borrowing Date for such Loan (or, with respect to a Swing Line Loan, seven days after the Borrowing date therefor), (b) the Termination Date and (c) the payment in full of such Loan. "Moody's": Moody's Investor Service, Inc. "1940 Act": the Investment Company Act of 1940, as amended, together with all rules and regulations promulgated from time to time thereunder. "Non-Excluded Taxes": as defined in Section 2.11. "Non-Recourse Person": as defined in Section 9.15. "Notes": the collective reference to the Revolving Credit Notes; individually, a "Note". 6 "Original Closing Dates": the closing dates of those certain Credit Agreements dated as of April 28, 1999 and November 22, 1999, as each has been amended, restated or otherwise modified from time to time, including without limitation as terminated, replaced and restated by any Termination, Replacement and Restatement Agreements, between, respectively, the Borrowers (as defined therein) party thereto, the Lenders (as defined therein) party thereto and the Administrative Agent. "Participant": as defined in Section 9.6(b). "Person": an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. "Plan": at a particular time, any employee benefit plan covered by ERISA which any applicable Person maintains. "Pro Rata Allocation": as to each Borrower, the percentage amount stated in Schedule I to this Agreement; provided that, if no Event of Default shall have occurred and be continuing, Deutsche IMA, on behalf of the Borrowers and without the consent of the Lenders, by written notice to the Administrative Agent, may change the Pro Rata Allocations from time to time in Deutsche IMA's sole discretion; provided further, that while an Event of Default has occurred and is continuing with respect to a Borrower, the Pro Rata Allocations may be changed in such manner as long as the Pro Rata Allocation of any such defaulting Borrower is not increased; and provided further, that, after any change in Pro Rata Allocations, the aggregate amount of all Pro Rata Allocations shall equal 100%. The delivery of such written notice shall constitute a representation and warranty by the Borrowers as of the date thereof that no Event of Default shall have occurred and be continuing with respect to each Borrower whose Pro Rata Allocation has been increased. "Prospectus": at a particular time, shall mean (i) as to a Fund that is itself a Borrower, the currently effective prospectus and statement of additional information of such Fund, and (ii) as to each other Borrower, the applicable portions of the currently effective prospectus(es) and statement(s) of additional information of the Fund of which such Borrower is an investment portfolio. "Register": as defined in Section 9.6(d). "Registration Statement": (i) as to each Fund that is itself a Borrower, that registration statement as filed with the Securities and Exchange Commission under the Securities Act and the 1940 Act, and (ii) as to each other Borrower, that portion applicable to such Borrower of the registration statement of the Fund of which such Borrower is an investment portfolio as filed with the Securities and Exchange Commission under the Securities Act and the 1940 Act; in each case as amended from time to time. 7 "Regulation T": Regulation T of the Board of Governors of the Federal Reserve System as in effect from time to time. "Regulation U": Regulation U of the Board of Governors of the Federal Reserve System as in effect from time to time. "Regulation X": Regulation X of the Board of Governors of the Federal Reserve System as in effect from time to time. "Required Lenders": at any time, Lenders the Commitment Percentages of which aggregate more than 50%. "Requirement of Law": as to any Person, the certificate of incorporation, by-laws, partnership agreement, or other organizational or governing documents of such Person, and any Applicable Law. "Responsible Officer": the chairman, vice chairman, president, treasurer, secretary, assistant treasurer or assistant secretary of a Fund, or, with respect to financial matters, the treasurer of such Fund. "Reverse Repurchase Transaction": a transaction whereby a Fund, on its own behalf or on behalf of a portfolio thereof that is a Borrower, (i) transfers possession of a security it owns (but not record ownership or the right to receive interest and principal payments thereon) to another party in exchange for a percentage of the value of the security (for purposes of this definition, the "payment proceeds"), and (ii) repossesses the security at an agreed upon future date by remitting the payment proceeds plus interest. "Revolving Credit Loan": as defined in Section 2.1. "Revolving Credit Note": as defined in Section 2.5(e). "S&P": Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies. "SFASC": Scudder Fund Accounting Corporation, a Delaware corporation. "SMFI": Scudder Mutual Funds, Inc., a registered open-end management investment company under the 1940 Act. "SPMI": Scudder Precious Metals, Inc., an offshore company organized under the laws of the Cayman Islands. "Securities Act": the Securities Act of 1933, as amended, together with all rules and regulations promulgated from time to time thereunder. 8 "Senior Securities Representing Indebtedness": any Senior Security other than stock. "Senior Security": any bond, debenture, note or similar obligation or instrument constituting a security and evidencing indebtedness (including without limitation all Loans under this Agreement), and any share of beneficial interest or common stock, as the case may be, of a Fund, on its own behalf or if applicable on behalf of each investment portfolio thereof that is a Borrower, of a class (other than a class established in accordance with Rule 18f-3 of the 1940 Act) having priority over any other class of shares of such Fund as to distribution of assets or payment of dividends. "Subsidiary": as to any Person, a corporation, partnership or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. "Swap Obligation": as to any Person, any obligation of such Person arising out of (i) any "swap agreement" (as defined in Section 101(53B) of the Bankruptcy Code), (ii) any equity swap, floor, collar, cap or option transaction, (iii) any option to enter into any of the foregoing or (iv) any combination of the foregoing. "Swing Line Commitment": the obligation of the Swing Line Lender to make Swing Line Loans pursuant to Section 2.13 hereof in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite the Swing Line Lender's name on Schedule II hereto. "Swing Line Lender": State Street Bank and Trust Company. "Swing Line Loans": as defined in Section 2.13 hereof. "Swing Line Participation Amount": as defined in Section 2.15(c) hereof. "Termination Date": April 10, 2003, or such earlier date on which the Commitments shall terminate as provided herein. "Total Assets": at any time, all assets of a Borrower which in accordance with GAAP would be classified as assets on a balance sheet of such Borrower prepared as of such time; provided, however, that the term Total Assets shall not include (a) equipment, (b) securities owned by a Borrower which are in default and (c) deferred organizational and offering expenses. "Transferee": as defined in Section 9.6(f). "UCC": the Uniform Commercial Code as from time to time in effect in the State of New York. 9 1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms defined in this Agreement shall have such defined meanings when used in any Note or other Loan Document or any certificate or other document made or delivered pursuant hereto. (b) As used herein and in any Notes or other Loan Document, and any certificate or other document made or delivered pursuant hereto, accounting terms relating to any Fund or Borrower not defined in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent not defined, shall have the respective meanings given to them under GAAP (as consistently applied). (c) The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, subsection, Schedule and Exhibit references are to this Agreement unless otherwise specified. (d) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. 1.3 Assumptions Regarding Structure. For the sake of clarity and construction, the parties hereto hereby set forth their acknowledgment and agreement that each Borrower that is an investment portfolio of a Fund is not a separately existing legal entity entitled to enter into contractual agreements or to execute instruments and, for these reasons, any such Fund is executing this Agreement and each respective Note on behalf of its investment portfolios, as Borrowers, and that such investment portfolios will utilize the Loans thus made on their behalf. Notwithstanding anything to the contrary in this Agreement, each Borrower (including without limitation each Fund that is itself a Borrower) shall be liable hereunder only for the Loans made to such Borrower hereunder and interest thereon and for the fees and expenses associated therewith and as otherwise set forth herein, and in no event shall any Borrower or its assets be held liable for the Loans made to any other Borrower hereunder or interest thereon or for the fees and expenses associated therewith. SECTION 2. AMOUNT AND TERMS OF COMMITMENTS 2.1 Commitments. Subject to the terms and conditions hereof, each Lender severally agrees to make revolving credit loans ("Revolving Credit Loans") to each Borrower, from time to time during the Commitment Period, in an aggregate principal amount at any one time outstanding not to exceed the amount of such Lender's Commitment. During the Commitment Period, each Borrower may use Commitments by borrowing, prepaying Loans in whole or in part, and reborrowing, all in accordance with the terms and conditions hereof and with such procedures as may be agreed to among the Borrowers from time to time; provided that at no time may the aggregate principal amount outstanding of Revolving Credit Loans and Swing Line Loans to all Borrowers exceed the Aggregate Commitment. 10 2.2 Procedure for Borrowing. A Borrower may borrow under the Commitments during the Commitment Period on any Business Day, provided that the Borrower (or a Fund on its behalf) shall give the Administrative Agent irrevocable notice (which notice must be received by the Administrative Agent prior to 3:00 P.M. New York City time on the requested Borrowing Date in accordance with Section 9.2 hereof), specifying (i) the amount to be borrowed, and (ii) the requested Borrowing Date. Subject to Section 2.15 hereof, the aggregate amount of each borrowing by a Borrower under the Commitments on any Borrowing Date shall be in an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof (or, if the then Available Commitments are less than $500,000, such lesser amount), provided that the aggregate amount of all borrowings by the Borrowers then borrowing on any Borrowing Date shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then Available Commitments are less than $5,000,000, such lesser amount). Upon receipt of any such notice from a Borrower (or a Fund on its behalf), the Administrative Agent shall promptly notify each Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available to the Administrative Agent for the account of such Borrower at the office of the Administrative Agent specified in Section 9.2 prior to 4:00 P.M., New York City time, on the Borrowing Date requested by such Borrower in funds immediately available to the Administrative Agent. Such borrowing will then be made available to such Borrower on such Borrowing Date by the Administrative Agent transferring by wire to the custodian of and for the account of such Borrower the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent; provided that if, on the Borrowing Date of any Revolving Credit Loans of a Borrower, any Swing Line Loans to such Borrower shall be outstanding, the proceeds of such Revolving Credit Loans to such Borrower shall first be applied to pay in full such Swing Line Loans, with any remaining proceeds to be made available to such Borrower as provided above. Anything to the contrary in this Agreement notwithstanding, each of the Administrative Agent and the Swing Line Lender may rely solely upon a telephonic request which it reasonably believes is made on behalf of a Borrower in making Revolving Credit Loans or Swing Line Loans hereunder. Each such telephonic request for a Revolving Credit Loan or Swing Line Loan shall constitute a representation and warranty by the applicable Borrower as of the date thereof that the conditions contained in Section 4.2 have been satisfied with respect to such Borrower. Such telephonic request shall be confirmed promptly in writing, by facsimile or other mutually acceptable electronic transmission medium, which written confirmation must be received by the Administrative Agent or Swing Line Lender, as the case may be, on the proposed Borrowing Date in form and substance satisfactory to the Administrative Agent or Swing Line Lender, as the case may be. Each Borrower agrees to indemnify and hold the Administrative Agent and Swing Line Lender harmless for any reasonable action taken, including, without limitation, the making of Revolving Credit Loans or Swing Line Loans to such Borrower hereunder, or loss or expense incurred, by the Administrative Agent or Swing Line Lender in good faith reliance upon such telephonic request for a Revolving Credit Loan or Swing Line Loan; provided that such Borrower shall not be liable for any such action, loss or expense to the extent the same shall result solely from the gross negligence or willful misconduct of the Administrative Agent or the Swing Line Lender. 2.3 Fees. (a) Each Borrower severally, and neither jointly nor jointly and severally, agrees to pay to the Administrative Agent for the account of each Lender such Borrower's Pro 11 Rata Allocation (as adjusted from time to time in accordance with the terms hereof) of a commitment fee ("Commitment Fee") during the period which shall begin on the first day of the Commitment Period and shall extend to the Termination Date, which Commitment Fee shall be a quarterly fee, computed at the rate of 0.09% per annum on the average daily amount of the Available Commitments during each calendar quarter. Such Commitment Fee shall be payable quarterly in arrears on the last Business Day of each March, June, September and December and on the Termination Date, commencing on the first of such dates to occur after the date hereof. Solely for the purpose of calculating the Commitment Fee, Swing Line Loans will not be deemed a utilization of the Aggregate Commitments of all Lenders. (b) Each Borrower severally agrees to pay the Administrative Agent for the account of the Administrative Agent the fees to which it has separately agreed. 2.4 Termination and Reduction of Commitments. (a) Each Borrower shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to terminate all Commitments with respect to such Borrower. Any termination of all Commitments to a Borrower shall be effective as of the last day of the calendar quarter in which such notice is given, and shall be accompanied by prepayment in full of the Loans to such Borrower then outstanding, and payment of such Borrower's Pro Rata Allocation of (i) any accrued Commitment Fees payable by such Borrower hereunder and (ii) any other accrued fees, expenses or indemnified liabilities payable by such Borrower hereunder. The amount of the Aggregate Commitment shall not be affected by any Borrower's termination. Prior to such termination, Deutsche IMA shall notify the Administrative Agent in writing as to the Pro Rata Allocations of the remaining Borrowers, effective as of the termination, which notice shall constitute a representation and warranty by each of the remaining Borrowers that no Event of Default has occurred and is continuing with respect to each Borrower whose Pro Rata Allocation has been increased. (b) Interest accrued on the amount of any prepayment relating to such termination and any unpaid Commitment Fee accrued hereunder shall be paid on the date of such termination. (c) Upon the effective date of such termination, the terminating Borrower shall no longer be obligated to pay Commitment Fees hereunder or any share of any other fees, expenses, or indemnified liabilities that may accrue thereafter. (d) The Borrowers shall have the right, upon not less than three Business Days' notice to the Administrative Agent, to reduce the Aggregate Commitment. Any such reduction shall be accompanied by prepayment in full of the Loans to the Borrowers then outstanding that are in excess of the Aggregate Commitment as reduced. (e) The Administrative Agent shall provide each Lender with prompt notice of any Commitment changes pursuant to this Section 2.4. 2.5 Repayment of Loans; Evidence of Debt. (a) Each Borrower hereby severally and unconditionally, but not jointly or jointly and severally, promises to pay to the Administrative 12 Agent for the account of each Lender the then unpaid principal amount of each Loan of such Lender to such Borrower on the Maturity Date for such Loan (or such earlier date on which the Loans become due and payable pursuant to Section 2.6(b) or Section 7). Each Borrower hereby further severally, but not jointly or jointly and severally, agrees to pay to the Administrative Agent for the account of each Lender interest on the unpaid principal amount of the Loans to such Borrower from time to time outstanding from the date hereof until payment in full thereof at the rates per annum, and on the dates, set forth in Section 2.7. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of each Borrower to such Lender resulting from each Loan of such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. (c) The Administrative Agent shall maintain the Register pursuant to Section 9.6(d), and a subaccount therein for each Lender, in which shall be recorded (i) the amount of each Loan made hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any principal or interest and any other payments received by the Administrative Agent hereunder from each Borrower and each Lender's share thereof. The Administrative Agent shall provide a copy of the Register to each Borrower upon request. (d) The entries made in the Register and the accounts of each Lender maintained pursuant to Section 2.5(b) shall, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain the Register or any such account, or any error therein, shall not in any manner affect the obligation of any Borrower to repay (with applicable interest) the Loans made to such Borrower by such Lender in accordance with the terms of this Agreement. (e) Each Fund, on its own behalf or if applicable on behalf of each investment portfolio thereof that is a Borrower, agrees that, upon the request of any Lender to the Administrative Agent, such Fund will execute and deliver to such Lender a promissory note evidencing the Loans of such Lender to such Fund, or if applicable such Borrower, substantially in the form of Exhibit 2.5(e) with appropriate insertions as to date and principal amount (a "Revolving Credit Note"). (f) The obligations of each Borrower under its Notes and this Agreement shall be several and neither joint nor joint and several. Notwithstanding anything to the contrary contained in this Agreement, the parties hereto acknowledge and agree that the sole source of payment of the obligations of each Borrower hereunder, including, without limitation, the principal of and interest on each Loan made hereunder to any Borrower, the Commitment Fee payable pursuant to Section 2.3 and any other amounts attributable to the Loans made hereunder to any Borrower shall be the revenues and assets of such Borrower, and not the revenues and assets of any other Borrower (except as provided in Section 9.5(b)) or the revenues and assets of a Fund acting on behalf of a Borrower (except to the extent of the revenues and assets of such Borrower). 13 2.6 Optional and Mandatory Prepayments. (a) Each Borrower may prepay the Loans made to it, in whole or in part, without premium or penalty, upon at least one Business Day's irrevocable notice to the Administrative Agent, specifying the date and amount of prepayment. Upon receipt of any such notice the Administrative Agent shall promptly notify each Lender thereof. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein. Partial prepayments shall be in an aggregate principal amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof. (b) If, at any time and from time to time, either (i) (x) for each Borrower other than Designated Borrowers, the Asset Coverage Ratio for all borrowings of such Borrower shall be less than 300%, or (y) for each Designated Borrower, the Asset Coverage Ratio shall be less than the Designated Borrower Asset Coverage Ratio Percentage for such Designated Borrower, or (ii) the aggregate amount of all borrowings of a Borrower (including without limitation the Loans made to a Borrower) then outstanding exceeds the borrowing limits provided in such Borrower's Prospectus; then in each case within three Business Days thereafter such Borrower shall repay Loans made to such Borrower to the extent necessary to ensure that (x) the Asset Coverage Ratio of all borrowings of such Borrower after such payments is in compliance with applicable covenants concerning minimum Asset Coverage Ratios set forth in this Agreement and (y) the aggregate amount of all borrowings made to such Borrower then outstanding does not after such payments exceed such limits, as the case may be. 2.7 Interest Rates and Payment Dates. (a) Each Loan shall bear interest at a rate per annum equal to the Federal Funds Rate plus the Applicable Margin. (b) Upon (i) the occurrence and continuance of any Event of Default specified in Section 7(e) with respect to a Borrower or (ii) notice given by the Administrative Agent or the Required Lenders to the Borrower of any other Event of Default, all Loans outstanding to such Borrower shall bear interest at a rate per annum which is the rate that would otherwise be applicable thereto pursuant to the provisions of section 2.7(a), plus 2% per annum. If all or a portion of (i) the principal amount of any Loan, (ii) any interest payable thereon or (iii) any Commitment Fee or other amount payable hereunder shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the Federal Funds Rate plus the Applicable Margin plus 2% per annum from the date of such non-payment until such amount is paid in full. For the avoidance of doubt, the parties hereby agree that the maximum amount of interest payable on the principal amount of any Loan pursuant to this Section 2.7 shall not exceed the sum of the Federal Funds Rate plus the Applicable Margin plus 2% per annum. (c) Interest shall be payable in arrears on each Interest Payment Date, provided that interest accruing pursuant to the second sentence of paragraph (b) of this section 2.7 shall be payable from time to time on demand. 2.8 Computation of Interest and Fees. (a) Commitment Fees and interest shall be calculated on the basis of a 360-day year for the actual days elapsed. 14 (b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on each Borrower and the Lenders in the absence of manifest error. 2.9 Pro Rata Treatment and Payments. (a) Each borrowing by a Borrower from the Lenders hereunder, each payment by a Borrower on account of any Commitment Fee hereunder and any reduction of the Commitments of the Lenders shall be made pro rata according to the respective Commitment Percentages of the Lenders. Each payment (including each prepayment) by a Borrower on account of principal of and interest on the Loans shall be made pro rata according to the respective outstanding principal amounts of the Loans of such Borrower then held by the Lenders. All payments (including prepayments) to be made by a Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made no later than 12:00 Noon New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Administrative Agent's office specified in Section 9.2 hereof, in Dollars, in immediately available funds and without set-off, counterclaim or deduction of any kind (other than deductions expressly permitted by this Agreement). The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. (b) Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its Commitment Percentage of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to a Fund, on its own behalf or if applicable on behalf of an investment portfolio thereof that is a Borrower, a corresponding amount. If such amount is not made available by a Lender to the Administrative Agent by the required time on the Borrowing Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the daily average Federal Funds Rate for the period commencing with such Borrowing Date until such Lender makes such amount immediately available to the Administrative Agent (it being understood that none of the Borrowers shall be obligated to repay any such interest paid by the non-funding Lender). A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. If such Lender's Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender within three Business Days of such Borrowing Date, the Administrative Agent shall also be entitled to recover such amount with interest thereon from the date of borrowing at the rate per annum applicable to Loans hereunder, on or before three Business Days following demand therefor, from the relevant Borrower (and such Borrower may borrow under the Commitments or under the Swing Line Commitment to satisfy such demand; provided that, for purposes of determining the Available Commitment, the Commitment of any non-funding Lender shall be excluded). The Administrative Agent shall request of each Lender other than the non-funding Lender that it fund the non-funding Lender's defaulted Commitment (each such other Lender having no commitment or obligation so to fund such Commitment), and if such funding does not occur the 15 Administrative Agent shall use its reasonable efforts to obtain funding of such defaulted Commitment from third-party lenders. 2.10 Requirements of Law. (a) If any Lender shall have determined that the adoption of or any change in any Requirement of Law (in each case after the date hereof) of any Governmental Authority regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender's or such corporation's capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) by an amount determined by such Lender, in its reasonable discretion, to be material, then from time to time, each Borrower shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. (b) If any Lender becomes entitled to claim, and determines that it will collect from the Borrowers, any additional amounts pursuant to this Section, it shall promptly notify the Borrowers (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled by providing a certificate setting forth in reasonable detail the basis for the claim for additional amounts, the amounts required to be paid by the Borrowers to such Lender, and the computations made by such Lender to determine the amounts; provided that such Lender shall not be required to disclose any confidential information. Such certificate as to any additional amounts payable pursuant to this Section submitted by such Lender to the Borrowers (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. No Borrower shall be responsible to compensate such Lender for additional amounts attributable to another Borrower's Loans. (c) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrowers of the change in the Requirement of Law giving rise to such increased costs or reductions and of such Lender's intention to claim compensation therefor; provided further that, if the change in the Requirement of Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof. 2.11 Taxes. (a) All payments made by any Borrower under this Agreement and any Notes shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding all present and future income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender as a 16 result of a present or former connection between the Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing such tax or any political subdivision or taxing authority thereof or therein (other than any such connection arising solely from the Administrative Agent or such Lender having executed, delivered or performed its obligations or received a payment under, or enforced, this Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder or under any Note, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that a Borrower shall not be required to increase any such amounts payable to any Lender that is organized under the laws of a jurisdiction outside the United States of America if such Lender fails to comply with the requirements of paragraph (b) of this Section. Whenever any Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter such Borrower shall send to the Administrative Agent for its own account or for the account of such Lender, as the case may be, a certified copy of an original official receipt received by such Borrower showing payment thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent the required receipts or other required documentary evidence, such Borrower shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or penalties that may become payable by the Administrative Agent or any Lender as a result of any such failure. The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (b) Each Lender that is organized under the laws of a jurisdiction outside the United States of America shall: (i) deliver to Deutsche IMA and the Administrative Agent prior to any payments being made under this Agreement or the Notes (A) two properly completed copies of an appropriate United States Internal Revenue Service Form W-8 or W-9, or successor applicable form, as the case may be; (ii) deliver to Deutsche IMA and the Administrative Agent two further properly completed copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to Deutsche IMA; and (iii) obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by Deutsche IMA or the Administrative Agent; unless in any such case an event (including, without limitation, any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from 17 lawfully completing and delivering any such form with respect to it and such Lender so advises Deutsche IMA and the Administrative Agent. Such Lender shall certify (A) in the case of an appropriate Form W-8, that it is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes and (B) in the case of an appropriate Form W-8 or W-9, as applicable, that it is entitled to an exemption from United States backup withholding tax. Each Person that shall become a Lender or a Participant pursuant to Section 9.6 shall, upon the effectiveness of the related transfer, be required to provide all of the forms and statements required pursuant to this Section, provided that in the case of a Participant such Participant shall furnish all such required forms and statements to the Lender from which the related participation shall have been purchased. 2.12 Change of Lending Office; Replacement of Lender. (a) Each Lender agrees that if it makes any demand for payment under Section 2.10, or any additional amounts are payable under Section 2.11, it will use reasonable efforts (consistent with its internal policy and legal and regulatory restrictions and so long as such efforts would not be disadvantageous to it, as determined in its sole discretion) to designate a different lending office if the making of such a designation would reduce or obviate the need for a Borrower to make payments under Section 2.10 or payment of additional amounts under Section 2.11. (b) If any Lender shall have required compensation pursuant to Section 2.10, or payment of additional amounts under Section 2.11, the Borrowers shall have the right, with the consent of the Administrative Agent (which shall not be unreasonably withheld), to substitute such Lender with an Eligible Lender (a "Replacement Lender") satisfactory to the Borrowers (which may be one or more of the other then existing Lenders if they, in their sole discretion, elect to become such Replacement Lender) to assume the Commitment of such Lender and to purchase the Notes held by such Lender, if any, for an amount equal to the principal of, and accrued and unpaid interest on, such Notes, together with the fee specified in Section 9.6(e) and any other costs reasonably incurred by such Lender in connection with its sale of such Notes and the assignment of such Commitment (without recourse to or warranty by such Lender and subject to all amounts due and owing to such Lender under this Agreement having been paid in full). Upon the exercise of such right by the Borrowers and the satisfaction of such conditions thereto, such Lender shall convey its interest to the Replacement Lender in accordance with the procedures set forth in Section 9.6(c). 2.13 Swing Line Commitment: Subject to the terms and conditions hereof, the Swing Line Lender agrees to make available to each Borrower a portion of the credit otherwise available under the Commitments from time to time during the Commitment Period by making swing line loans ("Swing Line Loans") to such Borrower in an aggregate principal amount not to exceed at any one time outstanding the Swing Line Commitment; provided, however, that the Swing Line Loans outstanding at any time, when aggregated with the Swing Line Lender's other outstanding Revolving Credit Loans hereunder, may not exceed the Swing Line Lender's Commitment then in effect; and provided further, however, that on the date of the making of any Swing Line Loan and while any Swing Line Loan is outstanding, the sum of the aggregate principal amount of all outstanding Revolving Credit Loans and Swing Line Loans shall not exceed the total Commitments (less the Commitment of any non-funding Lender referred to in Section 2.9(b)). During the Commitment Period applicable to each Borrower, such Borrower 18 may use the Swing Line Commitment by borrowing, repaying and reborrowing, all in accordance with the terms and conditions hereof. Each Swing Line Loan shall bear interest at a rate per annum equal to the Federal Funds Rate plus the Applicable Margin. 2.14 Procedure for Swing Line Borrowing. Whenever a Borrower desires that the Swing Line Lender make Swing Line Loans under Section 2.13, the Borrower (or the Fund of which it is an investment portfolio) shall give the Swing Line Lender irrevocable telephonic notice confirmed promptly in writing, by facsimile or other mutually acceptable electronic transmission medium, to the attention of Allison L. King at facsimile number: 617-664-3941 or such other person or persons which may be designated by the Swing Line Lender from time to time (which telephonic notice must be received by the Swing Line Lender not later than 4:00 P.M., New York City time, on the proposed Borrowing Date, and which written confirmation must be received by the Swing Line Lender on the proposed Borrowing Date in form and substance satisfactory to the Swing Line Lender), specifying the amount of each requested Swing Line Loan. Each borrowing under the Swing Line Commitment shall be in an amount equal to $50,000 or an integral multiple of $50,000 in excess thereof. Upon receipt of any such notice from a Borrower (or the Fund on its behalf), the Swing Line Lender shall promptly notify the Administrative Agent thereof. The Swing Line Lender shall make the amount of such borrowing available to the Borrower, on the Borrowing Date requested by such Borrower, by transferring such amount by wire or book entry to the appropriate custodian of and for the account of such Borrower such Swing Line Loan in immediately available funds. 2.15 Refunding of Swing Line Loans (a) Either the Swing Line Lender or the Administrative Agent, at any time in its sole and absolute discretion may, and on the seventh day (or if such day is not a Business Day, the next Business Day following the seventh day) after the Borrowing Date with respect to any Swing Line Loans to a Borrower shall, on behalf of such Borrower (and each Borrower hereby irrevocably directs the Swing Line Lender and Administrative Agent to so act on its behalf and with respect to such Borrower), upon notice given by the Swing Line Lender to the Administrative Agent, or by the Administrative Agent, no later than 10:00 A.M., New York City time, on the relevant refunding date, request each Lender to make, and each Lender hereby agrees to make, a Revolving Credit Loan to such Borrower, at the rate applicable to the Swing Line Loans of such Borrower, in an amount equal to such Lender's Commitment Percentage of the amount of such Swing Line Loans of such Borrower (the "Refunded Swing Line Loans") outstanding on the date of such notice, to repay the Swing Line Lender. Each Lender shall make the amount of such Revolving Credit Loan available to the Administrative Agent at its office set forth in Section 9.2 in immediately available funds, no later than 1:00 P.M., New York City time, on the date of such notice. The proceeds of such Revolving Credit Loans shall be distributed by the Administrative Agent to the Swing Line Lender and immediately applied by the Swing Line Lender to repay the Refunded Swing Line Loans. Effective on the day such Revolving Credit Loans are made, the portion of the Swing Line Loans so paid shall no longer be outstanding as Swing Line Loans. (b) The making of any Swing Line Loan hereunder at the request of a Borrower shall be subject to the satisfaction of the applicable conditions precedent thereto set forth in Section 4 (unless otherwise waived in accordance with Section 9.1). 19 (c) If prior to the making of a Revolving Credit Loan to a Borrower pursuant to Section 2.15(a) one of the events described in paragraph (e) of Section 7 shall have occurred with respect to such Borrower, each Lender severally, unconditionally and irrevocably agrees that it shall purchase a participating interest in the applicable Swing Line Loans ("Unrefunded Swing Line Loans") in an amount equal to the amount of Revolving Credit Loans which would otherwise have been made by such Lender pursuant to Section 2.15(a). Each Lender will immediately transfer to the Administrative Agent, in immediately available funds, the amount of its participation (the "Swing Line Participation Amount"), and the proceeds of such participation shall be distributed by the Administrative Agent to the Swing Line Lender in such amount as will reduce the amount of the participating interest retained by the Swing Line Lender in its Swing Line Loans to the amount of the Revolving Credit Loans which were to have been made by it pursuant to Section 2.15(a). (d) Whenever, at any time after the Swing Line Lender has received from any Lender such Lender's Swing Line Participation Amount, the Swing Line Lender receives any payment on account of the Swing Line Loans, the Swing Line Lender will distribute to such Lender its Swing Line Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender's participating interest was outstanding and funded and, in the case of principal and interest payments, to reflect such Lender's pro rata portion of such payment if such payment is not sufficient to pay the principal of and interest on all Swing Line Loans then due); provided, however, that in the event that such payment received by the Swing Line Lender is required to be returned, such Lender will return to the Swing Line Lender any portion thereof previously distributed to it by the Swing Line Lender. (e) Each Lender's obligation to make the Revolving Credit Loans referred to in Section 2.15(a) and to purchase participating interests pursuant to Section 2.15(c) shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Section 4; (iii) any adverse change in the condition (financial or otherwise) of any Borrower; (iv) any breach of this Agreement or any other Loan Document by any Borrower or any Lender; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing, other than solely the gross negligence or willful misconduct of the Swing Line Lender in making a Swing Line Loan with actual knowledge by the officer responsible for the making of such Swing Line Loan that such Swing Line Loan is made without satisfaction of the applicable conditions precedent thereto set forth in Section 4 and without a waiver in accordance with Section 9.1. (f) Each Borrower agrees to pay upon demand by the Swing Line Lender any Swing Line Loan made to such Borrower, or portion thereof, which is not refunded by the Lenders pursuant to this Section 2.15 (and such Borrower may borrow a Revolving Credit Loan under the Commitments to satisfy such demand; provided that, for purposes of determining the Available Commitment, the Commitment of any non-refunding Lender shall be excluded). Notwithstanding anything to the contrary contained in this Agreement, any Lender that fails to make available a Revolving Credit Loan pursuant to Section 2.15(a) or purchase a participating 20 interest in a Swing Line Loan pursuant to Section 2.15(c) shall be deemed delinquent (a "Delinquent Lender") and to the extent a Borrower subsequently repays any outstanding Revolving Credit Loans, the Delinquent Lender's pro rata share of such repayment, if any, shall be paid by the Administrative Agent to the Swing Line Lender, until the Delinquent Lender's pro rata share of such Swing Line Loan is repaid in full. 2.16 Designation of Additional Borrowers; Amendments to Schedule I. (a) Other portfolios of the Funds and other investment companies registered under the 1940 Act, in either case (a) which have at least $2,000,000 in Total Assets, (b) are (I) equity funds, (II) fixed income funds or (III) any combination thereof, in each case whether investing in domestic or foreign securities or any combination thereof and (c) for which Deutsche IMA or a Subsidiary of Deutsche IMA acts as the investment manager, may, with the prior written consent of the Administrative Agent, each Lender and each Fund, become parties to this Agreement in addition to those Borrowers listed on Schedule I, and be deemed Borrowers for all purposes of this Agreement by executing an instrument substantially in the form of Exhibit 2.16(a) hereto (with such changes therein as may be approved by the Administrative Agent and the Lenders), which instrument shall (x) have attached to it a copy of this Agreement (as the same may have been amended) with a revised Schedule I reflecting the participation of such additional portfolio or investment company, including (if the Administrative Agent deems it appropriate that the additional Borrower be a Designated Borrower) the appropriate Designated Borrower Asset Coverage Ratio Percentage as determined by the Administrative Agent, and any prior revisions to Schedule I effected in accordance with the terms hereof and (y) be accompanied by the documents and instruments required to be delivered by the Borrowers pursuant to Section 4.1, including, without limitation, an opinion of counsel for the Borrower substantially in the form of Exhibit 4.1(g) hereto. (b) No Person shall be admitted as a party to this Agreement as a Borrower unless at the time of such admission and after giving effect thereto: (i) the representations and warranties set forth in Section 3 shall be true and correct with respect to such Borrower; (ii) such Borrower shall be in compliance in all material respects with all of the terms and provisions set forth herein on its part to be observed or performed at the time of the admission and after giving effect thereto; and (iii) no Default or Event of Default with respect to such Borrower shall have occurred and be continuing. 2.17 Interfund Lending. (a) Notwithstanding anything in this Agreement to the contrary (including, without limitation, Sections 6.2, 6.3 and 6.8 hereof), Interfund Lending shall be expressly permitted hereunder, and the mere making or receipt of an Interfund Loan in and of itself shall not, with respect to any Borrower a party thereto (as a lender or a borrower), constitute a violation of any condition precedent, representation or covenant contained herein or constitute a Default or Event of Default; provided that all other terms and conditions of this Agreement are satisfied, and provided further, that: (i) such Interfund Lending (1) is not otherwise prohibited by law, (2) has been duly authorized by each party thereto, (3) is consistent with the terms of the Interfund Lending Exemptive Order, (4) is not in contravention of the Borrower's Prospectus, and (5) is deemed to 21 be a Senior Security for purposes of calculating the Asset Coverage Ratio as it applies to the Borrower; (ii) a Borrower may not be a lender of an Interfund Loan at any time during which the Borrower has any Loan outstanding; (iii) if, at any time, an Interfund Loan is outstanding to a Borrower that has any Loans outstanding as well, and if at such time the Asset Coverage Ratio for the Borrower shall be less than the required Asset Coverage Ratio for the Borrower pursuant to this Agreement, then the Borrower shall repay such outstanding Interfund Loans and Loans on a pro rata basis and on the same repayment schedule (subject, in any and all event, to such Borrower's obligation to prepay in accordance with 2.6(b) hereof) to the extent necessary to ensure that the Asset Coverage Ratio of all borrowings of the Borrower after such payments is in compliance with applicable covenants concerning minimum Asset Coverage Ratios set forth in this Agreement; (iv) if any payment with respect to an Interfund Loan would cause the Asset Coverage Ratio for a Borrower to be less than the required Asset Coverage Ratio for such Borrower pursuant to this Agreement, then the Borrower shall make any payments with respect to such outstanding Interfund Loans on a pro rata basis with payments with respect to Loans to the extent necessary to ensure that the Asset Coverage Ratio of all borrowings of such Borrower after such payments is in compliance with applicable covenants concerning minimum Asset Coverage Ratios set forth in this Agreement; (v) a default by a Borrower with respect to an Interfund Loan shall constitute an Event of Default with respect to the Borrower for purposes of this Agreement; (vi) if a Default or Event of Default with respect to a Borrower has occurred and is continuing under this Agreement other than as specified above in Section 2.17(a)(iii), then any payments made with respect to outstanding Interfund Loans shall be made on a pro rata basis with payments with respect to Loans until such Default or Event of Default is cured or waived; (vii) if at any time a Borrower should secure an Interfund Loan or Interfund Loans with collateral, then the Borrower shall collateralize each Loan to such Borrower under this Agreement (I) in substantially the same manner and to substantially the same extent as is required with respect to each Interfund Loan to the Borrower, as more particularly described in the Interfund Lending Exemptive Order and (II) with collateral having substantially the same liquidity and substantially similar credit characteristics as that of the collateral securing such Interfund Loan or Interfund Loans, provided that the collateral coverage percentage ratio for Loans shall not be less than the greater of (x) 102% or (y) the collateral coverage ratio for Interfund Loans; and (viii) for purposes of calculating the Asset Coverage Ratio of a Borrower, the amount equal to the aggregate value of the collateral securing an Interfund Loan or Loan minus the amount of such Interfund Loan or Loan, respectively, shall be subtracted from the value of Total Assets in the numerator of such Asset Coverage Ratio. 22 (b) Without otherwise limiting the purposes for which proceeds of a Loan may be used as specified in Section 5.8 of this Agreement, a Borrower shall be expressly permitted to use the proceeds of a Loan to repay an outstanding Interfund Loan of the Borrower, subject to the conditions set forth in paragraph (a) of this Section 2.17 and the other conditions of this Agreement (including without limitation Section 5.8 hereof). SECTION 3. REPRESENTATIONS AND WARRANTIES To induce the Administrative Agent and the Lenders to enter into this Agreement and to make the Loans, each Fund, on behalf of itself and if applicable on behalf of each investment portfolio thereof that is a Borrower, hereby represents and warrants to the Administrative Agent and each Lender that (it being agreed that each Fund represents and warrants only to matters with respect to itself and if applicable each Borrower that is an investment portfolio thereof): 3.1 Financial Condition. For each Borrower, the statement of assets and liabilities as of such Borrower's most recently ended fiscal year for which annual reports have been prepared and the related statements of operations and of changes in net assets for the fiscal year ended on such date, copies of which financial statements, certified by the independent public accountants for the Fund, have heretofore been delivered to each Lender, fairly present, in all material respects, the financial position of such Borrower as of such date and the results of its operations for such period, in conformity with GAAP (as consistently applied). 3.2 No Change. For each Borrower, since the date of the statement of assets and liabilities for the most recently ended fiscal year for which annual reports have been prepared for such Borrower (such date, the "Reporting Date"), there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect with respect to such Borrower. The Administrative Agent and the Lenders acknowledge that Deutsche IMA has undergone a change of control since the Reporting Date and, based upon the information that the Borrowers have made available to them, do not deem such change of control, in and of itself, to have resulted in a Material Adverse Effect. (For the avoidance of doubt, the representation contained in this Section 3.2 shall be made on and as of the date hereof only and shall not be brought down at the time of any borrowing hereunder on any subsequent date.) 3.3 Existence; Compliance with Law. Each Fund (a) is duly organized, validly existing and, with respect to each Fund that is not a Massachusetts business trust, in good standing, under the laws of the jurisdiction of its organization, (b) has the corporate power and authority as to those Funds that are organized as corporations, and the trust power and authority as to those Funds that are organized as trusts; and in each case the legal right to own its property and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or business trust and, if a corporation, is in good standing under the laws of each jurisdiction where its ownership of property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law, except to the extent that the failure to comply therewith, and with clause (c) of this Section 3.3, could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. The shares of each Fund have been validly authorized. 23 3.4 Power; Authorization; Enforceable Obligations. Each Fund, acting on its own behalf and if applicable on behalf of each investment portfolio thereof that is a Borrower, has the corporate power and authority as to those Funds that are organized as corporations and the trust power and authority as to the Funds that are organized as trusts, and in each case the legal right, to execute, deliver and perform the Loan Documents to which it is a party and to borrow hereunder and thereunder on its own behalf or if applicable on behalf of each investment portfolio thereof that is a Borrower, and has taken all necessary action to authorize the borrowings on the terms and conditions of this Agreement and any Notes and to authorize the execution, delivery and performance of the Loan Documents to which it is a party including, but not limited to, receiving the approval of the majority of non-interested members of the board of trustees or board of directors of each Fund as to entering into the transactions contemplated hereby. No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Loan Documents to which such Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, is a party. This Agreement has been, and each other Loan Document to which a Fund is a party will be, duly executed and delivered by such Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof that are Borrowers. This Agreement constitutes, and each other Loan Document to which a Fund is a party when executed and delivered will constitute, a legal, valid and binding obligation of such Fund (individually and on behalf of each Borrower as applicable) enforceable against such Fund (individually and on behalf of each Borrower as applicable) in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). 3.5 No Legal Bar. The execution, delivery and performance of the Loan Documents to which each Fund, on its own behalf or if applicable on behalf of an investment portfolio thereof that is a Borrower, is a party, the borrowings hereunder and the use of the proceeds thereof (i) will not violate any material Requirement of Law (including, without limitation, the 1940 Act) or material Contractual Obligation of any Fund or any Borrower and (ii) will not result in, or require, the creation or imposition of any material Lien on any of their respective material properties or revenues pursuant to any such Requirement of Law or Contractual Obligation. 3.6 No Material Litigation. No litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, threatened by or against such Fund or such Borrowers or against any of their respective properties or revenues (a) with respect to any of the Loan Documents or any of the transactions contemplated hereby or thereby, or (b) which could reasonably be expected to have a Material Adverse Effect. 3.7 No Default. No Fund or any Borrower is in default under or with respect to any of its Contractual Obligations in any respect that could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing. 24 3.8 Ownership of Property; Liens. Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, has good title to all its property, and none of such property is subject to any Lien except as permitted by Section 6.3. 3.9 No Burdensome Restrictions. There exists no Requirement of Law or Contractual Obligation of any Fund or any Borrower, which could reasonably be expected to have a Material Adverse Effect. 3.10 Taxes. Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, has filed all material tax returns which, to the knowledge of such Fund and such Borrowers, are required to be filed and has paid all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of such Fund or such Borrowers); no material tax Lien has been filed, and, to the knowledge of such Fund and such Borrowers, no claim is being asserted, with respect to any such tax, fee or other charge. 3.11 Federal Regulations. If requested by any Lender or the Administrative Agent from time to time, each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, will furnish to the Administrative Agent and each Lender a statement and current list of the assets of each Borrower in conformity with the requirements of FR Form U-1 referred to in said Regulation U. Other than the furnishing of such statement and such list, no filing or other action is required under the provisions of Regulations T, U or X in connection with the execution and delivery of the Agreement and the making of the Loans hereunder. No part of the proceeds of any Loans made hereunder will be used in a manner that violates Regulation U. 3.12 ERISA. Neither any Fund, any Borrower nor any Commonly Controlled Entity has currently or has had at any time any liability or obligation under ERISA or the Code with respect to any Plan maintained by any of them that could reasonably be expected to have a Material Adverse Effect. 3.13 Certain Regulations. Neither any Fund nor any Borrower is subject to regulation under any Federal or State statute or regulation (other than Regulations U and X of the Board of Governors of the Federal Reserve System and the 1940 Act) which limits its ability to incur Indebtedness, or if so subject is in compliance with such statutes and regulations. 3.14 Subsidiaries. (a) Except as provided in subparagraph (b) of this section, no Fund has any Subsidiaries and no equity investment or interest in any other Person (other than portfolio securities that have been acquired in the ordinary course of business). 25 (b) SMFI represents that it holds all of the issued and outstanding shares of stock of SPMI and such shares are not subject to any Lien, pledge or other encumbrance except as may be permitted by Section 6.3. 3.15 Registration of the Fund. Each Fund is a registered open-end or closed-end management investment company under the 1940 Act. 3.16 Offering in Compliance with Securities Laws. Each Fund that is an open-end investment company, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, has issued all of its securities pursuant to an effective Registration Statement on Form N-1A, and each Fund that is a closed-end investment company has issued all of its securities pursuant to an effective Registration Statement on Form N-2, or, in each case, as may otherwise be required by Federal and State securities laws applicable thereto in all material respects. 3.17 Investment Policies. Each Borrower is in compliance in all material respects with all of its fundamental Investment Policies. 3.18 Permission to Borrow. Each Borrower is permitted to borrow hereunder pursuant to the limits and restrictions set forth in its Prospectus. 3.19 Accuracy of Information; Electronic Information. (a) All factual information heretofore or contemporaneously furnished by or on behalf of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, in writing to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby (in each case, as amended, superseded, supplemented or otherwise modified with the knowledge of the Administrative Agent or such Lender) is, and all other such factual information hereafter furnished by or on behalf of such Fund and such Borrowers to the Administrative Agent or any Lender (in each case, as amended, superseded, supplemented or otherwise modified with the knowledge of the Administrative Agent or such Lender) will be, true and accurate in every material respect on the date as of which such information is dated or certified, and to the extent such information was furnished to the Administrative Agent or such Lender heretofore or contemporaneously, as of the date of execution and delivery of this Agreement by the Administrative Agent or such Lender, and such information is not, or shall not be, as the case may be, incomplete by omitting to state any material fact necessary to make such information not misleading. (b) Neither the Administrative Agent nor any Lender shall be liable to any Fund or Borrower for any damages arising from its respective use of information or other materials obtained through electronic, telecommunications or other information transmission systems, which damages are waived and forgiven. 3.20 Affiliated Persons. To the best knowledge of each Fund, such Fund, and if applicable each portfolio thereof that is a Borrower, is not an "affiliated person" (as defined in the 1940 Act) of the Administrative Agent or any Lender; provided, however, that for purposes of this Section 3.20, (i) the record ownership, without the power to vote, of five percent or more 26 of the outstanding voting securities of any Person shall be deemed not to constitute the direct or indirect ownership of, control of, or holding with the power to vote of, such securities, and (ii) securities of such Fund or such Borrower, as the case may be, held of record by the Administrative Agent or any Lender shall be deemed conclusively, absent written notice to the contrary, to be held without the power to vote such securities. SECTION 4. CONDITIONS PRECEDENT 4.1 Conditions to Initial Loans. The agreement of each Lender to make the initial Loan requested to be made by it is subject to the satisfaction, prior to or concurrently with the making of such Loan, of the following conditions precedent (it being agreed that each Fund need only satisfy the following conditions precedent with respect to itself and if applicable each Borrower that is an investment portfolio thereof): (a) Executed Agreement. The Administrative Agent shall have received this Agreement, executed and delivered by a duly authorized officer of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, with a counterpart for each Lender. (b) Notes. The Administrative Agent shall have received Notes for each Lender which has requested Notes pursuant to Section 2.5(e), executed and delivered by a duly authorized officer of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers. (c) Related Agreements. The Administrative Agent shall have received, with a copy for each Lender, true and correct copies, certified as to authenticity by a Responsible Officer of each Fund, of (i) the most recent Prospectus for each Borrower, (ii) any amendments since the Original Closing Dates to the Custody Agreement of each Fund, with respect to each Borrower if applicable, (iii) any amendments since the Original Closing Dates to the Investment Management Agreement of each Fund, with respect to each Borrower if applicable, (iv) the current Statement of Additional Information for each Borrower and (v) if requested by the Lenders, the current Registration Statement for each Borrower, the most recent annual and semi-annual financial reports for each Borrower and such other documents or instruments as may be reasonably requested by the Administrative Agent, including, without limitation, a copy of any debt instrument, security agreement or other material contract to which any Borrower may be a party. (d) Proceedings of the Fund and the Borrowers. The Administrative Agent shall have received, with a counterpart for each Lender, a copy of the resolutions, in form and substance satisfactory to the Administrative Agent, of the board of trustees or directors, as the case may be, of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, authorizing (i) the execution, delivery and performance of this Agreement and the other Loan Documents to which each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, is a party and (ii) the borrowings contemplated hereunder, certified by a Responsible Officer of such Fund as of the Closing Date, which certificate shall be in 27 form and substance satisfactory to the Administrative Agent and shall state that the resolutions thereby certified have not been amended, modified, revoked or rescinded and are in full force and effect. (e) Incumbency Certificate. The Administrative Agent shall have received, with a counterpart for each Lender, a Certificate of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, dated the Closing Date, as to the incumbency and signature of the officers of such Fund executing any Loan Document executed by a Responsible Officer of the Fund, satisfactory in form and substance to the Administrative Agent. (f) Organizational Documents. The Administrative Agent shall have received copies of any amendments since the Original Closing Dates to each Fund's charter or certificate and Bylaws, certified as of the Closing Date as complete and correct copies thereof by a Responsible Officer of such Fund, including without limitation those organizational documents establishing the investment portfolios thereof which are Borrowers. (g) Legal Opinions. The Administrative Agent shall have received, with a counterpart for each Lender, the executed legal opinion of counsel to each Fund and each Borrower, in the form of Exhibit 4.1(g) hereto. Such legal opinion shall include a New York law enforceability opinion and shall cover such other matters incident to the transactions contemplated by this Agreement as the Administrative Agent or any Lender may reasonably require. (h) Financial Information. The Administrative Agent shall have received, with a copy for each Lender, the most recent publicly available financial information of the kind described in Sections 5.1 and 5.2 of this Agreement (which includes a list of portfolio securities) for each Borrower. (i) Termination of other Credit Facilities. Any other credit facility between the Lenders and any of the Borrowers shall have been terminated, including without limitation the credit facilities that are the subject of (i) that certain Amended and Restated Credit Agreement dated as of November 22, 1999 by and among the Administrative Agent, several of the Borrowers and the Lenders hereto and (ii) that certain Credit Agreement dated as of April 28, 1999 by and among the Administrative Agent, several of the Borrowers and the Lenders hereto. The termination of such credit facilities is addressed further in Section 9.17 hereof. All other credit facilities to which the requesting Borrower is a party shall have been terminated. 4.2 Conditions to Each Loan. The agreement of each Lender to make any Loan requested by a particular Fund, on its own behalf or if applicable on behalf of an investment portfolio thereof that is a Borrower, to be made by it on any date (including, without limitation, its initial Loan) is subject to the satisfaction of the following conditions precedent: 28 (a) Representations and Warranties. Each of the representations and warranties (other than Section 3.2) made by a Fund, on its own behalf and if applicable on behalf of each investment portfolio thereof which is a Borrower, in or pursuant to the Loan Documents shall be true and correct in all material respects on and as of such date as if made on and as of such date. (b) No Default. No Default or Event of Default shall have occurred with respect to the requesting Fund, on its own behalf or if applicable on behalf of the investment portfolio thereof which is a Borrower, and be continuing on such date or after giving effect to the Loans requested to be made on such date. (c) Maximum Borrowing Limitation. After giving effect to the proposed Loans to be made, the Asset Coverage Ratio for all borrowings of such Borrower (x) if not a Designated Borrower shall not be less than 300% and (y) if a Designated Borrower shall not be less than its applicable Designated Borrower Asset Coverage Ratio Percentage; and the requesting Borrower shall not have violated any Requirements of Law (except such violations as could not reasonably be expected to have a Material Adverse Effect) or exceeded the borrowing limits set forth in its Prospectus and/or Registration Statement or the 1940 Act. (d) Regulation U; Form U-1. The Lenders shall be satisfied that the Loans and the use of proceeds thereof comply in all respects with Regulation U. To the extent required by Regulation U, the Administrative Agent shall have received a copy of either (i) FR Form U-1, duly executed and delivered by each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers and completed for delivery to each Lender, in form acceptable to the Administrative Agent, or (ii) a current list of the assets of each Borrower (including all "margin stock" (as defined in Regulation U) from each Borrower), in form acceptable to the Administrative Agent and in compliance with Section 221.3(c)(2) of Regulation U. (e) Net Asset Value. (i) SFASC shall have provided information to the Administrative Agent, or in the case of Swing Line Loans, to the Swing Line Lender, as to the requesting Borrower's net asset value as of a date not more than two Business Days prior to the date of the making of the proposed Loan, and (ii) the net asset value for such requesting Borrower shall be at least $2,000,000. (f) Additional Matters. All corporate and other proceedings, and all documents, instruments and other legal matters in connection with the transactions contemplated by this Agreement and the other Loan Documents shall be satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received such other documents and legal opinions in respect of any aspect or consequence of the transactions contemplated hereby or thereby as it shall reasonably request. Each borrowing by a Borrower hereunder shall constitute a representation and warranty by the Fund of which such Borrower is a portfolio, on its own behalf and on behalf of such Borrower, 29 as of the date thereof that the conditions contained in this Section have been satisfied with respect to such Borrower, and the Fund of which it is an investment portfolio if applicable. SECTION 5. AFFIRMATIVE COVENANTS Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, hereby agrees that, so long as (i) the Commitments remain in effect with respect to it or any Borrower or (ii) any amount is owing by it or any Borrower to any Lender or the Administrative Agent hereunder or under any other Loan Document, it and any Borrower that is a part of the Fund shall (it being agreed that the Fund covenants only to matters with respect to itself and if applicable each Borrower that is an investment portfolio thereof): 5.1 Financial Statements. Furnish to the Administrative Agent (with copies for each Lender): (a) as soon as available and in any event within 75 days after the end of each fiscal year of such Borrower, a statement of assets and liabilities of such Borrower as at the end of such fiscal year, a statement of operations for such fiscal year, a statement of changes in net assets for such fiscal year and the preceding fiscal year, a portfolio of investments as at the end of such fiscal year and the per share and other data for such fiscal year prepared in accordance with GAAP (as consistently applied) and all regulatory requirements, and all presented in a manner acceptable to the Securities and Exchange Commission or any successor or analogous Governmental Authority by PricewaterhouseCoopers, Ernst & Young or any other independent certified public accountants of recognized standing; (b) as soon as available and in any event within 60 days after the close of the first six-month period of each fiscal year of such Borrower, a statement of assets and liabilities as at the end of such six-month period, a statement of operations for such six-month period, a statement of changes in net assets for such six-month period and a portfolio of investments as at the end of such six-month period, all prepared in accordance with regulatory requirements and all certified (subject to normal year end adjustments) as to fairness of presentation, GAAP (as consistently applied) and consistency by a Responsible Officer; and (c) as soon as available, but in any event not later than 10 days after the end of each month of each fiscal year of each Borrower, the net asset value sheet of such Borrower as at the end of such month, in the form and detail similar to those customarily prepared by the Fund's management for internal use and reasonably satisfactory to the Administrative Agent, certified by either a Responsible Officer or the President, Treasurer or Vice President of the SFASC (or any Person (a "Designated Person") designated by a Responsible Officer to give instructions regarding the request for, or repayment of, Swingline Loans, the names and titles of which Persons shall have been provided to the Administrative Agent by a Responsible Officer in advance), as being fairly stated in all material respects; provided, however, that if any Borrower has Revolving Credit Loans 30 outstanding, such Borrower shall provide to the Administrative Agent for each Lender (i) such net asset value sheet described above in this Section and (ii) a certificate of either a Responsible Officer or such an officer of SFASC or Designated Person showing in reasonable detail the calculations supporting such Borrower's compliance with Section 6.1, within two Business Days after the end of each calendar week so long as any Loans to such Borrower remain outstanding; all such financial statements shall be complete and correct in all material respects and shall be prepared in reasonable detail and in accordance with GAAP applied consistently throughout the periods reflected therein and with prior periods (except as approved by such accountants or officer, as the case may be, and disclosed therein). 5.2 Certificates; Other Information. Furnish to the Administrative Agent (with copies for each Lender): (a) concurrently with the delivery of the financial statements referred to in Sections 5.1(a), (b) and (c) and the quarterly report in Section 5.2(c), a certificate of a Responsible Officer stating that (i) to the best of such Officer's knowledge, such Borrower during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Loan Documents to be observed, performed or satisfied by it, and (ii) no Default or Event of Default has occurred and is continuing except as specified in such certificate; (b) within five days after they are sent, copies of all financial statements and reports which each Borrower sends to its investors, and within five Business Days after they are filed, copies of all financial statements and reports which each Borrower may make to, or file with, the Securities and Exchange Commission or any successor or analogous Governmental Authority; (c) as soon as available, but in any event not later than ten days after the end of each quarter, a certificate of either a Responsible Officer or the President, Treasurer or Vice President of SFASC (i) stating that the list of each Borrower's portfolio securities attached to such certificate is true and correct and (ii) showing in reasonable detail the calculations supporting such Borrower's compliance with Section 6.1; and (d) promptly, such additional financial and other information as any Lender may from time to time reasonably request, including, but not limited to, copies of all changes to each Borrower's Prospectus and Registration Statement. 5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before maturity or before they become delinquent (beyond any allowable grace periods therefor), as the case may be, all such Borrower's Contractual Obligations, except where (i) the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Borrower, as the case may be, or (ii) the failure to timely make payment thereof could not reasonably be expected to have a Material Adverse Effect. 31 5.4 Conduct of Business and Maintenance of Existence. Except as otherwise permitted herein, continue to engage in (i) such Borrower's investment business in accordance with its Investment Policies, Prospectus and Registration Statement and preserve, renew and keep in full force and effect its existence and (ii) take all reasonable action to maintain all rights, privileges and franchises necessary or desirable in the normal conduct of its business except to the extent that failure to take such actions could not, in the aggregate, be reasonably expected to have a Material Adverse Effect; comply with all Contractual Obligations and Requirements of Law except to the extent that failure to comply therewith could not, in the aggregate, be reasonably expected to have a Material Adverse Effect; maintain at all times its status as an investment company or a series or portfolio of an investment company registered under the 1940 Act; maintain at all times its current custodians, or replacement custodians which are a bank or trust company organized under the laws of the United States or a political subdivision thereof having assets of at least $10,000,000,000 and a long-term debt or deposit rating of at least A from S&P or A2 from Moody's. 5.5 Maintenance of Property; Insurance. Keep all property useful and necessary in such Borrower's business, if any, in good working order and condition; maintain with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks as are usually insured against in the same general area by entities engaged in the same or similar business or as may otherwise be required by the Securities and Exchange Commission or any successor or analogous Governmental Authority (including, without limitation, (a) fidelity bond coverage as shall be required by Rule 17g-1 promulgated under the 1940 Act or any successor provision and (b) errors and omissions insurance); and furnish to each Lender, upon written request, full information as to the insurance carried. 5.6 Inspection of Property; Books and Records; Discussions. Keep proper books of records and account in which full, true and correct entries in conformity with GAAP and all material Requirements of Law shall be made of all dealings and transactions in relation to its business and activities; and permit representatives of (i) the Administrative Agent, upon its own discretion or at the reasonable request of any Lender, and (ii) upon the occurrence and during the continuance of an Event of Default, any Lender, to visit and inspect any of such Borrower's properties and examine and make abstracts from any of its books and records during normal business hours and to discuss the business, operations, properties and financial and other condition of such Borrower with officers and employees of such Borrower and with its independent certified public accountants; provided that, unless a Default or an Event of Default shall have occurred and be continuing, the Administrative Agent shall provide the Borrowers with five Business Days' prior notice of such visit and shall conduct such visit not more than once a year. 5.7 Notices. Promptly give notice to the Administrative Agent and each Lender of: (a) the occurrence of any Default or Event of Default with respect to such Borrower; 32 (b) any (i) default or event of default under any Contractual Obligation of such Borrower or (ii) litigation, investigation or proceeding which may exist at any time between such Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers and any Governmental Authority, which in either case, if not cured or if adversely determined, as the case may be, could reasonably be expected to have a Material Adverse Effect; (c) any litigation or proceeding affecting such Borrower, or the Fund of which it is an investment portfolio if applicable, in which the amount reasonably determined to be at risk is more than 5% of such Borrower's net assets and not covered by insurance or in which injunctive or similar relief is sought; (d) any change in such Borrower's Prospectus or Registration Statement involving Investment Policies which could materially increase the risks to the shareholders of the Borrower or which would increase the borrowing limits provided for in such Borrower's Prospectus; (e) any development or event which could reasonably be expected to have a Material Adverse Effect on any such Borrower; and (f) any change in the Borrower's custodian. Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and if appropriate stating what action such Fund or such Borrower proposes to take with respect thereto. 5.8 Purpose of Loans. Use the proceeds of the Loans for temporary or emergency purposes, including, without limitation, funding of shareholder redemptions or the payment of dividends (i) which are required by law or in connection with the maintenance of the Borrower's tax status or (ii) for the purpose of avoiding imposition of federal excise tax. Without limiting the foregoing, no Borrower will, directly or indirectly, use any part of such proceeds for any purpose which would violate any provision of its Registration Statement or any applicable statute, regulation, order or restriction, including but not limited to Regulation U; provided, however, that neither the Administrative Agent nor any Bank shall have any responsibility as to the use of any of such proceeds. 5.9. Payment of Taxes. File all material tax returns which, to the knowledge of such Fund and such Borrowers, are required to be filed and pay all taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other taxes, levies, fees or other charges imposed on it or any of its property by any Governmental Authority; provided, however, that no such tax, assessment, charge or levy need be paid and discharged so long as the validity thereof shall be contested in good faith by appropriate proceedings and there shall have been set aside on the books of such Person adequate reserves in accordance with GAAP applied with respect thereto. SECTION 6. NEGATIVE COVENANTS 33 Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, hereby agrees that, so long as (i) the Commitments remain in effect with respect to it or any such Borrower or (ii) any amount is owing by it or any such Borrower to any Lender or the Administrative Agent hereunder or under any other Loan Document, it and any such Borrower shall not, without the prior written consent of the Lenders, directly or indirectly (it being agreed that each Fund agrees only to matters with respect to itself and if applicable each Borrower that is an investment portfolio thereof): 6.1 Financial Condition Covenant. Permit the Asset Coverage Ratio of such Borrower to be less than (x) for all Borrowers other than Designated Borrowers, 300%, or (y) for each Designated Borrower, the Designated Borrower Asset Coverage Ratio Percentage for such Borrower; or in either case allow borrowings and/or Indebtedness of such Borrower to exceed the limits set forth in such Borrower's Prospectus or allow borrowings and/or Indebtedness to exceed the requirements of the 1940 Act. 6.2 Limitation on Indebtedness; Derivatives. (a) Create, incur, assume or suffer to exist any Indebtedness of such Borrower or any Subsidiary, except Indebtedness of such Borrower or Subsidiary incurred (i) under this Agreement and the Notes, (ii) in the ordinary course of business of such Borrower or such Subsidiary, (iii) pursuant to an Interfund Lending arrangement or (iv) in the form of Reverse Repurchase Transactions, dollar rolls or other transactions entered into primarily for investment purposes which have the effect of borrowing and, in each case, which is not otherwise prohibited by law, is in the ordinary course of business, is not in contravention of such Borrower's Prospectus, or in SPMI's certificate of incorporation or by-laws, with respect to SPMI, and is reflected properly in the calculation of the Asset Coverage Ratio. (b) Invest in, or incur Indebtedness or other liability to any Person with respect to, any Swap Obligation or derivative instrument (including without limitation any swap, collar, cap, puts, calls, equity derivative or mortgage-backed or debt-backed derivative) unless each of the following is true: (i) such Swap Obligation or derivative instrument, if marked-to-market on a net daily basis (or marked to value in a manner reasonably acceptable to the Administrative Agent), is appropriately reflected in the calculation of Asset Coverage Ratio, and (ii) the purpose of the investment in such Swap Obligation or derivative instrument is to augment the capital appreciation or current income of or by such Borrower, or to hedge or manage the risk of various current or future exposures of the Borrower. 6.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien upon any of the property, assets or revenues, whether now owned or hereafter acquired of such Borrower or such Subsidiary, except for (i) Liens for taxes not yet due or which are being contested in good faith by appropriate proceedings, provided that adequate reserves with respect thereto are maintained on the books of such Borrower or such Subsidiary in conformity with GAAP, (ii) Liens arising in connection with claims for advances made by or payments due to any custodian under the Custody Agreements set forth in Schedule IV hereto, (iii) Liens created, incurred, assumed or suffered to exist in compliance with the Registration Statement or organizational documents of such Borrower or such Subsidiary, (iv) Liens arising under an Interfund Lending 34 arrangement and (v) any other Liens created, incurred, assumed or suffered to exist in the ordinary course of such Borrower's or Subsidiary's business, and which, in each case, are not otherwise prohibited by any Requirement of Law. 6.4 Limitation on Guarantee Obligations. Create, incur, assume or suffer to exist any material Guarantee Obligation of such Borrower, except as may occur in the ordinary course of such Borrower's business and which is not otherwise prohibited by any Requirement of Law. 6.5 Limitation on Fundamental Changes. Enter into, or permit any of its Subsidiaries to enter into, any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself or such Borrower (or suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of substantially all of the property, business or assets of itself, such Borrower, or such Subsidiary in a single transaction or in related transactions, or make any material change in its present method of conducting business; except that, so long as no Default or Event of Default shall have occurred and be continuing, a Borrower will be permitted to (i) enter into any merger, consolidation or amalgamation with one or more Borrowers or, with the consent of the Lenders, one or more other Persons if, in each case, Deutsche IMA or one of its affiliates is the investment advisor to the entity surviving such merger, consolidation or amalgamation and such entity assumes the obligations of such Borrower under the Loan Documents and complies with Applicable law and with the provisions hereof or (ii) terminate all Commitments with respect to such Borrower and liquidate, wind up or convey, sell, lease, assign, transfer or otherwise dispose of all or substantially all of the property, business or assets of such Borrower if it repays all Loans made to it prior to liquidation, together with all other amounts due and owing hereunder. Any Borrower undertaking any action described in clause (ii) above shall comply with the termination provisions described in Section 2.4 hereof. 6.6 Limitation on Distributions. At any time, make any distribution to the shareholders of such Borrower, whether now or hereafter existing, either directly or indirectly, whether in cash or property or in obligations of the Borrower if such distribution results in a Default or Event of Default. During the occurrence and continuation of an Event of Default specified in paragraphs (a) or (e) of Section 7 or an Event of Default arising in connection with a Borrower's having failed to comply with Section 6.1, make any distribution to the shareholders of such Borrower, whether now or hereafter existing, either directly or indirectly, whether in cash or property or in obligations of the Borrower. Notwithstanding the foregoing, nothing herein shall prevent a Borrower from making (i) distributions that are required to enable such Borrower to qualify as a "regulated investment company" under Sections 851-855 of the Code or otherwise to minimize or eliminate federal or state income or excise taxes payable by such Borrower, or (ii) distributions that are required by any other Requirement of Law. 6.7 Limitation on Investments, Loans and Advances. Make any advance, loan, extension of credit or capital contribution to, or purchase any stock, bonds, notes, debentures or other securities of or any assets constituting a business unit of or make any other investment in, any Person, except those consistent with such Borrower's Investment Policies. 6.8 Limitation on Transactions with Affiliates. Enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any 35 service, with any Affiliate unless such transaction is (a) not otherwise prohibited under this Agreement and not in violation of the 1940 Act, (b) in the ordinary course of such Borrower's business, and (c) upon fair and reasonable terms no less favorable to such Borrower than it would obtain in a comparable arm's length transaction with a Person which is not an Affiliate. 6.9 Limitation on Negative Pledge Clauses. Enter into with any Person any agreement, other than this Agreement or the other Loan Documents, which prohibits or limits the ability of such Borrower to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, except such agreements entered into in the ordinary course of such Borrower's business and which are not otherwise prohibited by any Requirement of Law. 6.10 Limitation on Changes to Investment Policies. Except as may be required by law, make any amendment to the Prospectus or Registration Statement of such Borrower (i) relating to changes in the fundamental Investment Policies of such Borrower, or (ii) increasing the borrowing limits specified therein, in each case without the consent of the Required Lenders, which consent shall not be unreasonably withheld. 6.11 Permitted Activities. With respect to SMFI, SMFI shall not (a) permit SPMI to engage in any business or activity other than the buying or selling of gold and other precious metals and entering into lending or derivatives transactions relating thereto in the ordinary course of business and (b) itself engage in any business or activity other than (i) acting as a holding company for SPMI and (ii) acting as a registered open-end management investment company under the 1940 Act. 6.12 Sale of Assets, Consolidation, Merger, Etc. With respect to SPMI, SMFI shall not permit SPMI to consolidate with, or merge into, any Person other than SMFI or Scudder Gold Fund (a Borrower hereunder), or sell, lease, transfer or otherwise dispose of its assets, except for sales in the ordinary course of business. SECTION 7. EVENTS OF DEFAULT Subject to the final paragraph of this Section 7, if any of the following events shall occur and be continuing with respect to any Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, as the case may be (each an "Event of Default"): (a) A Borrower shall fail to pay any principal of any Loan when due in accordance with the terms thereof or hereof, including without limitation any failure to make a mandatory prepayment due pursuant to the provisions of Section 2.6(b); or a Borrower shall fail to pay any interest on any Loan, or any other amount payable hereunder, within five days after any such interest or other amount becomes due in accordance with the terms thereof or hereof; or 36 (b) Any representation or warranty made or deemed made by any Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, or made or deemed made at such Fund's or Borrower's request, herein or in any other Loan Document or which is contained in any certificate, document or financial or other statement furnished by it at any time under or in connection with this Agreement or any such other Loan Document shall prove to have been incorrect in any material respect on or as of the date made or deemed made; or (c) A Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, shall default in the observance or performance of any other agreement contained in this Agreement or any other Loan Document (other than as provided in paragraphs (a) and (b) of this Section), and such default shall continue unremedied for a period of 30 days; or solely in the case of such default arising under Sections 5.4, 5.7 or 6.5 hereof, 5 Business Days; or solely in the case of such default arising under Section 5.2(b), 10 days from the delivery of notice thereof by the Administrative Agent to such Fund (unless the Administrative Agent shall have reasonably determined that the non-delivery of information giving rise to such default under Section 5.2(b) shall have materially impaired the rights of the Lenders hereunder, in which case such default shall ripen into an Event of Default if unremedied after 30 days); or (d) A Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, shall (i) default in any payment of principal of or interest on any Indebtedness (other than the Loans), Interest Rate Agreement, Swap Obligation or in the payment of any Guarantee Obligation, beyond the grace period (not to exceed 30 days), if any, provided in the instrument or agreement under which such Indebtedness, Interest Rate Agreement, Swap Obligation or Guarantee Obligation was created, if the aggregate amount of the Indebtedness, Interest Rate Agreement, Swap Obligations and/or Guarantee Obligations in respect of which such default or defaults shall have occurred is at least 5% of such Fund's or such Borrower's net assets; or (ii) default in the observance or performance of any other agreement or condition relating to any such Indebtedness, Interest Rate Agreement, Swap Obligation or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Guarantee Obligation, Interest Rate Agreement, or Swap Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness, Interest Rate Agreement or Swap Obligation to become due prior to its stated maturity or such Guarantee Obligation to become payable if the aggregate amount of the Indebtedness, Interest Rate Agreement, Swap Obligations and/or Guarantee Obligations subject to becoming so due or so payable is at least 5% of such Borrower's or Fund's net assets; or (e) (i) A Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, shall commence any case, proceeding or other action with respect to itself or any such Borrower (A) under any then applicable law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or 37 relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or a Fund, on its own behalf or if applicable on behalf of any investment portfolio thereof which is a Borrower, shall make a general assignment for the benefit of its creditors; or (ii) there shall be commenced against such a Fund or Borrower, any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment and (B) remains undismissed, undischarged, unstayed, unvacated or unbonded pending appeal within 60 days from the entry thereof; or (iii) there shall be commenced against a Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or (iv) such a Fund or Borrower shall take any action in material furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or (v) a Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, shall not, or shall be unable to, pay its debts as they become due for ten (10) days after written notice thereof to such Fund or actual knowledge thereof by such Fund, or shall admit in writing its inability to pay its debts as they become due; or (f) Either a Borrower or any Commonly Controlled Entity of such Borrower incurs any liability to any Plan maintained by any of them which could reasonably be expected to have a Material Adverse Effect; or (g) One or more judgments or decrees shall be entered against a Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, involving in the aggregate a liability (not fully covered by insurance or otherwise paid or discharged) of 5% or more of such Fund's or such Borrower's net assets, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within 30 days from the entry thereof; or (h) Unless consented to by the Lenders, Deutsche IMA or a Person directly controlling, controlled by, or under common control with Deutsche IMA shall no longer act as investment advisor for a Borrower; or (i) A Fund's or a Borrower's registration under the 1940 Act shall lapse or be suspended (or proceedings for such purpose shall have been instituted); or (j) A Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, shall fail to materially comply with its Investment Policies in a manner which the Required Lenders, in their sole reasonable discretion, determine could reasonably be expected to have a Material Adverse Effect and such 38 default (or the Material Adverse Effect arising therefrom if any) shall continue unremedied for a period of 3 days; then, and in any such event, (A) if such event is an Event of Default specified in paragraph (e) of this Section with respect to such Borrower (or the Fund acting on behalf of one or more Borrowers), automatically the Commitments available to such Borrower (or all of the Borrowers which are investment portfolios of such Fund) shall immediately terminate and the Loans hereunder made to any such Borrower (with accrued interest thereon) and all other amounts owing under this Agreement by such Borrower shall immediately become due and payable, and (B) if such event is any other Event of Default with respect to such Borrower, any or all of the following actions may be taken: (i) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to such Borrower declare the Commitments available to such Borrower (or all of the Borrowers which are investment portfolios of such Fund if such Event of Default is the Fund Event of Default (as defined below)) to be terminated forthwith, whereupon such Commitments shall immediately terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to such Borrower, declare the Loans to such Borrower (with accrued interest thereon) and all other amounts owing under this Agreement by such Borrower (or all of the Borrowers which are investment portfolios of such Fund if such Event of Default is a Fund Event of Default) to be due and payable forthwith, whereupon the same shall immediately become due and payable. Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived. Notwithstanding any other provision herein to the contrary, Defaults and Events of Default shall have the following results: (i) a Default or Event of Default with respect to one Borrower shall not constitute a Default or Event of Default with respect to any other Borrower; (ii) except as set forth in clause (iii) below, a Default or Event of Default with respect to a Fund acting on behalf of one or more Borrowers that is an investment portfolio of such Fund shall constitute a Default or Event of Default, as the case may be, only with respect to the Borrower(s) implicated in, or affected by, the act or omission causing such Default or Event of Default; (iii) a Fund Default or a Fund Event of Default (each as defined below) with respect to a Fund acting on behalf of one or more Borrowers that is an investment portfolio thereof shall constitute a Default or Event of Default, as the case may be, with respect to all such Borrowers to the extent that such Fund Default or Event of Default is, in the reasonable discretion of the Administrative Agent or the Required Lenders, expected to have a Material Adverse Effect on each such Borrower's ability to perform its obligations under this Agreement and the other Loan Documents; and 39 (iv) an Event of Default of the type described in paragraph (h) of this Section 7 shall constitute an Event of Default with respect to all Borrowers for which Deutsche IMA no longer acts as investment manager. "Fund Event of Default" shall mean an Event of Default with respect to a Fund (A) of any of the types described in paragraphs (e) or (i) of this Section 7, or (B) arising from such Fund's failure to comply with the covenants set forth in Sections 5.3, 5.4, 5.5 or 6.5. "Fund Default" shall mean any of the events giving rise to Fund Events of Default, whether or not any requirement for the giving of notice, the lapse of time, or both, or any other condition, has been satisfied. SECTION 8. THE ADMINISTRATIVE AGENT 8.1 Appointment. Each Lender hereby irrevocably designates and appoints the Administrative Agent as the agent of such Lender under this Agreement and the other Loan Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity, to take such action on such Lender's behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Loan Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Administrative Agent. 8.2 Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement and the other Loan Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence, willful misfeasance, bad faith or misconduct of any agents or attorneys in-fact selected by it with reasonable care. 8.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this Agreement or any other Loan Document (except for its or such Person's own gross negligence or willful misconduct) or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Fund or any Borrower or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Borrower or any Fund to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Fund or any Borrower. 40 8.4 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any Note, writing, resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to a Fund or a Borrowers), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Loan Documents in accordance with a request of the Required Lenders or all of the Lenders, as applicable, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders and all future holders of the Loans. 8.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or a Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default". In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give notice thereof to the Lenders and each Borrower. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders or all of the Lenders, as applicable; provided that unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of a Fund or Borrower, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, 41 appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigation as it deems necessary to inform itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any Fund or any Borrower which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates. 8.7 Indemnification. The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so), ratably according to their respective Commitment Percentages in effect on the date on which indemnification is sought (or, if indemnification is sought after the date upon which the Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with their Commitment Percentages immediately prior to such date), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative Agent in any way relating to or arising out of the Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting solely from the Administrative Agent's gross negligence or willful misconduct. The agreements in this Section shall survive the payment of the Loans and all other amounts payable hereunder. 8.8 Administrative Agent in Its Individual Capacity. The Administrative Agent and its Affiliates may make loans to, accept deposits from and generally engage in any kind of business with any Fund or any Borrower as though the Administrative Agent were not the Administrative Agent hereunder and under the other Loan Documents. With respect to the Loans made by it, the Administrative Agent shall have the same rights and powers under this Agreement and the other Loan Documents as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity. 8.9 Successor Administrative Agent. The Administrative Agent may resign as Administrative Agent upon 10 Business Days' notice to the Lenders and the Borrowers. If the Administrative Agent shall resign as Administrative Agent under this Agreement and the other Loan Documents, then the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders whereupon such successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term "Administrative Agent" shall mean such successor agent effective upon such appointment and approval, and the former Administrative Agent's rights, powers and duties as Administrative Agent shall be terminated, without any other 42 or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any holders of the Loans. After any retiring Administrative Agent's resignation as Administrative Agent, the provisions of this Section 8 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement and the other Loan Documents. SECTION 9. MISCELLANEOUS 9.1 Amendments and Waivers. Neither this Agreement nor any other Loan Document, nor any terms hereof or thereof, may be amended, supplemented or modified except in accordance with the provisions of this Section. The Required Lenders may, or, with the written consent of the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of the Lenders or of such Borrowers hereunder or thereunder or (b) waive, on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any Default or Event of Default and its consequences; provided, however, that no such waiver and no such amendment, supplement or modification shall (i) reduce the amount or extend the scheduled date of maturity of any Loan or of any installment thereof, or reduce the stated rate of any interest or fee payable hereunder or extend the scheduled date of any payment thereof or increase the amount or extend the expiration date of any Lender's Commitment, in each case without the consent of each Lender affected thereby, or (ii) amend, modify or waive any provision of this subsection (or any other provision of this Agreement which expressly provides that the consent of all the Lenders is required to take any action) or reduce the percentage specified in the definition of Required Lenders, or consent to the assignment or transfer by any Borrower of any of its rights and obligations under this Agreement and the other Loan Documents, in each case without the written consent of all the Lenders, or (iii) amend, waive or modify the first two sentences of Section 2.9(a), in each case without the written consent of all the Lenders, or (iv) amend, waive or modify the requirement contained in the first sentence of Section 2.16(a) that consent of all the Lenders is required to approve the addition of Borrowers to this Agreement, in each case without the written consent of all the Lenders, or (v) amend, waive or modify Section 2.6(b) without the written consent of all the Lenders, or (vi) amend, waive or modify Section 6.1 without the written consent of all the Lenders, or (vii) amend, modify or waive any provision of Section 8 without the written consent of the then Administrative Agent. Any such waiver and any such amendment, supplement or modification shall be effective (A) only for such Borrower(s) on whose behalf a Fund executed such document(s) and (B) in the specific instance and for the specific purpose for which given. 9.2 Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (which writing may be in the form of a facsimile transmission), and, unless otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered, or five days after being deposited in the mail, postage prepaid, or, 43 in the case of facsimile notice, when received, addressed as follows in the case of any Fund, any Borrower and the Administrative Agent, and as set forth in Schedule II in the case of the other parties hereto, or to such other address as may be hereafter notified by the respective parties hereto: The Funds and the Borrowers: With respect to each Fund that is a Massachusetts business trust (and each Borrower which is an investment portfolio thereof): Deutsche Investment Management Americas Inc. Two International Place Boston, Massachusetts 02110 Attention: Kevin G. Poole Facsimile: (617) 443-7057 With respect to each other Fund (and each Borrower which is an investment portfolio thereof): Deutsche Investment Management Americas Inc. 345 Park Avenue New York, New York 10154 Attention: Kevin G. Poole Facsimile: (212) 223-3127 The Administrative Agent: JPMORGAN CHASE BANK Loan and Agency Services Group One Chase Manhattan Plaza Eighth Floor New York, New York 10081 Attention: Ms. Laura Rebecca Facsimile: (212) 552-7490 and JPMORGAN CHASE BANK 270 Park Avenue Twentieth Floor New York, New York 10017 Attention: Ms. Roberta Whittington Facsimile: (212) 270-0670 44 provided that any notice, request or demand to or upon the Administrative Agent or the Lenders pursuant to Section 2.2, 2.4, 2.6, or 2.8 shall not be effective until received. 9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any party hereto, any right, remedy, power or privilege hereunder or under the other Loan Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law. 9.4 Survival of Representations and Warranties. All representations and warranties made hereunder, in the other Loan Documents and in any document, certificate or statement delivered pursuant hereto or in connection herewith shall survive the execution and delivery of this Agreement and the making of the Loans hereunder. 9.5 Payment of Expenses and Taxes; Indemnification. (a) Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, agrees severally (subject to Section 9.5(b) below) (i) to reimburse the Administrative Agent for its reasonable out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment, supplement or modification to, this Agreement and the other Loan Documents and any other documents prepared in connection herewith or therewith, and the consummation and administration of the transactions contemplated hereby and thereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent, (ii) to reimburse each Lender and the Administrative Agent for all its costs and expenses incurred in connection with the enforcement or preservation of any rights under this Agreement with respect to such Borrower, the other Loan Documents and any such other documents, including, without limitation, the reasonable fees and disbursements of counsel to each Lender and of counsel to the Administrative Agent, (iii) to indemnify and hold each Lender and the Administrative Agent harmless from any and all recording and filing fees and any and all liabilities with respect to, or resulting from any delay in paying, stamp, excise and other taxes, if any, which may be payable or determined to be payable in connection with the execution and delivery of, or consummation or administration of any of the transactions contemplated by, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, the other Loan Documents and any such other documents with respect to such Borrower, and (iv) to indemnify and hold each Lender and the Administrative Agent (and their respective affiliates, directors, officers, agents and employees (collectively with the Administrative Agent and the Lenders, the "Indemnified Parties")) harmless from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, reasonable costs, reasonable out-of-pocket expenses or disbursements of any kind or nature whatsoever arising from or in connection with the execution, delivery, enforcement, performance and administration of this Agreement, the actual or proposed use of proceeds, the other Loan Documents and any such other documents, the failure of such Borrower to comply with rules, regulations and laws regarding the business of mutual funds, such Borrower's false or incorrect representations or warranties or other information provided in connection with this Credit Agreement, or failure of such Borrower to comply with covenants 45 contained herein or in any Note in a timely manner (all the foregoing in this clause (iv), collectively, the "indemnified liabilities"), provided, that such Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers shall have no obligation hereunder to any Indemnified Party with respect to indemnified liabilities to the extent arising from (A) with respect to any Indemnified Party, the gross negligence or willful misconduct of such Indemnified Party, or such Indemnified Party's failure to comply with any material law or regulation governing the transactions contemplated hereby, or (B) disputes arising between or among the Indemnitees with respect to the Credit Agreement. The agreements in this Section shall survive repayment of the Loans and all other amounts payable hereunder. (b) Notwithstanding any other provision in this Agreement to the contrary, to the extent any obligation to reimburse or indemnify any Indemnified Party that arises pursuant to Section 9.5(a) is not attributable to any particular Borrower, then such reimbursement or indemnification shall be made by each Borrower (ratably, in accordance with its Pro Rata Allocation). To the extent any such obligation to reimburse or indemnify any Indemnified Party is attributable to one or more Borrowers, then such reimbursement or indemnification shall be made by each such Borrower to the extent of its liability therefor. 9.6 Successors and Assigns; Participations and Assignments. (a) This Agreement shall be binding upon and inure to the benefit of the Funds, the Borrowers, the Lenders, the Administrative Agent and their respective successors and assigns, except that, except as may otherwise be provided herein, neither any Fund nor any Borrower may assign or transfer any of its rights or obligations under this Agreement without the prior written consent of each Lender. (b) Any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable laws, at any time sell to one or more Eligible Lenders ("Participants") participating interests in any Loan owing to such Lender, any Commitment of such Lender or any other interest of such Lender hereunder and under the other Loan Documents. In the event of any such sale by a Lender of a participating interest to a Participant, such Lender's obligations under this Agreement to the other parties to this Agreement shall remain unchanged, such Lender shall remain solely responsible for the performance thereof, such Lender shall remain the holder of any such Loan for all purposes under this Agreement and the other Loan Documents, and the Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and the other Loan Documents. Any agreement pursuant to which any Lender may grant such a participating interest shall provide that such Lender shall retain the sole right and responsibility to enforce the obligations of the Borrowers hereunder, including the right to approve any amendment, modification or waiver of any provision of this Agreement; provided that such participation agreement may provide that (i) such Lender will not agree to any modification, amendment or waiver of this Agreement described in clause (i) of the proviso in Section 9.1 without the consent of the Participant and (ii) the Participant may obtain voting rights limited to changes in respect of the principal amount, interest rates, fees and term of the Loans. Each Borrower agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall, to the maximum extent permitted by applicable laws, be 46 deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement, provided that, in purchasing such participating interest, such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 9.7(a) as fully as if it were a Lender hereunder. Each Borrower also agrees that each Participant shall be entitled to the benefits of Sections 2.10 and 2.11 with respect to its participation in the Commitments and the Loans outstanding from time to time as if it was a Lender; provided that, in the case of Section 2.11, such Participant shall have complied with the requirements of said Section and provided, further, that no Participant shall be entitled to receive any greater amount pursuant to any such Section than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such Participant had no such transfer occurred. (c) With the consent of the Borrowers (unless a Default or Event of Default shall have occurred and be continuing or the Assignee (defined below) is an Affiliate of the assigning Lender, in which case such consent shall not be required) and the Administrative Agent (in each case, such consent not to be unreasonably withheld or delayed), any Lender may, in the ordinary course of its commercial banking business and in accordance with applicable law, at any time and from time to time assign to any Lender or any affiliate thereof that is an Eligible Lender or to an additional Eligible Lender (an "Assignee") all or any part of its rights and obligations under this Agreement and the other Loan Documents pursuant to an Assignment and Acceptance, substantially in the form of Exhibit 9.6(c), executed by such Assignee, such assigning Lender and the Administrative Agent (and, provided (i) no Default or Event of Default shall have occurred and be continuing and (ii) the Assignee is not an Affiliate of the assigning Lender, Deutsche IMA or any of the Borrowers) and delivered to the Administrative Agent for its acceptance and recording in the Register; provided, however, that assignments to entities other than Lenders or Affiliates thereof must be in amounts of at least $5,000,000. Upon such execution, delivery, acceptance and recording, from and after the effective date determined pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the extent provided in such Assignment and Acceptance, have the rights and obligations of a Lender hereunder with a Commitment as set forth therein, and (y) the assigning Lender thereunder shall, to the extent provided in such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such assigning Lender shall cease to be a party hereto and the Commitment of the Assignee shall be in an amount equal to that of such assigning Lender prior to the execution of such Assignment and Acceptance). (d) The Administrative Agent, on behalf of the Borrowers, shall maintain at the address of the Administrative Agent referred to in Section 9.2 a copy of each Assignment and Acceptance delivered to it and a register (the "Register") for the recordation of the names and addresses of the Lenders and the Commitment of, and principal amount of the Loans owing to, each Lender from time to time. The entries in the Register shall be conclusive, in the absence of manifest error, and each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, the Administrative Agent and the Lenders may (and, in the case of any Loan or other obligation hereunder not evidenced by a Note, shall) treat each 47 Person whose name is recorded in the Register as the owner of a Loan or other obligation hereunder as the owner thereof for all purposes of this Agreement and the other Loan Documents, notwithstanding any notice to the contrary. Any assignment of any Loan or other obligation hereunder not evidenced by a Note shall be effective only upon appropriate entries with respect thereto being made in the Register. The Register shall be available for inspection by the Borrowers or any Lender at any reasonable time and from time to time upon reasonable prior notice. (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an Assignee (and the Administrative Agent) together with payment by the assigning Lender or Assignee to the Administrative Agent of a registration and processing fee of $3,000 (for which no Borrower shall have an obligation to reimburse), the Administrative Agent shall (i) promptly accept such Assignment and Acceptance and (ii) on the effective date determined pursuant thereto record the information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and to each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers. (f) Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, authorizes each Lender to disclose to any Participant or Assignee (each, a "Transferee") and any prospective Transferee any and all financial information in such Lender's possession concerning such Fund or such Borrower and their Affiliates which has been delivered to such Lender by or on behalf of such Fund or such Borrowers pursuant to this Agreement or which has been delivered to such Lender by or on behalf of such Fund or such Borrowers in connection with such Lender's credit evaluation of such Funds, Borrowers and their Affiliates prior to becoming a party to this Agreement. (g) For avoidance of doubt, the parties to this Agreement acknowledge that the provisions of this Section concerning assignments of Loans and Notes relate only to absolute assignments and that such provisions do not prohibit assignments creating security interests, including, without limitation, any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank in accordance with applicable law. 9.7 Adjustments; Set-off. (a) If any Lender (a "Benefited Lender") shall at any time receive any payment of all or part of its Loans, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 7(e), or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of such other Lender's Loans, or interest thereon, such Benefited Lender shall purchase for cash from the other Lenders a participating interest in such portion of each such other Lender's Loan, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefited Lender to share the excess payment or benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefited Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. 48 (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, with prompt notice subsequent to the exercise of such rights but without prior notice to such Borrower, any such notice being expressly waived by each Fund, on its own behalf or if applicable, on behalf of the investment portfolios thereof which are Borrowers, to the extent permitted by applicable law, upon any amount becoming due and payable by a Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender or any branch or agency thereof to or for the credit or the account of such Borrower. Each Lender agrees promptly to notify such Borrower and the Administrative Agent after any such set-off and application made by such Lender, provided that the failure to give such notice shall not affect the validity of such set-off and application. 9.8 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Agreement signed by all the parties shall be lodged with Deutsche IMA and the Administrative Agent. 9.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 9.10 Waiver of Conflicts; Confidentiality. (a) Each Fund, on its own behalf or on behalf of the investment portfolios thereof which are Borrowers, acknowledges that each of the Administrative Agent and each Lender and their respective affiliates (collectively, the "Bank Parties") may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which such Funds and Borrowers may have conflicting interests regarding the transactions described herein and otherwise. Except as may otherwise be permitted herein, the Bank Parties will not disclose Confidential Information obtained from such Funds and/or Borrowers by virtue of the transactions contemplated by this Agreement or their other relationships with such Funds and/or Borrowers in connection with the performance by each of the Bank Parties of services for other companies, and each of the Bank Parties will not disclose any such Confidential Information to other companies. Such Funds and Borrowers also acknowledge that no Bank Party has any obligation to use in connection with the transactions contemplated by this Agreement, or to furnish to any Fund or Borrower, confidential information obtained from other companies. (b)(i) For purposes of this Section, "Confidential Information" shall mean all information received from any of the Funds, the Borrowers or Deutsche IMA relating to any of them or their business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis other than as a result of a breach of this 49 Agreement. Each of the Administrative Agent and each Lender agrees to maintain the confidentiality of, and not to use the Confidential Information, except that Confidential Information may be disclosed (i) to its and its Affiliates' directors, officers, employees and agents, including without limitation accountants, legal counsel and other advisors for purposes relating to the transactions contemplated by this Agreement or for conducting legitimate audits (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Confidential Information and will have agreed to keep such Confidential Information confidential), (ii) to the extent requested by any legal or regulatory authority having or claiming jurisdiction over such Person, (iii) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (iv) to any other party to this Agreement for purposes relating to the transactions contemplated hereby, (v) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (vi) subject to an agreement containing provisions substantially the same as those of this subsection, to any Assignee or Participant or any prospective Assignee or Participant which executes such agreement, or (vii) with the consent of the Borrowers. Any Person required to maintain the confidentiality of Confidential Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. (ii) Without limiting the foregoing provisions of this Section, in the event that (I) any party to this Agreement (the "Providing Party") provides to another party to this Agreement (the "Recipient Party") non-public personal information concerning individual investors in any Fund or any Borrower that such Providing Party is required to keep confidential under applicable provisions of the Customer Confidentiality Laws and (II) such Providing Party properly identifies such information as such to the Recipient Party at the time such information is provided by, among other means of identification, prominently marking such information with the words "NON-PUBLIC INFORMATION SUBJECT TO CUSTOMER CONFIDENTIALITY LAWS AND SECTION 9.10(b)(ii) OF THE CREDIT AGREEMENT", the Recipient Party shall treat such information as required by the applicable provisions of the Customer Confidentiality Laws, it being understood that this sentence does not, and is not intended to, create independent rights, or rights of action or obligations for any Person not a party to this Agreement and any such action shall constitute an "indemnified liability" under Section 9.5 hereof. "Customer Confidentiality Laws" means Title V of Public Law 106-102, known as the "Graham-Leach-Bliley Act", 15 USC 6801 to 6809, and the rules and regulations adopted thereunder. 9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD FOR ITS CHOICE OF LAW RULES. 9.12 Submission To Jurisdiction; Waivers. Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, the Administrative Agent and the Lenders hereby irrevocably and unconditionally: 50 (a) submit for themselves and their respective property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which they are a party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of New York, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof; (b) consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same; (c) agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Fund or such Borrower at its address set forth in Section 9.2 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; (d) agrees that nothing herein shall affect the right of any party hereto to effect service of process in any other manner permitted by law or shall limit the right of any party hereto to sue in any other jurisdiction; and (e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section any special, exemplary, indirect, punitive or consequential damages. 9.13 Acknowledgments. Each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, hereby acknowledges that: (a) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents; (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to such Fund or any such Borrower arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Administrative Agent and the Lenders, on the one hand, and such Fund and each Borrower, on the other hand, in connection herewith or therewith is solely that of creditor and debtor; and (c) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Lenders or among such Fund, such Borrowers and the Lenders. 9.14 WAIVERS OF JURY TRIAL. EACH FUND, ON ITS OWN BEHALF AND IF APPLICABLE ON BEHALF OF THE INVESTMENT PORTFOLIOS THEREOF WHICH ARE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS 51 HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. 9.15 Non-Recourse. The Administrative Agent and the Lenders hereby agree for the benefit of Deutsche IMA, and each and every shareholder, trustee, director and officer of the Funds and the Borrowers and any successor, assignee, heir, estate, executor, administrator or personal representative of any such shareholder, trustee, director and officer (a "Non-Recourse Person") that: (a) no Non-Recourse Person shall have any personal liability for any obligation of any Fund or Borrower under this Agreement or any Loan Document or any other instrument or document delivered pursuant hereto or thereto (except, in the case of any shareholder, to the extent of his, her or its investment in a Borrower); (b) no claim against any Non-Recourse Person may be made for any obligation of any Fund or any Borrower under this Agreement or any Loan Document or other instrument or document delivered pursuant hereto or thereto, whether for payment of principal of, or interest on, the Loans or for any fees, expense, or other amounts payable by any Fund or any Borrower hereunder or thereunder, or otherwise; and (c) the obligations of each Borrower under this Agreement or any Loan Document or other instrument or document delivered pursuant hereto or thereto are enforceable solely against such Borrower and its properties and assets. 9.16 Integration. This Agreement and the other Loan Documents represent the agreement of each Fund, on its own behalf or if applicable on behalf of the investment portfolios thereof which are Borrowers, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 9.17 Termination of Existing Credit Facilities; Consent and Waiver. (a) Each of the Lenders hereto that is also a Lender under that certain Credit Agreement dated as of April 28, 1999 (as amended, restated, supplemented or otherwise modified from time to time, including without limitation as terminated, replaced and restated by any Termination, Replacement and Restatement Agreements, the "Kemper Agreement") by and among several of the Borrowers hereto and Chase as Administrative Agent (such Lenders constituting the "Required Lenders" as defined in the Kemper Agreement), hereby (i) acknowledges receipt of such Borrowers' written request to terminate the credit facility that is the subject of the Kemper Agreement and all of the Commitments (as defined in the Kemper Agreement) thereunder on and as of the date hereof, (ii) waives the requirement contained in Section 2.4 of the Kemper Agreement that such termination shall be effective as of the last day of a calendar quarter, and waives any and all other provisions contained in the Kemper Agreement which would prohibit such termination from occurring on and as of the date hereof, and (iii) consents (and each of such Borrowers hereby consents) to the termination of such credit facility, such Commitments, and the Borrowers' obligations thereunder (except those which by the express terms of the Kemper Agreement survive the termination of such credit facility) on and as of the date hereof. On the date hereof such Borrowers shall pay to the Lenders party to the Kemper Agreement all amounts due and owing to them as required by the Kemper Agreement (including without limitation Section 2.4 thereof) 52 in respect of such termination, such payment to be a condition precedent to the effectiveness of the foregoing termination. (b) Each of the Lenders hereto that is also a Lender under that certain Credit Agreement dated as of November 22, 1999 (as amended, restated, supplemented or otherwise modified from time to time, including without limitation as terminated, replaced and restated by any Termination, Replacement and Restatement Agreements, the "Scudder Agreement") by and among several of the Borrowers hereto and Chase as Administrative Agent (such Lenders constituting the "Required Lenders" as defined in the Scudder Agreement), hereby (i) acknowledges receipt of such Borrowers' written request to terminate the credit facility that is the subject of the Scudder Agreement and all of the Commitments (as defined in the Scudder Agreement) thereunder on and as of the date hereof, (ii) waives the requirement contained in Section 2.4 of the Scudder Agreement that such termination shall be effective as of the last day of a calendar quarter, and waives any and all other provisions contained in the Scudder Agreement which would prohibit such termination from occurring on and as of the date hereof, and (iii) consents (and each of such Borrowers hereby consents) to the termination of such credit facility, such Commitments, and the Borrowers' obligations thereunder (except those which by the express terms of the Scudder Agreement survive the termination of such credit facility) on and as of the date hereof. On the date hereof such Borrowers shall pay to the Lenders party to the Scudder Agreement all amounts due and owing to them as required by the Scudder Agreement (including without limitation Section 2.4 thereof) in respect of such termination, such payment to be a condition precedent to the effectiveness of the foregoing termination. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 53 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first written above. JPMORGAN CHASE BANK, as Administrative Agent and as a Lender By: /s/ Marybeth Mullen ------------------------------------------ Name: Marybeth Mullen Title: Vice President 54 Accepted and agreed to by: SCUDDER CASH INVESTMENT TRUST SCUDDER FUNDS TRUST, on behalf of Scudder Short Term Bond Fund SCUDDER INCOME TRUST, on behalf of Scudder GNMA Fund INVESTMENT TRUST, on behalf of Scudder Dividend and Growth Fund Scudder Growth and Income Fund Scudder Large Growth Fund Scudder S&P 500 Index Fund Scudder Small Company Stock Fund Scudder Capital Growth Fund SCUDDER PORTFOLIO TRUST, on behalf of Scudder Income Fund Scudder Balanced Fund SCUDDER MUTUAL FUNDS INC., on behalf of itself and Scudder Gold and Precious Metals Fund SCUDDER U.S. TREASURY MONEY FUND 55 SCUDDER SECURITIES TRUST, on behalf of Scudder Development Fund Scudder Health Care Fund Scudder Technology Innovation Fund Scudder Small Company Value Fund Scudder 21st Century Growth Fund SCUDDER TAX FREE MONEY FUND SCUDDER MONEY MARKET TRUST, on behalf of Scudder Money Market Series SCUDDER PATHWAY SERIES, on behalf of Pathway Moderate Portfolio Pathway Conservative Portfolio Pathway Growth Portfolio 56 SCUDDER VARIABLE SERIES I, on behalf of Balanced Portfolio Bond Portfolio Capital Growth Portfolio Global Discovery Portfolio Growth and Income Portfolio International Portfolio Money Market Portfolio 21st Century Growth Portfolio Health Sciences Portfolio SCUDDER MUNICIPAL TRUST, on behalf of Scudder Managed Municipal Bonds Scudder High Yield Tax Free Fund 57 GLOBAL/INTERNATIONAL FUND, INC., on behalf of Scudder Emerging Markets Income Fund Scudder Global Fund Scudder Global Bond Fund Scudder Global Discovery Fund THE JAPAN FUND, INC. SCUDDER STATE TAX FREE TRUST, on behalf of Scudder Massachusetts Tax Free Fund 58 SCUDDER TAX FREE TRUST, on behalf of Scudder Medium Term Tax Free Fund VALUE EQUITY TRUST, on behalf of Scudder Large Company Value Fund Scudder Select 1000 Growth Fund Scudder Select 500 Fund SCUDDER INTERNATIONAL FUND, INC., on behalf of Scudder Emerging Markets Growth Fund Scudder Greater Europe Growth Fund Scudder International Fund Scudder Latin America Fund Scudder Pacific Opportunities Fund 59 THE BRAZIL FUND, INC. THE KOREA FUND, INC. SCUDDER NEW ASIA FUND, INC. CASH ACCOUNT TRUST, on behalf of Money Market Portfolio Government Securities Portfolio Tax-Exempt Portfolio CASH EQUIVALENT FUND, on behalf of Money Market Portfolio Government Securities Portfolio Tax-Exempt Portfolio INVESTORS CASH TRUST, on behalf of Government Securities Portfolio Treasury Portfolio INVESTORS MUNICIPAL CASH FUND, on behalf of Investors Florida Municipal Cash Fund Investors New Jersey Municipal Cash Fund Investors Michigan Municipal Cash Fund Investors Pennsylvania Municipal Cash Tax-Exempt New York Money Market Portfolio SCUDDER AGGRESSIVE GROWTH FUND SCUDDER BLUE CHIP FUND 60 SCUDDER GROWTH FUND SCUDDER HIGH YIELD SERIES, on behalf of Scudder High Yield Fund SCUDDER PORTFOLIOS, on behalf of Scudder Cash Reserves Fund SCUDDER DYNAMIC GROWTH FUND SCUDDER STATE TAX-FREE INCOME SERIES, on behalf of Scudder CA Tax-Free Income Fund Scudder FL Tax-Free Income Fund Scudder NY Tax-Free Income Fund SCUDDER STRATEGIC INCOME FUND SCUDDER TECHNOLOGY FUND SCUDDER TOTAL RETURN FUND SCUDDER U.S. GOVERNMENT SECURITIES FUND SCUDDER FOCUS VALUE PLUS GROWTH FUND 61 TAX-EXEMPT CA MONEY MARKET FUND SCUDDER MONEY FUNDS, on behalf of Scudder Money Market Fund Scudder Government Money Fund Scudder Tax-Exempt Money Fund SCUDDER YIELDWISE FUNDS, on behalf of Scudder YieldWise Money Fund Scudder YieldWise Government Money Fund Scudder YieldWise Municipal Money Fund SCUDDER EQUITY TRUST, on behalf of Scudder-Dreman Financial Services Fund 62 SCUDDER INVESTORS TRUST, on behalf of Scudder Focus Growth Fund Scudder Research Fund Scudder S&P 500 Stock Fund SCUDDER INTERNATIONAL RESEARCH FUND, INC., on behalf of Scudder International Research Fund SCUDDER NEW EUROPE FUND, INC. 63 SCUDDER TARGET FUND (formerly Scudder Target Equity Fund), on behalf of Scudder Target 2010 Fund Scudder Target 2011 Fund Scudder Target 2012 Fund (formerly Scudder Retirement Fund - Series III) Scudder Retirement Fund - Series IV Scudder Retirement Fund - Series V Scudder Retirement Fund - Series VI Scudder Retirement Fund - Series VII Scudder Worldwide 2004 Fund SCUDDER VALUE SERIES, INC., on behalf of Scudder Contrarian Fund Scudder-Dreman High Return Equity Fund Scudder-Dreman Small Cap Value Fund (formerly Scudder Small Cap Value Fund) 64 SCUDDER VARIABLE SERIES II, on behalf of Scudder Aggressive Growth Portfolio Scudder Blue Chip Portfolio Scudder Contrarian Value Portfolio Scudder Global Blue Chip Portfolio Scudder Government Securities Portfolio Scudder Growth Portfolio Scudder High Yield Portfolio Scudder International Research Portfolio Scudder Investment Grade Bond Portfolio Scudder New Europe Portfolio Scudder Money Market Portfolio Scudder Small Cap Growth Portfolio Scudder Strategic Income Portfolio Scudder Technology Growth Portfolio Scudder Total Return Portfolio Scudder Focus Value+Growth Portfolio SVS Dreman Financial Services Portfolio SVS Dreman High Return Equity Portfolio SVS Dreman Small Cap Value Portfolio (formerly Scudder Small Cap Value Portfolio) SVS Focused Large Cap Growth Portfolio SVS Growth and Income Portfolio SVS Growth Opportunities Portfolio SVS Index 500 Portfolio SVS Dynamic Growth Portfolio SVS Mid Cap Growth Portfolio SVS Strategic Equity Portfolio SVS Venture Value Portfolio 65 SCUDDER INTERMEDIATE GOVERNMENT TRUST SCUDDER MUNICIPAL INCOME TRUST SCUDDER STRATEGIC INCOME TRUST SCUDDER STRATEGIC MUNICIPAL INCOME TRUST By: /s/ Brenda Lyons ---------------------------------- Name: Brenda Lyons Title: Assistant Treasurer 66 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE ABN AMRO BANK N.V., CHICAGO BRANCH By: /s/ Bryan A. Manning ------------------------------------ Name: Bryan A. Manning Title: Vice President By: /s/ John Kirk ------------------------------------ Name: John Kirk Title: Senior Vice President 67 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE THE BANK OF NOVA SCOTIA By: /s/ John M. Morale ------------------------------ Name: John M. Morale Title: Director 68 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE BANK OF MONTREAL By: /s/ Brian L. Banke ------------------------------ Name: Brian L. Banke Title: Vice President 69 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE BNP PARIBAS By: /s/ Marguerite L. Lebon ------------------------------ Name: Marguerite L. Lebon Title: Vice President By: /s/ Barry K. Chung ------------------------------ Name: Barry K. Chung Title: Vice Presicent 70 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE BROWN BROTHERS HARRIMAN & CO. By: /s/ Susan C. Livingston ------------------------------ Name: Susan C. Livingston Title: Partner 71 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE CITIBANK N.A. By: /s/ Pierre Guigui ------------------------------ Name: Pierre Guigui Title: Director 72 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Sebastian Rocco ----------------------------------- Name: Sebastian Rocco Title: Senior Vice President 73 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE CREDIT SUISSE FIRST BOSTON By: /s/ Jay Chall --------------------------------------- Name: Jay Chall Title: Director By: /s/ Jeffrey Bernstein ------------------------------ Name: Jeffrey Bernstein Title: Vice President 74 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE DANSKE BANK NEW YORK BRANCH By: /s/ George Neofitrois ------------------------------ Name: George Neofitrois Title: Vice President 75 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE FLEET NATIONAL BANK By: /s/ Scott F. Davis ------------------------------ Name: Scott F. Davis Title: Associate 76 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE LLOYDS TSB BANK PLC By: /s/ Michael J. Gilligan ------------------------------ Name: Michael J. Gilligan Title: Director Financial Institutions, USA G311 By: /s/ Matthew S. R. Tuck ------------------------------ Name: Matthew S. R. Tuck Title: Vice President Financial Institutions, USA T020 77 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE MELLON BANK, N.A. By: /s/ Marla A. DeYulis ------------------------------ Name: Marla A. DeYulis Title: Lending Officer 78 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE NORDDEUTSCHE LANDESBANK GIROZENTRALE NEW YORK BRANCH By: /s/ Josef Haas ------------------------------ Name: Josef Haas Title: Vice President By: /s/ Georg Peters ------------------------------ Name: Georg Peters Title: Vice President & Manager 79 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE THE ROYAL BANK OF SCOTLAND PLC By: /s/ Clark McGinn ------------------------------ Name: Clark McGinn Title: Senior Vice President 80 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE SOCIETE GENERALE By: /s/ Dabney Giles Treacy ------------------------------ Name: Dabney Giles Treacy Title: Director 81 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE STATE STREET BANK AND TRUST CO. By: /s/ John T. Daley ------------------------------ Name: John T. Daley Title: Vice President 82 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE UBS AG, STAMFORD BRANCH By: /s/ Wilfred Saint ------------------------------ Name: Wilfred Saint Title: Associate Director Banking Products Services, US By: /s/ Thomas R. Salzono ------------------------------ Name: Thomas R. Salzono Title: Director Banking Products Services, US 83 DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (Formerly known as Zurich Scudder Investments, Inc.), 2002 CREDIT AGREEMENT SIGNATURE PAGE WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By: /s/ Terence R. Law ------------------------------ Name: Terence R. Law Title: Executive Director By: /s/ David J. Sellers ------------------------------ Name: David J. Sellers Title: Director 84 SCHEDULE I BORROWERS & PRO RATA ALLOCATIONS
DESIGNATED BORROWERS(1) & BORROWER ASSET COVERAGE BORROWER NAME RATIO ALLOCATION - ------------- ------------ ---------- Scudder Cash Investment Trust 300% 1.13% Scudder Funds Trust on behalf of Scudder Short Term Bond Fund 300% 1.11% Scudder Income Trust on behalf of Scudder GNMA Fund 300% 4.16% Investment Trust on behalf of Scudder Dividend and Growth Fund 300% 0.03% Scudder Growth and Income Fund 300% 6.63% Scudder Large Company Growth Fund 300% 0.78% Scudder S&P 500 Index Fund 300% 0.84% Scudder Small Company Stock Fund 300% 0.09% Scudder Capital Growth Fund 300% 1.73% Scudder Portfolio Trust on behalf of Scudder Income Fund 300% 1.19% Scudder Balanced Fund 300% 0.87% Scudder Mutual Funds Inc. on behalf of Scudder Gold and Precious Metals Fund D 400% 0.11% Scudder U.S. Treasury Money Fund 300% 0.34% Scudder Securities Trust on behalf of Scudder Development Fund 300% 0.32% Scudder Health Care Fund 300% 0.22% Scudder Technology Innovation Fund 300% 0.26% Scudder Small Company Value Fund 300% 0.24% Scudder 21st Century Growth Fund 300% 0.26% Scudder Tax Free Money Fund 300% 0.32%
- ---------- (1) Each Designated Borrower is indicated by the letter "D". The Asset Coverage Ratio for any Designated Borrower is such Borrower's Designated Borrower Asset Coverage Ratio. 85 Scudder Money Market Trust on behalf of Scudder Money Market Series 300% 7.57% Scudder Pathway Series on behalf of Pathway Moderate Portfolio 300% 0.24% Pathway Conservative Portfolio 300% 0.11% Pathway Growth Portfolio 300% 0.21% Scudder Variable Series I on behalf of Balanced Portfolio 300% 0.16% Bond Portfolio 300% 0.18% Capital Growth Portfolio 300% 0.81% Global Discovery Portfolio 300% 0.15% Growth and Income Portfolio 300% 0.18% International Portfolio 300% 0.47% Money Market Portfolio 300% 0.14% 21st Century Growth Portfolio 300% 0.04% Health Sciences Portfolio 300% 0.06% Scudder Municipal Trust on behalf of Scudder Managed Municipal Bonds 300% 4.73% Scudder High Yield Tax Free Fund 300% 0.63% Global/International Fund, Inc. on behalf of Scudder Emerging Markets Income Fund D 400% 0.13% Scudder Global Fund 300% 1.04% Scudder Global Bond Fund 300% 0.17% Scudder Global Discovery Fund 300% 0.49% The Japan Fund, Inc. 300% 0.31% Scudder State Tax Free Trust. on behalf of Scudder Massachusetts Tax Free Fund 300% 0.49% Scudder Tax Free Trust on behalf of Scudder Medium Term Tax Free Fund 300% 0.60% Value Equity Trust on behalf of Scudder Large Company Value Fund 300% 2.00% Scudder Select 1000 Growth Fund 300% 0.02% Scudder Select 500 Fund 300% 0.05%
86 Scudder International Fund, Inc. on behalf of D 400% 0.05% Scudder Emerging Markets Growth Fund Scudder Greater Europe Growth Fund 300% 0.63% Scudder International Fund 300% 2.63% Scudder Latin America Fund D 400% 0.33% Scudder Pacific Opportunities Fund D 400% 0.09% The Brazil Fund, Inc. D 2000% 0.27% The Korea Fund, Inc. D 2000% 0.82% Scudder New Asia Fund, Inc. D 2000% 0.09% CASH ACCOUNT TRUST Money Market Portfolio 300% Government Securities Portfolio 300% 1.75% Tax-Exempt Portfolio 300% 1.04% CASH EQUIVALENT FUND Money Market Portfolio 300% 0.88% Government Securities Portfolio 300% 0.47% Tax-Exempt Portfolio 300% 0.30% INVESTORS CASH TRUST Government Securities Portfolio 300% 0.49% Treasury Portfolio 300% 0.06% INVESTORS MUNICIPAL CASH FUND Investors Florida Municipal Cash Fund 300% 0.06% Investors New Jersey Municipal Cash Fund 300% 0.07% Investors Michigan Municipal Cash Fund 300% 0.03% Investors Pennsylvania Municipal Cash Fund 300% 0.03% Tax-Exempt New York Money Market Portfolio 300% 0.17% SCUDDER AGGRESSIVE GROWTH FUND 300% 0.18% SCUDDER BLUE CHIP FUND 300% 0.76% SCUDDER GROWTH FUND 300% 1.45% SCUDDER HIGH YIELD SERIES Scudder High Yield Fund 300% 2.76%
87 SCUDDER PORTFOLIOS Scudder Cash Reserves Fund 300% 0.47% SCUDDER DYNAMIC GROWTH FUND 300% 0.40% SCUDDER STATE TAX-FREE INCOME SERIES Scudder CA Tax-Free Income Fund 300% 1.04% Scudder FL Tax-Free Income Fund 300% 0.07% Scudder NY Tax-Free Income Fund 300% 0.37% SCUDDER STRATEGIC INCOME FUND 300% 0.42% SCUDDER TECHNOLOGY FUND D 1000% 2.13% SCUDDER TOTAL RETURN FUND 300% 2.74% SCUDDER U.S. GOVERNMENT SECURITIES FUND 300% 3.95% SCUDDER FOCUS VALUE PLUS GROWTH FUND 300% 0.11% TAX-EXEMPT CA MONEY MARKET FUND 300% 0.52% SCUDDER MONEY FUNDS Scudder Money Market Fund 300% 5.25% Scudder Government Money Fund 300% 0.67% Scudder Tax-Exempt Money Fund 300% 0.69% SCUDDER YIELDWISE FUNDS Scudder YieldWise Money Fund 300% 0.83% Scudder YieldWise Government Money Fund 300% 0.29% Scudder YieldWise Municipal Money Fund 300% 0.46% SCUDDER EQUITY TRUST Scudder-Dreman Financial Services Fund 300% 0.16% SCUDDER INVESTORS TRUST Scudder Focus Growth Fund 300% 0.01% Scudder Research Fund 300% 0.01% Scudder S&P 500 Stock Fund 300% 0.08%
88 SCUDDER INTERNATIONAL RESEARCH FUND, INC. Scudder International Research Fund 300% 0.01% SCUDDER NEW EUROPE FUND, INC. 300% 0.16% SCUDDER TARGET FUND (formerly Scudder Target Equity Fund) Scudder Target 2010 Fund 300% 0.07% Scudder Target 2011 Fund 300% 0.12% Scudder Target 2012 Fund (formerly Scudder Retirement Fund - Series III) 300% 0.08% Scudder Retirement Fund - Series IV 300% 0.08% Scudder Retirement Fund - Series V 300% 0.09% Scudder Retirement Fund - Series VI 300% 0.05% Scudder Retirement Fund - Series VII 300% 0.04% Scudder Worldwide 2004 Fund 300% 0.02% SCUDDER VALUE SERIES, INC. Scudder Contrarian Fund 300% 0.21% Scudder-Dreman High Return Equity Fund 300% 4.13% Scudder-Dreman Small Cap Value Fund (formerly Scudder Small Cap Value Fund) 300% 0.39% SCUDDER VARIABLE SERIES II Scudder Aggressive Growth Portfolio 300% 0.07% Scudder Blue Chip Portfolio 300% 0.23% Scudder Contrarian Value Portfolio 300% 0.25% Scudder Global Blue Chip Portfolio 300% 0.04% Scudder Government Securities Portfolio 300% 0.31% Scudder Growth Portfolio 300% 0.38% Scudder High Yield Portfolio 300% 0.32% Scudder International Research Portfolio 300% 0.11% Scudder Investment Grade Bond Portfolio 300% 0.14% Scudder New Europe Portfolio 300% 0.02% Scudder Money Market Portfolio 300% 0.66% Scudder Small Cap Growth Portfolio 300% 0.21% Scudder Strategic Income Portfolio 300% 0.02% Scudder Technology Growth Portfolio D 2000% 0.33% Scudder Total Return Portfolio 300% 0.82% Scudder Focus Value+Growth Portfolio 300% 0.13% SVS Dreman Financial Services Portfolio 300% 0.12% SVS Dreman High Return Equity Portfolio 300% 0.47%
89 SVS Dreman Small Cap Value Portfolio (formerly Scudder Small Cap Value Portfolio) 300% 0.20% SVS Growth Opportunities Portfolio 300% 0.16% SVS Index 500 Portfolio 300% 0.23% SVS Dynamic Growth Portfolio 300% 0.02% SVS Mid Cap Growth Portfolio 300% 0.05% SVS Strategic Equity Portfolio 300% 0.05% SVS Venture Value Portfolio 300% 0.12% SVS Focused Large Cap Growth Portfolio 300% 0.06% SVS Growth and Income Portfolio 300% 0.18% SCUDDER INTERMEDIATE GOVERNMENT TRUST 300% 0.24% SCUDDER MUNICIPAL INCOME TRUST 300% 0.71% SCUDDER STRATEGIC INCOME TRUST 300% 0.14% SCUDDER STRATEGIC MUNICIPAL INCOME TRUST 300% 0.19%
90 SCHEDULE II COMMITMENTS, ADDRESSES, ETC.
AMOUNT OF AMOUNT OF SWING LINE NAME AND ADDRESS OF LENDER COMMITMENT ($) COMMITMENT - -------------------------- -------------- ---------- JPMORGAN CHASE BANK $100,000,000 $0 270 Park Avenue, 15th Floor New York, New York 10017 Attn: Marybeth Mullen Tel: (212) 270-5049 Fax: (212) 270-0670 E-mail: marybeth.mullen@jpmorgan.com STATE STREET BANK AND TRUST CO. $125,000,000 $125,000,000 Lafayette Corp. Center 2 Avenue de Lafayette 2nd Floor Boston, MA 02211 Attn: John Daley Tel: (617) 662-2312 Fax: (617) 662-2325 E-mail: jtdaley@statestreet.com CREDIT LYONNAIS NEW YORK BRANCH $100,000,000 $0 Credit Lyonnais Building 1301 Avenue of the Americas New York, New York 10019-6022 Attn: Rose Marie Dicanto Tel: (212) 261-7407 Fax: (212) 261-3438 E-mail: dicanto@clamericas.com DANSKE BANK $100,000,000 $0 NEW YORK BRANCH 299 Park Avenue, 14th Floor New York, New York 10171 Attn: George Neofitidis Tel: (212) 984-8439 Fax: (212) 984-9568 E-mail: gne@us.danskebank.com
91 FLEET NATIONAL BANK $100,000,000 $0 100 Federal Street MADE 10010H Boston, MA 02110 Attn: Robert McClelland Tel: (617) 434-3710 Fax: (617) 434-1096 E-mail: robert_w_mcclellane@fleet.com ABN AMRO BANK N.V., CHICAGO BRANCH $70,000,000 $0 135 South LaSalle Street Chicago, IL 60603 Attn: Bryan Manning Tel: (312) 904-5035 Fax: (312) 904-4563 E-mail: bryan.manning@abnamro.com BNP PARIBAS $70,000,000 $0 787 Seventh Avenue New York, New York 10019-6016 Attn: Barry Chung Tel: (212) 841-2989 Fax: (212) 841-2533 E-mail: barry.chung@americas.bnpparibas.com CITIBANK N.A. $70,000,000 $0 388 Greenwich Street, 22nd Floor New York, New York 10013 Attn: Pierre Guigui Tel: (212) 816-3363 Fax: (212) 816-4140\ E-mail: pierre.n.guigui@citi.com LLOYDS TSB BANK PLC $70,000,000 $0 1251 Avenue of the Americas, 39th Floor New York, New York 10020 Attn: Michael Gilligan Tel: (212) 930-8911 Fax: (212) 930-5098 E-mail: mgilligan@lloydstsb-usa.com
92 THE ROYAL BANK OF SCOTLAND PLC $70,000,000 $0 101 Park Avenue New York, New York 10178 Attn: Clark McGinn Tel: (212) 401-3767 Fax: (212) 401-3456 E-mail: clark.mcginn@rbos.com THE BANK OF NOVA SCOTIA $50,000,000 $0 New York Agency 1675 Broadway, 24th Floor New York, New York 10019 Attn: John Morale Tel: (917) 744-0840 Fax: (212) 506-6996 E-mail: jmorale@scotiacapital.com BANK OF MONTREAL $50,000,000 $0 3 Times Square New York, New York 10036 Attn: Brian Banke Tel: (212) 605-1643 Fax: (212) 605-1454 E-mail: brianbanke@bmo.com CREDIT SUISSE FIRST BOSTON $50,000,000 $0 Eleven Madison Avenue New York, New York 10010-3629 Attn: Karl Studer Tel: (212) 325-9163 Fax: (212)325-8320 Karl.Studer@csfb.com MELLON BANK, N.A. $50,000,000 $0 One Mellon Bank Center Pittsburgh, PA 15258-0001 Attn: Marla DeYulis Tel: (412) 236-9141 Fax: (412) 234-8087 E-mail: deyulis.ma@mellon.com
93 NORDDEUTSCHE LANDESBANK $50,000,000 $0 GIROZENTRALE NEW YORK BRANCH 1114 Avenue of the Americas New York, New York 10036 Attn: Georg Peters Tel: (212) 812-6993 Fax: (212) 812-6860 E-mail: georg.peters@nordlb.com SOCIETE GENERALE $50,000,000 $0 1221 Avenue of the Americas New York, New York 10020 Attn: Dabney Treacy Tel: (212) 278-7174 Fax: (212) 278-7569 E-mail: dabney.treacy@us.socgen.com UBS AG, STAMFORD BRANCH $50,000,000 $0 677 Washington Boulevard Stamford, CT 06901 Attn: Gregory Raue Tel: (212) 821-3335 Fax: (212) 821-3330 E-mail: gregory.raue@ubsw.com WESTDEUTSCHE LANDESBANK $50,000,000 $0 GIROZENTRALE, NEW YORK BRANCH 1211 Avenue of the Americas New York, New York 10036 Attn: Terence Law Tel: (212) 852-6242 Fax: (212) 852-6156 E-mail: terence_law@westlb.com BROWN BROTHERS HARRIMAN & CO. $25,000,000 $0 40 Water Street Boston, MA 02109-3661 Attn: Carolyn Bianchi Tel: (617) 772-1376 Fax: (617) 772-2333 E-mail: carolyn.bianchi@bbn.com
94 SCHEDULE III INVESTMENT MANAGEMENT AGREEMENTS For each Fund, an Investment Management Agreement dated April 5, 2002 between Deutsche IMA and such Fund. 95 SCHEDULE IV CUSTODY AGREEMENTS 1. Custodian Agreement between State Street Bank and Trust Company and Scudder Cash Investment Trust dated March 19, 1980, as amended. 2. Custodian Agreement between State Street Bank and Trust Company and Scudder Funds Trust dated December 17, 1982, as amended. 3. Custodian Agreement between State Street Bank and Trust Company and Scudder Income Trust dated November 30, 1984, as amended. 4. Custodian Agreement between State Street Bank and Trust Company and Investment Trust dated December 31, 1984, as amended. 5. Custodian Agreement between State Street Bank and Trust Company and Scudder Portfolio Trust dated December 31, 1984, as amended. 6. Custodian Agreement between State Street Bank and Trust Company and Scudder Mutual Funds, Inc. dated August 23, 1991, as amended. 7. Custodian Agreement between State Street Bank and Trust Company and Scudder U.S. Treasury Money Fund dated May 21, 1980, as amended. 8. Custodian Agreement between State Street Bank and Trust Company and Scudder Securities Trust dated September 6, 1995, as amended. 9. Custodian Agreement between State Street Bank and Trust Company and Scudder Tax Free Money Fund dated December 31, 1979, as amended. 10. Custodian Agreement between State Street Bank and Trust Company and Scudder Money Market Trust dated August 7, 2000, as amended. 11. Custodian Agreement between State Street Bank and Trust Company and Scudder Pathway Series dated November 15, 1996, as amended. 12. Custodian Agreement between State Street Bank and Trust Company and Scudder Variable Series I dated August 22, 1985, as amended. 13. Custodian Agreement between State Street Bank and Trust Company and Scudder Municipal Trust dated February 7, 2000, as amended. 14. Custodian Agreement between State Street Bank and Trust Company and Scudder State Tax Free Trust dated June 14, 1983, as amended. 96 15. Custodian Agreement between State Street Bank and Trust Company and Scudder Tax Free Trust dated April 12, 1983, as amended. 16. Custodian Agreement between State Street Bank and Trust Company and Value Equity Trust dated October 1, 1982, as amended. 17. Custodian Agreement between State Street Bank and Trust Company and Cash Account Trust dated April 19, 1999, as amended. 18. Custodian Agreement between State Street Bank and Trust Company and Cash Equivalent Fund dated April 19, 1999, as amended. 19. Custodian Agreement between State Street Bank and Trust Company and Investors Cash Trust dated April 19, 1999, as amended. 20. Custodian Agreement between State Street Bank and Trust Company and Investors Municipal Cash Fund dated May 3, 1999, as amended. 21. Custodian Agreement between State Street Bank and Trust Company and Scudder Aggressive Growth Fund dated February 22, 1999, as amended. 22. Custodian Agreement between State Street Bank and Trust Company and Scudder Blue Chip Fund dated March 3, 1999, as amended. 23. Custodian Agreement between State Street Bank and Trust Company and Scudder Growth Fund dated March 3, 1999, as amended. 24. Custodian Agreement between State Street Bank and Trust Company and Scudder High Yield Series dated April 5, 1999, as amended. 25. Custodian Agreement between State Street Bank and Trust Company and Scudder Portfolios dated April 5, 1999, as amended. 26. Custodian Agreement between State Street Bank and Trust Company and Scudder Dynamic Growth Fund dated April 5, 1999, as amended. 27. Custodian Agreement between State Street Bank and Trust Company and Scudder State Tax-Free Income Series dated March 15, 1999, as amended. 28. Custodian Agreement between State Street Bank and Trust Company and Scudder Strategic Income Fund dated March 22, 1999, as amended. 29. Custodian Agreement between State Street Bank and Trust Company and Scudder Technology Fund dated March 3, 1999, as amended. 97 30. Custodian Agreement between State Street Bank and Trust Company and Scudder Total Return Fund dated February 22, 1999, as amended. 31. Custodian Agreement between State Street Bank and Trust Company and Scudder U.S. Government Securities Fund dated April 5, 1999, as amended. 32. Custodian Agreement between State Street Bank and Trust Company and Scudder Focus Value Plus Growth Fund dated April 19, 1999, as amended. 33. Custodian Agreement between State Street Bank and Trust Company and Tax-Exempt CA Money Market Fund dated May 3, 1999, as amended. 34. Custodian Agreement between State Street Bank and Trust Company and Zurich Money Funds dated April 19, 1999, as amended. 35. Custodian Agreement between State Street Bank and Trust Company and Zurich Yieldwise Funds dated November 30, 1998, as amended. 36. Custodian Agreement between State Street Bank and Trust Company and Scudder Equity Trust dated March 9, 1998, as amended. 37. Custodian Agreement between State Street Bank and Trust Company and Scudder Investors Trust dated December 30, 1998, as amended. 38. Custodian Agreement between State Street Bank and Trust Company and Scudder Target Fund dated February 22, 1999, as amended. 39. Custodian Agreement between State Street Bank and Trust Company and Scudder Value Series, Inc. dated February 22, 1999, as amended. 40. Custodian Agreement between State Street Bank and Trust Company and Scudder Variable Series II dated February 22, 1999, as amended. 41. Custodian Agreement between State Street Bank and Trust Company and Scudder Intermediate Government Trust dated April 5, 1999, as amended. 42. Custodian Agreement between State Street Bank and Trust Company and Scudder Municipal Income Trust dated March 15, 1999, as amended. 43. Custodian Agreement between State Street Bank and Trust Company and Scudder Strategic Income Trust dated March 22, 1999, as amended. 44. Custodian Agreement between State Street Bank and Trust Company and Scudder Strategic Municipal Income Trust dated March 15, 1999, as amended. 98 45. Custodian Agreement between Brown Brothers Harriman and Global/International Fund, Inc. dated [DATE], as amended. 46. Custodian Agreement between Brown Brothers Harriman and The Japan Fund, Inc. dated [DATE], as amended. 47. Custodian Agreement between Brown Brothers Harriman and Scudder International Fund, Inc. dated [DATE], as amended. 48. Custodian Agreement between Brown Brothers Harriman and The Brazil Fund, Inc. dated [DATE], as amended. 49. Custodian Agreement between Brown Brothers Harriman and The Korea Fund, Inc. dated [DATE], as amended. 50. Custodian Agreement between Brown Brothers Harriman and Scudder New Asia Fund, Inc. dated [DATE], as amended. 51. Custodian Agreement between Brown Brothers Harriman and Scudder International Research Fund, Inc. dated [DATE], as amended. 52. Custodian Agreement between Brown Brothers Harriman and Scudder New Europe Fund, Inc. dated [DATE], as amended. 99 EXHIBIT 2.5(E) FORM OF NOTE $__________________ New York, New York , 200__ FOR VALUE RECEIVED, [the Borrower] (the "Borrower"), hereby unconditionally promises to pay to the order of __________________________, at the office of JPMORGAN CHASE BANK, as administrative agent for the Lenders (the "Lenders") under the Credit Agreement, as hereinafter defined (in such capacity, the "Administrative Agent"), located at 270 Park Avenue, New York, New York 10017, in lawful money of the United States of America and in immediately available funds, on the Maturity Date the principal amount of (a)__________ DOLLARS ($ ), or, if less (b) the aggregate unpaid principal amount of all Loans made by the Lenders to the Borrower pursuant to subsection 2.1 of the Credit Agreement, as hereinafter defined. The undersigned further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time from the Closing Date at the applicable rates per annum set forth in subsection 2.7 of the Credit Agreement referred to below until any such amount shall become due and payable (whether at the stated maturity, by acceleration or otherwise), and thereafter on such overdue amount at the rate per annum set forth in subsection 2.7(b) of the Credit Agreement until paid in full (both before and after judgment). Interest shall be payable in arrears on each applicable Interest Payment Date, commencing on the first such date to occur after the date hereof and terminating upon payment (including prepayment) in full of the unpaid principal amount hereof; provided that interest accruing on any overdue amount shall be payable on demand. The holder of this Note is authorized to endorse on the schedule annexed hereto and made a part hereof the date and amount of each Loan made to the Borrower pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof. Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement shall not affect the obligations of the Borrower in respect of such Loan. This Note (a) is one of the Notes referred to in the Credit Agreement, dated as of April 11, 2002 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the Borrower, the Lenders and the Administrative Agent, (b) is subject to the provisions of the Credit Agreement and (c) is subject to optional and mandatory prepayment in whole or in part as provided in the Credit Agreement. 100 Upon the occurrence of one or more Events of Default, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement. All parties now and hereafter liable with respect to this Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK. [NAME OF FUND] on behalf of [NAME OF BORROWER] By: ----------------------- Name: Title: 101 Schedule A to Note LOANS AND REPAYMENTS OF LOANS
AMOUNT OF UNPAID PRINCIPAL PRINCIPAL AMOUNT OF OF LOANS BALANCE OF NOTATION DATE LOANS REPAID LOANS MADE BY - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
102 EXHIBIT 2.16(A) FORM OF DESIGNATION OF NEW BORROWERS --------- --, [ ] JPMORGAN CHASE BANK, as Administrative Agent Each of the Lenders under the Credit Agreement identified below Ladies and Gentlemen: Reference is made to that certain Credit Agreement, dated as of April 11, 2002 among certain mutual funds managed by Deutsche Investment Management Americas Inc. (each, a "Fund", and collectively, the "Funds"), each on behalf of itself, and certain of its respective investment portfolios set forth beneath such Fund's name on the signature pages thereto (each of which investment portfolios is, individually, a "Borrower" and, collectively, the "Borrowers"), the several banks (the "Lenders") from time to time parties thereto and JPMorgan Chase Bank as administrative agent for the Lenders (the "Agreement"). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Agreement. The undersigned open-end registered investment Company (the "New Fund"), on behalf of the investment portfolios set forth beneath its name (each such investment portfolio a "New Borrower") hereby requests that each New Borrower be admitted as an additional Borrower under the Agreement. The New Fund and each New Borrower hereby represent and warrant to the Administrative Agent and each Lender that as of [ ] and after giving effect to the admission of each New Borrower as an additional Borrower under the Agreement: (i) the representations and warranties set forth in Section 3 of the Agreement are true and correct with respect to it; (ii) it is in compliance in all material respects with all the terms and provisions set forth in the Agreement; (iii) no Default or Event of Default with respect to it has occurred and is continuing. Each New Borrower agrees to be bound by the terms and conditions of the Agreement in all respects as a Borrower thereunder and hereby assumes all of the obligations of a Borrower thereunder. Please indicate your assent to the admission of each New Borrower as an additional Borrower under the Agreement by executing the [ ] Amendment Agreement dated as of the date hereof. [SIGNATORIES] 103 EXHIBIT 9.6 (C) FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the CREDIT AGREEMENT, dated as of April 11, 2002 (as amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among (i) certain mutual funds managed by Deutsche Investment Management Americas Inc., on behalf of themselves and each series or portfolio of the fund named therein (each a "Borrower", and collectively, the "Borrowers"); (ii) JPMorgan Chase Bank, a New York banking corporation, as a Lender and as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent") and (iii) the several banks from time to time parties to this Agreement (the "Lenders"). Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. (the "Assignor") and ------------------------------------------ (the "Assignee") agree as follows: -------------------------------------------- 1. The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date (as defined below) the interest described in Schedule 1 hereto (the "Assigned Interest") in and to the Assignor's rights and obligations under the Credit Agreement. 2. The Assignor (a) makes no representation or warranty and assumes no responsibility with respect to or in any connection with the Credit Agreement or with respect to the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that the Assignor has not created any adverse claim upon the interest being assigned by it hereunder and that such interest is free and clear of any such adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower, or any other obligor or the performance or observance by any Borrower, or any other obligor of any of their respective obligations under the Credit Agreement or any other Loan Document or any other instrument or document furnished pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the Assigned Interest and (i) requests that the Administrative Agent, upon request by the Assignee, exchange the attached Notes for a new Note or Notes payable to the Assignee and (ii) if the Assignor has retained any interest in the Assigned Interest, requests that the Administrative Agent exchange the attached Notes for a new Note or Notes payable to the Assignor, in each case in amounts which reflect the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date). 3. The Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (b) confirms that it has received a copy of the Credit Agreement, together with copies of such other documents and information as it has deemed appropriate to make 104 its own credit analysis and decision to enter into this Assignment and Acceptance; (c) agrees that it will, independently and without reliance upon the Assignor, the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Credit Agreement, the other Loan Documents or any other instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to subsection 2.11(b) of the Credit Agreement. 4. The effective date of this Assignment and Acceptance shall be (the "Effective Date"). Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and recording by the Administrative Agent pursuant to the Credit Agreement, effective as of the Effective Date (which shall not, unless otherwise agreed to by the Administrative Agent, be earlier than five Business Days after the date of such acceptance and recording by the Administrative Agent). 5. Upon such acceptance and recording, from and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee whether such amounts have accrued prior to the Effective Date or accrue subsequent to the Effective Date. The Assignor and the Assignee shall make all appropriate adjustments in payments by the Administrative Agent for periods prior to the Effective Date or with respect to the making of this assignment directly between themselves. 6. From and after the Effective Date, (a) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and under the other Loan Documents and shall be bound by the provisions thereof and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement. 7. This Assignment and Acceptance shall be governed by and construed in accordance with the substantive laws of the State of New York. 105 IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed as of the date first above written by their respective duly authorized officers. [NAME OF ASSIGNEE] [NAME OF ASSIGNOR] By: By: -------------------- -------------------- Name: Name: Title: Title: Accepted and Consented To: JPMORGAN CHASE BANK, as a Lender and as Administrative Agent By: -------------------- Name: Title: If Required by Credit Agreement: DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC., on behalf of itself and Borrowers By: -------------------- Name: Title: 106 SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE RELATING TO THE CREDIT AGREEMENT DATED AS OF APRIL 11, 2002 Name of Assignor: Name of Assignee: Effective Date of Assignment: Principal Commitment Percentage Amount Assigned Assigned(2) $ % -------------- ---.---------------- - ---------- (2) Calculate the Commitment Percentage that is assigned to at least 15 decimal places and show as a percentage of the aggregate commitments of all Lenders. 107 EX-99.B.2 10 y93395taexv99wbw2.txt TERMINATION REPLACEMENT AND RESTATEMENT AGREEMENT Exhibit (b)(2) CERTAIN MUTUAL FUNDS MANAGED BY DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC. (FORMERLY KNOWN AS ZURICH SCUDDER INVESTMENTS, INC.), TERMINATION, REPLACEMENT AND RESTATEMENT AGREEMENT DATED AS OF APRIL 10, 2003 RELATING TO $1,300,000,000 CREDIT AGREEMENT DATED AS OF APRIL 11, 2002 JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT J. P. MORGAN SECURITIES INC., AS ADVISOR, LEAD ARRANGER, AND BOOK MANAGER STATE STREET BANK AND TRUST CO. AND DANSKE BANK NEW YORK BRANCH, AS SYNDICATION AGENTS TERMINATION, REPLACEMENT AND RESTATEMENT AGREEMENT (this "TRR AGREEMENT") dated as of April 10, 2003, among (i) the undersigned registered investment companies (each, a "FUND", and collectively, the "FUNDS"), each of which is executing this TRR Agreement on behalf of itself, or, if applicable, certain of its investment portfolios set forth beneath such Fund's name on the signature pages hereon (each of which Funds or investment portfolios, as the case may be, is, individually, a "BORROWER" and collectively, the "BORROWERS"), (ii) the several banks and other financial institutions from time to time parties to this TRR Agreement (as defined below, the "LENDERS") and (iii) JPMORGAN CHASE BANK, a New York banking corporation, as administrative agent for the Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT"); WHEREAS, certain of the Borrowers, the Lenders and the Administrative Agent are parties to a Credit Agreement (the "ORIGINAL CREDIT AGREEMENT") dated as of April 11, 2002 (the "ORIGINAL CLOSING DATE"), as amended by the Designation of New Borrower and First Amendment to Credit Agreement dated November 19, 2002; WHEREAS, the Original Credit Agreement is to be terminated as provided herein; and WHEREAS, the Lenders and the Administrative Agent are willing, subject to the terms and conditions of this TRR Agreement, to replace the Original Credit Agreement with a new credit agreement as provided herein. NOW, THEREFORE, in consideration of the mutual agreements contained in this TRR Agreement and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows: SECTION 1. TERMINATION, REPLACEMENT AND RESTATEMENT. Subject to the conditions set forth in Section 3 hereof: (a) The Original Credit Agreement, including all schedules and exhibits thereto, is hereby terminated, subject to applicable provisions set forth therein as to the survival of certain rights and obligations, and simultaneously replaced by a new credit agreement (the "NEW CREDIT AGREEMENT") identical in form and substance to the Original Credit Agreement except as expressly set forth below. (The terms of such Original Credit Agreement shall be deemed to be incorporated by reference herein, but modified as expressly set forth below.) Capitalized terms used but not defined herein shall have the meanings given them in the New Credit Agreement. (b) The preamble of the New Credit Agreement shall read as follows: "AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 10, 2003 (as amended, restated, supplemented or otherwise modified from time to time, this "Agreement") among (i) the registered investment companies listed on Schedule I hereto (each, a "Fund", and collectively, the "Funds"), each of which is executing this Agreement on behalf of itself, or, if applicable, certain of its respective investment portfolios set forth beneath such Fund's name on Schedule I hereto (each of which Funds or investment portfolios, as the case may be, is, individually, a "Borrower" and, collectively, the "Borrowers"), (ii) the several banks and other financial institutions from time to time parties to this Agreement (the "Lenders") and (iii) JPMORGAN CHASE BANK, a New York banking corporation, as a Lender and as administrative agent for the Lenders hereunder (in such capacity, the "Administrative Agent");" (c) Section 1 (Defined Terms) of the New Credit Agreement shall be amended as follows: (i) the definition of "Aggregate Commitment" shall be amended by replacing "$1,300,000,000" with "$1,250,000,000". (ii) the definition of "Maturity Date" shall be amended by replacing "(or, with respect to a Swing Line Loan, seven days after the Borrowing date therefor)" with "(or, with respect to a Swing Line Loan, fourteen days after the Borrowing date therefor)". (iii) the definition of "Termination Date" shall amended by replacing "April 10, 2003" with "April 8, 2004". (d) The second sentence of Section 2.3(a) of the New Credit Agreement shall be amended and restated to read in its entirety as follows: "Such Commitment Fee shall be payable quarterly in arrears on the fifth Business Day after the last Business Day of each March, June, September and December and on the Termination Date, commencing on the first of such dates to occur after the date hereof." (e) Section 2.15(a) of the New Credit Agreement shall be amended by replacing "Either the Swing Line Lender or the Administrative Agent, at any time in its sole and absolute discretion may, and on the seventh day (or if such day is not a Business Day, the next Business Day following the seventh day)" with "Either the Swing Line Lender or the Administrative Agent, at any time in its sole and absolute discretion may, and on the fourteenth day (or if such day is not a Business Day, the next Business Day following the fourteenth day)". (f) Section 3.2 of the New Credit Agreement shall be amended and restated to read in its entirety as follows: "3.2 No Change. For each Borrower, since the date of the statement of assets and liabilities for the most recently ended fiscal year for which annual reports have been prepared for such Borrower (such date, the "Reporting Date"), there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect with respect to such Borrower. (For the avoidance of doubt, the representation contained in this Section 3.2 shall be made on and as of the date hereof only and shall not be brought down at the time of any borrowing hereunder on any subsequent date.)" 2 (g) Section 6.12 of the New Credit Agreement shall be amended by replacing "Scudder Gold Fund" with "Scudder Gold and Precious Metals Fund". (h) Section 7 of the New Credit Agreement shall be amended by adding "or" at the end of paragraph (j) and adding paragraph (k) to read in its entirety as follows: "(k) as specified in Section 2.17(a)(v) of this Agreement, a default by a Borrower with respect to an Interfund Loan;" (i) Section 9.10(b)(i)(vi) of the New Credit Agreement shall be amended and restated to read in its entirety as follows: "(vi) subject to an agreement containing provisions substantially the same as those of this subsection, to any Assignee or Participant or any prospective Assignee or Participant, or any actual or proposed contractual counterparty (or its advisors) to any securitization, hedge, or other derivative transaction relating to the parties' obligations hereunder, which executes such agreement or" (j) Section 9.10(b) of the New Credit Agreement shall be amended by adding clause (iii) at the end thereof to read in its entirety as follows: "(iii) Notwithstanding any other provision in this Agreement, each of the parties hereto (and each employee, representative, or other agent of any such party) may disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such U.S. tax treatment and U.S. tax structure, other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws." (k) Section 9.12(e) of the New Credit Agreement shall be amended and restated to read in its entirety as follows: "(e) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding relating to this Agreement or to any other Loan Document, any special, exemplary, indirect, punitive or consequential damages." (l) The New Credit Agreement shall be amended by deleting Section 9.17. (m) SCHEDULE I of the New Credit Agreement shall be in the form of SCHEDULE I to this TRR Agreement. (n) SCHEDULE II of the New Credit Agreement shall be in the form of SCHEDULE II to this TRR Agreement. 3 (o) SCHEDULE IV of the New Credit Agreement shall be in the form of SCHEDULE IV to this TRR Agreement. (p) Each of the Administrative Agent, the Lenders and the Borrowers acknowledge that the following borrowers (the "NEW BORROWERS") were not parties to the Original Credit Agreement: Scudder Strategic Growth Fund (a portfolio of Scudder Growth Trust) Fixed Income Fund Municipal Bond Fund Short Duration Fund Short Term Municipal Bond Fund High Income Plus Fund Micro Cap Fund European Equity Fund International Select Equity Fund Emerging Markets Debt Fund (each a portfolio of Morgan Grenfell Investment Trust) Asset Management Portfolio Cash Management Portfolio Equity 500 Index Portfolio International Equity Portfolio Treasury Money Portfolio Small Cap Index Fund EAFE Index Fund Equity 500 Index Fund (each a portfolio of Deutsche Asset Management VIT Funds) Asset Management Portfolio II Asset Management Portfolio III EAFE Equity Index Portfolio Liquid Assets Portfolio PreservationPlus Income Portfolio PreservationPlus Portfolio US Bond Index Portfolio (each a portfolio of BT Investment Portfolios) 4 Mid Cap Fund NY Tax Free Money Fund Investment Small Cap Fund Tax Free Money Fund Investment (each a portfolio of BT Investment Funds) Daily Assets Fund Institutional Treasury and Agency Fund Institutional (each a portfolio of BT Institutional Funds) Flag Investors Communications Fund, Inc. Flag Investors Value Builder Fund, Inc. Flag Investors Equity Partners Fund, Inc. Prime Series Treasury Series Tax-free Series (each a portfolio of Deutsche Bank Alex Brown Cash Reserves Fund, Inc.) Scudder Global High Income Fund, Inc. Global Biotechnology Fund (a portfolio of Deutsche Investors Funds, Inc.) Top 50 US Portfolio Japanese Equity Portfolio (each a portfolio of Deutsche Investors Portfolios Trust) RREEF Real Estate Securities Fund (a portfolio of Scudder RREEF Securities Trust) RREEF Real Estate Fund, Inc. For the avoidance of doubt, each reference to "Borrower" or "Borrowers" in the New Credit Agreement shall be deemed to include the New Borrowers, and each of the New Borrowers agrees to be bound by the terms and conditions of the New Credit Agreement in all respects as a Borrower thereunder; PROVIDED, HOWEVER, that no New Borrower shall be liable for any obligation incurred by the Borrowers or any individual Borrower before the Effective Date (as defined herein). SECTION 2. REPRESENTATIONS AND WARRANTIES. To induce the Administrative Agent and the Lenders to enter into this TRR Agreement and to make the Loans (as defined in the New Credit Agreement), each Fund on behalf of itself 5 and each Borrower hereby represents and warrants to the Administrative Agent and each Lender as follows (it being agreed that each Fund represents and warrants only to matters with respect to itself and, if applicable, each investment portfolio thereof that is a Borrower, and each Borrower represents and warrants only to matters with respect to itself): (a) This TRR Agreement and the New Credit Agreement have been duly authorized and, in the case of this TRR Agreement, executed and delivered by it and constitute its legal, valid and binding obligations enforceable in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). (b) The representations and warranties set forth in Section 3 of the New Credit Agreement are true and correct in all material respects on the date hereof with the same effect as if made on the date hereof, except to the extent such representations and warranties expressly relate to an earlier date. (c) Before and after giving effect to this TRR Agreement, no Default has occurred and is continuing. SECTION 3. CONDITIONS TO EFFECTIVENESS. This TRR Agreement and the New Credit Agreement, including the agreement of each Lender to make Loans thereunder, shall become effective as of the date hereof (the "EFFECTIVE DATE") upon the occurrence of the following conditions precedent (which shall be deemed to satisfy Section 4.1 of the New Credit Agreement): (a) The Administrative Agent shall have received counterparts of this TRR Agreement which, when taken together, bear the signatures of all the parties hereto. (b) The Administrative Agent shall have received, on behalf of itself and the Lenders, a favorable written opinion of counsel for the Borrowers referring to this TRR Agreement and the New Credit Agreement, (i) dated the date hereof, (ii) addressed to the Administrative Agent and the Lenders, and (iii) covering such other matters relating to this TRR Agreement and the transactions hereunder and under the New Credit Agreement as the Administrative Agent or its counsel shall reasonably request, and the Borrowers hereby instruct their counsel to deliver such opinion. (c) All legal matters incident to this TRR Agreement, the New Credit Agreement and the borrowings and extensions of credit hereunder shall be satisfactory to the Lenders and to Pryor Cashman Sherman & Flynn LLP, counsel for the Administrative Agent. (d) The Administrative Agent shall have received on the date hereof: (i) a certificate of the Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of each Fund dated the date hereof and certifying that attached thereto are true 6 and correct copies of the following: (A) resolutions duly adopted by the Board of Trustees or Directors, as the case may be, of each such Fund on its own behalf or, if applicable, on behalf of each investment portfolio thereof that is a Borrower, authorizing this TRR Agreement and the execution, delivery and performance of this TRR Agreement and the borrowings under the New Credit Agreement, and that such resolutions have not been modified, rescinded or amended and are in full force and effect; (B) if not a party to the Original Credit Agreement, each Fund's Declaration of Trust or Articles of Incorporation, as the case may be, or if a party to the Original Credit Agreement, any amendments since the Original Closing Date to such Fund's Declaration of Trust or Articles of Incorporation, as the case may be; (C) if not a party to the Original Credit Agreement, each Fund's By-laws, or if a party to the Original Credit Agreement, any amendments since the Original Closing Date to such Fund's By-laws; (D) if not a party to the Original Credit Agreement, each Fund's Investment Management Agreement, or if a party to the Original Credit Agreement, any amendments since the Original Closing Date to such Fund's Investment Management Agreement; (E) if not a party to the Original Credit Agreement, each Fund's Custodian Agreement, or if a party to the Original Credit Agreement, any amendments since the Original Closing Date to such Fund's Custodian Agreement; (F) each Fund's most recent Prospectus; (G) each Fund's most recent Statement of Additional Information; (H) each Fund's most recent annual financial report; and (I) each Fund's most recent semi-annual financial report; (ii) a certificate of the Secretary or Assistant Secretary of each Fund dated the date hereof and certifying as to the incumbency and specimen signature of each officer executing this TRR Agreement, the New Credit Agreement or any other document delivered in connection herewith on behalf of each such Fund; (iii) a certificate of another officer as to the incumbency and specimen signature of the officer executing the certificates pursuant to (ii) above; and (iv) such other documents as the Lenders or counsel for the Administrative Agent may reasonably request. (e) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the date hereof, including, to the extent invoiced, reimbursement or payment of all out-of pocket expenses required to be reimbursed or paid by the Borrowers or Funds hereunder. SECTION 4. APPLICABLE LAW. THIS TRR AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. 7 SECTION 5. COUNTERPARTS. This TRR Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. SECTION 6. EXPENSES. Each Borrower agrees, severally and neither jointly nor jointly and severally, to reimburse the Administrative Agent, in accordance with such Borrower's Pro Rata Allocation (as defined in the New Credit Agreement), for the Administrative Agent's out-of-pocket expenses in connection with this TRR Agreement not yet paid pursuant to Section 3(e) hereof, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent. * * * 8 IN WITNESS WHEREOF, the parties hereto have caused this TRR Agreement to be duly executed by their respective authorized officers as of the day and year first written above. JPMORGAN CHASE BANK, as Administrative Agent and as a Lender By: /s/ Marybeth Mullen -------------------- Name: Marybeth Mullen Title: Vice President, JPMorgan Chase Bank JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SCUDDER CASH INVESTMENT TRUST; SCUDDER FUNDS TRUST, on behalf Scudder Short Term Bond Fund; SCUDDER INCOME TRUST, on behalf of Scudder GNMA Fund; INVESTMENT TRUST, on behalf of Scudder Growth and Income Fund, Scudder Large Company Growth Fund, Scudder Small Company Stock Fund, and Scudder Capital Growth Fund; SCUDDER PORTFOLIO TRUST, on behalf of Scudder Income Fund, and Scudder Balanced Fund; SCUDDER MUTUAL FUNDS INC., on behalf of Scudder Gold and Precious Metals Fund; SCUDDER U.S. TREASURY MONEY FUND; SCUDDER SECURITIES TRUST, on behalf of Scudder Development Fund, Scudder Health Care Fund, Scudder Technology Innovation Fund, Scudder Small Company Value Fund, and Scudder 21st Century Growth Fund; SCUDDER TAX FREE MONEY FUND; SCUDDER MONEY MARKET TRUST, on behalf of Scudder Money Market Series; SCUDDER PATHWAY SERIES, on behalf of Pathway Moderate Portfolio, Pathway Conservative Portfolio, and Pathway Growth Portfolio; JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SCUDDER VARIABLE SERIES I, on behalf of Balanced Portfolio, Bond Portfolio, Capital Growth Portfolio, Global Discovery Portfolio, Growth and Income Portfolio, International Portfolio, Money Market Portfolio, 21st Century Growth Portfolio, and Health Sciences Portfolio; SCUDDER MUNICIPAL TRUST, on behalf of Scudder Managed Municipal Bonds, and Scudder High Yield Tax Free Fund; GLOBAL/INTERNATIONAL FUND, INC., on behalf of Scudder Emerging Markets Income Fund, Scudder Global Fund, Scudder Global Bond Fund, and Scudder Global Discovery Fund; SCUDDER STATE TAX FREE TRUST, on behalf of Scudder Massachusetts Tax Free Fund; SCUDDER TAX FREE TRUST, on behalf of Scudder Medium Term Tax Free Fund; VALUE EQUITY TRUST, on behalf of Scudder Large Company Value Fund, and Scudder Select 500 Fund; SCUDDER INTERNATIONAL FUND, INC., on behalf of Scudder Emerging Markets Growth Fund, Scudder Greater Europe Growth Fund, Scudder International Fund, Scudder Latin America Fund, and Scudder Pacific Opportunities Fund; THE BRAZIL FUND, INC.; THE KOREA FUND, INC.; SCUDDER NEW ASIA FUND, INC.; JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE CASH ACCOUNT TRUST, on behalf of Money Market Portfolio, Government Securities Portfolio, and Tax-Exempt Portfolio; CASH EQUIVALENT FUND, on behalf of Money Market Portfolio, Government Securities Portfolio, and Tax-Exempt Portfolio; INVESTORS CASH TRUST, on behalf of Government Securities Portfolio, and Treasury Portfolio; INVESTORS MUNICIPAL CASH FUND, on behalf of Investors Florida Municipal Cash Fund, Investors New Jersey Municipal Cash Fund, Investors Michigan Municipal Cash Fund, Investors Pennsylvania Municipal Cash Fund, and Tax-Exempt New York Money Market Portfolio; SCUDDER AGGRESSIVE GROWTH FUND; SCUDDER BLUE CHIP FUND; SCUDDER GROWTH TRUST, on behalf of Scudder Growth Fund, and Scudder Strategic Growth Fund; SCUDDER HIGH INCOME SERIES, on behalf of Scudder High Income Fund (formerly Scudder High Yield Fund); SCUDDER PORTFOLIOS, on behalf of Scudder Cash Reserves Fund; SCUDDER DYNAMIC GROWTH FUND; SCUDDER STATE TAX-FREE INCOME SERIES, on behalf of Scudder CA Tax-Free Income Fund, Scudder FL Tax-Free Income Fund, and Scudder NY Tax-Free Income Fund; JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SCUDDER STRATEGIC INCOME FUND; SCUDDER TECHNOLOGY FUND; SCUDDER TOTAL RETURN FUND; SCUDDER U.S. GOVERNMENT SECURITIES FUND; SCUDDER FOCUS VALUE PLUS GROWTH FUND; TAX-EXEMPT CA MONEY MARKET FUND; SCUDDER MONEY FUNDS, on behalf of Scudder Money Market Fund, Scudder Government Money Fund, and Scudder Tax-Exempt Money Fund; SCUDDER YIELDWISE FUNDS, on behalf of Scudder YieldWise Money Fund, Scudder YieldWise Government Money Fund, and Scudder YieldWise Municipal Money Fund; SCUDDER EQUITY TRUST, on behalf of Scudder-Dreman Financial Services Fund; SCUDDER INVESTORS TRUST, on behalf of Scudder S&P 500 Stock Fund; SCUDDER NEW EUROPE FUND, INC.; SCUDDER TARGET FUND, on behalf of Scudder Target 2010 Fund, Scudder Target 2011 Fund, Scudder Target 2012 Fund, Scudder Target 2013 Fund (formerly Scudder Retirement Fund - Series IV), Scudder Retirement Fund - Series V, Scudder Retirement Fund - Series VI, Scudder Retirement Fund - Series VII, and Scudder Worldwide 2004 Fund; JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SCUDDER VALUE SERIES, INC., on behalf of Scudder Contrarian Fund, Scudder-Dreman High Return Equity Fund, and Scudder-Dreman Small Cap Value Fund; SCUDDER VARIABLE SERIES II, on behalf of Scudder Aggressive Growth Portfolio, Scudder Blue Chip Portfolio, Scudder Contrarian Value Portfolio, Scudder Global Blue Chip Portfolio, Scudder Government Securities Portfolio, Scudder Growth Portfolio, Scudder High Income Portfolio (formerly Scudder High Yield Portfolio), Scudder International Select Equity Portfolio (formerly Scudder International Research Portfolio), Scudder Investment Grade Bond Portfolio, Scudder Money Market Portfolio, Scudder Small Cap Growth Portfolio, Scudder Strategic Income Portfolio, Scudder Technology Growth Portfolio, Scudder Total Return Portfolio, Scudder Focus Value+Growth Portfolio, SVS Index 500 Portfolio, SVS Dreman Financial Services Portfolio, SVS Dreman High Return Equity Portfolio, SVS Dreman Small Cap Value Portfolio, SVS Janus Growth Opportunities Portfolio (formerly SVS Growth Opportunities Portfolio), SVS MFS Strategic Value Portfolio, SVS INVESCO Dynamic Growth Portfolio (formerly SVS Dynamic Growth Portfolio), SVS Turner Mid Cap Growth Portfolio (formerly SVS Mid Cap Growth Portfolio), SVS Oak Strategic Equity Portfolio (formerly SVS Strategic Equity Portfolio), SVS Davis Venture Value Portfolio (formerly SVS Venture Value Portfolio), SVS Eagle Focused Large Cap Growth Portfolio (formerly SVS Focused Large Cap Growth Portfolio), and SVS Janus Growth and Income Portfolio (formerly SVS Growth and Income Portfolio); JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SCUDDER INTERMEDIATE GOVERNMENT TRUST; SCUDDER MUNICIPAL INCOME TRUST; SCUDDER STRATEGIC MUNICIPAL INCOME TRUST; MORGAN GRENFELL INVESTMENT TRUST, on behalf of Fixed Income Fund, Municipal Bond Fund, Short Duration Fund, Short Term Municipal Bond Fund, High Income Plus Fund, Micro Cap Fund, European Equity Fund, International Select Equity Fund, and Emerging Markets Debt Fund; ASSET MANAGEMENT PORTFOLIO; CASH MANAGEMENT PORTFOLIO; EQUITY 500 INDEX PORTFOLIO; INTERNATIONAL EQUITY PORTFOLIO; TREASURY MONEY PORTFOLIO; DEUTSCHE ASSET MANAGEMENT VIT FUNDS, on behalf of Small Cap Index Fund, EAFE Index Fund, and Equity 500 Index Fund; BT INVESTMENT PORTFOLIOS, on behalf of itself of Asset Management Portfolio II, Asset Management Portfolio III, EAFE Equity Index Portfolio, Liquid Assets Portfolio, PreservationPlus Income Portfolio, PreservationPlus Portfolio, and US Bond Index Portfolio; JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE BT INVESTMENT FUNDS, on behalf of Mid Cap Fund, NY Tax Free Money Fund Investment, Small Cap Fund, and Tax Free Money Fund Investment; BT INSTITUTIONAL FUNDS, on behalf of Daily Assets Fund Institutional, and Treasury and Agency Fund Institutional; FLAG INVESTORS COMMUNICATIONS FUND, INC.; FLAG INVESTORS VALUE BUILDER FUND, INC.; FLAG INVESTORS EQUITY PARTNERS FUND, INC.; DEUTSCHE BANK ALEX BROWN CASH RESERVES FUND, INC., on behalf of Prime Series, Treasury Series, and Tax-free Series; SCUDDER GLOBAL HIGH INCOME FUND, INC.; DEUTSCHE INVESTORS FUNDS, INC., on behalf of Global Biotechnology Fund; DEUTSCHE INVESTORS PORTFOLIOS TRUST, on behalf of Top 50 US Portfolio, and Japanese Equity Portfolio; SCUDDER RREEF SECURITIES TRUST, on behalf of Scudder RREEF Real Estate Securities Fund; and SCUDDER RREEF REAL ESTATE FUND, INC. By: /s/ Charles A. Rizzo --------------------- Name: Charles A. Rizzo Title*: Treasurer *(The above-signed officer holds this office with each of the above-referenced funds) JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE STATE STREET BANK AND TRUST CO. By: /s/ John T. Daley --------------------------------- Name: John T. Daley Title: Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE DANSKE BANK NEW YORK BRANCH By: /s/ George Neofitrois --------------------------------- Name: George Neofitrois Title: Vice President By: /s/ John A. O'Neill --------------------------------- Name: John A. O'Neill Title: Assistant General Manager JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE BNP PARIBAS By: /s/ Marguerite L. Lebon --------------------------------- Name: Marguerite L. Lebon Title: Vice President By: /s/ Barry K. Chung --------------------------------- Name: Barry K. Chung Title: Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE CREDIT LYONNAIS NEW YORK BRANCH By: /s/ Sebastian Rocco --------------------------------- Name: Sebastian Rocco Title: Senior Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE FLEET NATIONAL BANK By: /s/ Esteban V. Koosau --------------------------------- Name: Esteban V. Koosau Title: Senior Associate JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE HSBC BANK USA By: /s/ Scott H. Buitekant --------------------------------- Name: Scott H. Buitekant Title: First Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE LLOYDS TSB BANK PLC By: /s/ Michael J. Gilligan --------------------------------- Name: Michael J. Gilligan Title: Director Financial Institutions, USA G311 By: /s/ Matthew S. R. Tuck --------------------------------- Name: Matthew S. R. Tuck Title: Vice President Financial Institutions, USA T020 JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE NATIONAL AUSTRALIA BANK LIMITED By: /s/ Richard G. Reilly --------------------------------- Name: Richard G. Reilly Title: Senior Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE SOCIETE GENERALE By: /s/ Edith L. Hornick --------------------------------- Name: Edith L. Hornick Title: Director JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE THE ROYAL BANK OF SCOTLAND PLC By: /s/ Diane Ferguson --------------------------------- Name: Diane Ferguson Title: Senior Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE BANK OF MONTREAL By: /s/ Joseph W. Linder --------------------------------- Name: Title: JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE CITIBANK, N.A. By: /s/ Yoko Otani --------------------------------- Name: Yoko Otani Title: Managing Director JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE UBS AG, STAMFORD BRANCH By: /s/ Wilfred V. Saint --------------------------------- Name: Wilfred V. Saint Title: Associate Director Banking Products Services, US By: /s/ Anthony N. Joseph --------------------------------- Name: Anthony N. Joseph Title: Associate Director Banking Products Services, US JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE ABN AMRO BANK N.V. By: /s/ Bryan Manning --------------------------------- Name: Bryan Manning Title: Group Vice President By: /s/ Sandra R. Bolek --------------------------------- Name: Sandra R. Bolek Title: Assistant Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE MELLON FINANCIAL CORPORATION By: /s/ Bart A. Rauluk --------------------------------- Name: Bart A. Rauluk Title: Vice President & Manager JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH By: /s/ Stephen K. Hunter --------------------------------- Name: Stephen K. Hunter Title: Senior Vice President By: /s/ Jan de Jonge --------------------------------- Name: Jan de Jonge Title: Vice President JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE WESTLB AG, NEW YORK BRANCH By: /s/ Roland Chalons-Browne --------------------------------- Name: Roland Chalons-Browne Title: Senior Executive & Managing Director By: /s/ David J. Sellers --------------------------------- Name: David J. Sellers Title: Director JPMORGAN CHASE/DEUTSCHE IMA APRIL 2003 TRR SIGNATURE PAGE BROWN BROTHERS HARRIMAN & CO. By: /s/ Susan C. Livingston --------------------------------- Name: Susan C. Livingston Title: Partner SCHEDULE I
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER CASH INVESTMENT TRUST ........................................ 300% 0.82% SCUDDER FUNDS TRUST Scudder Short Term Bond Fund ...................................... 300% 0.95% SCUDDER INCOME TRUST Scudder GNMA Fund ................................................. 300% 3.64% INVESTMENT TRUST Scudder Growth and Income Fund .................................... 300% 3.61% Scudder Large Company Growth Fund ................................. 300% 0.39% Scudder Small Company Stock Fund .................................. 300% 0.06% Scudder Capital Growth Fund ....................................... 300% 0.89% SCUDDER PORTFOLIO TRUST Scudder Income Fund ............................................... 300% 0.88% Scudder Balanced Fund ............................................. 300% 0.53% SCUDDER MUTUAL FUNDS INC Scudder Gold and Precious Metals Fund ............................. D 400% 0.14% SCUDDER U.S. TREASURY MONEY FUND ..................................... 300% 0.27% SCUDDER SECURITIES TRUST Scudder Development Fund .......................................... 300% 0.17% Scudder Health Care Fund .......................................... 300% 0.13% Scudder Technology Innovation Fund ................................ 300% 0.13% Scudder Small Company Value Fund .................................. 300% 0.17% Scudder 21st Century Growth Fund .................................. 300% 0.12% SCUDDER TAX FREE MONEY FUND .......................................... 300% 0.24% SCUDDER MONEY MARKET TRUST Scudder Money Market Series ....................................... 300% 7.81%
- ------------- * Each Designated Borrower is indicated by a "D" followed by the Designated Borrower Asset Coverage Ratio I-1
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER PATHWAY SERIES Pathway Moderate Portfolio ........................................ 500% 0.15% Pathway Conservative Portfolio .................................... 500% 0.08% Pathway Growth Portfolio .......................................... 500% 0.13% SCUDDER VARIABLE SERIES I Balanced Portfolio ................................................ 300% 0.10% Bond Portfolio .................................................... 300% 0.14% Capital Growth Portfolio .......................................... 300% 0.44% Global Discovery Portfolio ........................................ 300% 0.10% Growth and Income Portfolio ....................................... 300% 0.11% International Portfolio ........................................... 300% 0.32% Money Market Portfolio ............................................ 300% 0.08% 21st Century Growth Portfolio ..................................... 300% 0.03% Health Sciences Portfolio ......................................... 300% 0.06% SCUDDER MUNICIPAL TRUST Scudder Managed Municipal Bonds ................................... 300% 4.05% Scudder High Yield Tax Free Fund .................................. 300% 0.64% GLOBAL/INTERNATIONAL FUND, INC Scudder Emerging Markets Income Fund .............................. D 400% 0.12% Scudder Global Fund .............................................. 300% 0.61% Scudder Global Bond Fund .......................................... 300% 0.16% Scudder Global Discovery Fund .................................... 300% 0.28% SCUDDER STATE TAX FREE TRUST Scudder Massachusetts Tax Free Fund ............................... 300% 0.46% SCUDDER TAX FREE TRUST Scudder Medium Term Tax Free Fund ................................. 300% 0.53% VALUE EQUITY TRUST Scudder Large Company Value Fund .................................. 300% 1.22% Scudder Select 500 Fund ........................................... 300% 0.04%
I-2
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER INTERNATIONAL FUND, INC Scudder Emerging Markets Growth Fund .............................. D 400% 0.04% Scudder Greater Europe Growth Fund ................................ 300% 0.29% Scudder International Fund ........................................ 300% 1.37% Scudder Latin America Fund ........................................ D 400% 0.19% Scudder Pacific Opportunities Fund ................................ D 400% 0.06% THE BRAZIL FUND, INC ................................................. D 2000% 0.17% THE KOREA FUND, INC .................................................. D 2000% 0.62% SCUDDER NEW ASIA FUND, INC ........................................... D 2000% 0.07% CASH ACCOUNT TRUST Money Market Portfolio ............................................ 300% 2.78% Government Securities Portfolio ................................... 300% 1.44% Tax-Exempt Portfolio .............................................. 300% 0.60% CASH EQUIVALENT FUND Money Market Portfolio ............................................ 300% 0.60% Government Securities Portfolio ................................... 300% 0.36% Tax-Exempt Portfolio .............................................. 300% 0.18% INVESTORS CASH TRUST Government Securities Portfolio ................................... 300% 0.39% Treasury Portfolio ................................................ 300% 0.06% INVESTORS MUNICIPAL CASH FUND Investors Florida Municipal Cash Fund ............................. 300% 0.02% Investors New Jersey Municipal Cash Fund .......................... 300% 0.03% Investors Michigan Municipal Cash Fund ............................ 300% 0.01% Investors Pennsylvania Municipal Cash Fund ........................ 300% 0.01% Tax-Exempt New York Money Market Portfolio ........................ 300% 0.04% SCUDDER AGGRESSIVE GROWTH FUND ....................................... 300% 0.10% SCUDDER BLUE CHIP FUND ............................................... 300% 0.40%
I-3
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER GROWTH TRUST Scudder Growth Fund ............................................... 300% 0.74% Scudder Strategic Growth Fund ..................................... 300% 0.00% SCUDDER HIGH INCOME SERIES Scudder High Income Fund .......................................... 300% 2.05% SCUDDER PORTFOLIOS Scudder Cash Reserves Fund ........................................ 300% 0.35% SCUDDER DYNAMIC GROWTH FUND .......................................... 300% 0.18% SCUDDER STATE TAX-FREE INCOME SERIES Scudder CA Tax-Free Income Fund ................................... 300% 0.89% Scudder FL Tax-Free Income Fund ................................... 300% 0.06% Scudder NY Tax-Free Income Fund ................................... 300% 0.33% SCUDDER STRATEGIC INCOME FUND ........................................ 300% 0.34% SCUDDER TECHNOLOGY FUND .............................................. D 1000% 1.00% SCUDDER TOTAL RETURN FUND ............................................ 300% 1.62% SCUDDER U.S. GOVERNMENT SECURITIES FUND .............................. 300% 3.34% SCUDDER FOCUS VALUE PLUS GROWTH FUND ................................. 300% 0.06% TAX-EXEMPT CA MONEY MARKET FUND ...................................... 300% 0.06% SCUDDER MONEY FUNDS Scudder Money Market Fund ......................................... 300% 3.63% Scudder Government Money Fund ..................................... 300% 0.46% Scudder Tax-Exempt Money Fund ..................................... 300% 0.56% SCUDDER YIELDWISE FUNDS Scudder YieldWise Money Fund ...................................... 300% 0.47% Scudder YieldWise Government Money Fund ........................... 300% 0.16% Scudder YieldWise Municipal Money Fund ............................ 300% 0.27%
I-4
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER EQUITY TRUST Scudder-Dreman Financial Services Fund ............................ 300% 0.10% SCUDDER INVESTORS TRUST Scudder S&P 500 Stock Fund ........................................ 300% 0.06% SCUDDER NEW EUROPE FUND, INC ......................................... 300% 0.09% SCUDDER TARGET FUND Scudder Target 2010 Fund .......................................... 300% 0.06% Scudder Target 2011 Fund .......................................... 300% 0.09% Scudder Target 2012 Fund .......................................... 300% 0.07% Scudder Target 2013 Fund (formerly Scudder Retirement Fund - Series IV) ...................................................... 300% 0.05% Scudder Retirement Fund - Series V ................................ 300% 0.06% Scudder Retirement Fund - Series VI ............................... 300% 0.04% Scudder Retirement Fund - Series VII .............................. 300% 0.03% Scudder Worldwide 2004 Fund ....................................... 300% 0.01% SCUDDER VALUE SERIES, INC Scudder Contrarian Fund ........................................... 300% 0.14% Scudder-Dreman High Return Equity Fund ............................ 300% 2.89% Scudder-Dreman Small Cap Value Fund ............................... 300% 0.32%
I-5
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- SCUDDER VARIABLE SERIES II Scudder Aggressive Growth Portfolio ............................... 300% 0.04% Scudder Blue Chip Portfolio ....................................... 300% 0.13% Scudder Contrarian Value Portfolio ................................ 300% 0.17% Scudder Global Blue Chip Portfolio ................................ 300% 0.03% Scudder Government Securities Portfolio ........................... 300% 0.47% Scudder Growth Portfolio .......................................... 300% 0.19% Scudder High Income Portfolio ..................................... 300% 0.28% Scudder International Select Equity Portfolio ..................... 300% 0.09% Scudder Investment Grade Bond Portfolio ........................... 300% 0.19% Scudder Money Market Portfolio .................................... 300% 0.46% Scudder Small Cap Growth Portfolio ................................ 300% 0.12% Scudder Strategic Income Portfolio ................................ 300% 0.06% Scudder Technology Growth Portfolio ............................... D 2000% 0.14% Scudder Total Return Portfolio .................................... 300% 0.51% Scudder Focus Value+Growth Portfolio .............................. 300% 0.08% SVS Index 500 Portfolio ........................................... 300% 0.18% SVS Dreman Financial Services Portfolio ........................... 300% 0.09% SVS Dreman High Return Equity Portfolio ........................... 300% 0.40% SVS Dreman Small Cap Value Portfolio .............................. 300% 0.19% SVS Janus Growth Opportunities Portfolio .......................... 300% 0.09% SVS MFS Strategic Value Portfolio ................................. 300% 0.01% SVS INVESCO Dynamic Growth Portfolio .............................. 300% 0.02% SVS Turner Mid Cap Growth Portfolio ............................... 300% 0.05% SVS Oak Strategic Equity Portfolio ................................ 300% 0.03% SVS Davis Venture Value Portfolio ................................. 300% 0.13% SVS Eagle Focused Large Cap Growth Portfolio ...................... 300% 0.05% SVS Janus Growth and Income Portfolio ............................. 300% 0.13% SCUDDER INTERMEDIATE GOVERNMENT TRUST ................................ 300% 0.21% SCUDDER MUNICIPAL INCOME TRUST ....................................... 300% 0.62% SCUDDER STRATEGIC MUNICIPAL INCOME TRUST ............................. 300% 0.17%
I-6
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- MORGAN GRENFELL INVESTMENT TRUST Fixed Income Fund ................................................. D 1000% 0.86% Municipal Bond Fund ............................................... D 1000% 0.38% Short Duration Fund ............................................... 300% 0.19% Short Term Municipal Bond Fund .................................... 300% 0.43% High Income Plus Fund ............................................. 300% 0.34% Micro Cap Fund .................................................... 300% 0.06% European Equity Fund .............................................. 300% 0.01% International Select Equity Fund .................................. 300% 0.45% Emerging Markets Debt Fund ........................................ D 1000% 0.09% ASSET MANAGEMENT PORTFOLIO ........................................... 300% 0.51% CASH MANAGEMENT PORTFOLIO ............................................ D 2000% 8.34% EQUITY 500 INDEX PORTFOLIO ........................................... 300% 1.91% INTERNATIONAL EQUITY PORTFOLIO ....................................... 300% 0.44% TREASURY MONEY PORTFOLIO ............................................. D 2000% 0.63% DEUTSCHE ASSET MANAGEMENT VIT FUNDS Small Cap Index Fund .............................................. 300% 0.11% EAFE Index Fund ................................................... 300% 0.05% Equity 500 Index Fund ............................................. 300% 0.32% BT INVESTMENT PORTFOLIOS Asset Management Portfolio II ..................................... 300% 0.05% Asset Management Portfolio III .................................... 300% 0.02% EAFE Equity Index Portfolio ....................................... 300% 0.10% Liquid Assets Portfolio ........................................... D 2000% 2.15% PreservationPlus Income Portfolio ................................. 300% 1.50% PreservationPlus Portfolio ........................................ 300% 0.13% US Bond Index Portfolio ........................................... 300% 0.10% BT INVESTMENT FUNDS Mid Cap Fund ...................................................... 300% 0.25% NY Tax Free Money Fund Investment ................................. D 2000% 0.10% Small Cap Fund .................................................... 300% 0.17% Tax Free Money Fund Investment .................................... D 2000% 0.13%
I-7
DESIGNATED BORROWERS* & BORROWER ASSET BORROWER NAME COVERAGE RATIO ALLOCATION - ------------- -------------- ---------- BT INSTITUTIONAL FUNDS Daily Assets Fund Institutional ................................... D 1000% 7.66% Treasury and Agency Fund Institutional ............................ 300% 0.26% FLAG INVESTORS COMMUNICATIONS FUND, INC .............................. D 1000% 0.30% FLAG INVESTORS VALUE BUILDER FUND, INC ............................... D 1000% 0.45% FLAG INVESTORS EQUITY PARTNERS FUND, INC ............................. D 1000% 0.19% DEUTSCHE BANK ALEX BROWN CASH RESERVES FUND, INC ..................... Prime Series ...................................................... D 1000% 2.97% Treasury Series ................................................... D 1000% 0.46% Tax-free Series ................................................... D 1000% 0.83% SCUDDER GLOBAL HIGH INCOME FUND, INC ................................. 300% 0.06% DEUTSCHE INVESTORS FUNDS, INC ........................................ Global Biotechnology Fund ........................................ 300% 0.01% DEUTSCHE INVESTORS PORTFOLIOS TRUST Top 50 US Portfolio ............................................... 300% 0.02% Japanese Equity Portfolio ......................................... 300% 0.03% SCUDDER RREEF SECURITIES TRUST RREEF Real Estate Securities Fund ................................ 300% 0.21% SCUDDER RREEF REAL ESTATE FUND, INC .................................. 300% 0.19%
I-8 SCHEDULE II COMMITMENTS, ADDRESSES, ETC.
AMOUNT OF AMOUNT OF SWING NAME AND ADDRESS OF LENDER COMMITMENT LINE COMMITMENT - -------------------------- ---------- --------------- JPMORGAN CHASE BANK $100,000,000 $ 0 270 Park Avenue, 15th Floor New York, New York 10017 Attn: Marybeth Mullen Tel: 212-270-5049 Fax: 212-270-0670 Email: marybeth.mullen@jpmorgan.com STATE STREET BANK AND TRUST CO. $125,000,000 $125,000,000 Lafayette Corporate Center Boston, MA 02211 Attn: John T. Daley Tel: 617-662-2312 Fax: 617-662-2325 Email: jtdaley@statestreet.com DANSKE BANK NEW YORK BRANCH $ 90,000,000 $ 0 299 Park Avenue, 14th Floor New York, NY 10171 Attn: George Neofitidis Tel: 212-984-8439 Fax: 212-984-9568 Email: gne@us.danskebank.com BNP PARIBAS $ 70,000,000 $ 0 787 Seventh Avenue New York, NY 10019 Attn: Barry K. Chung Tel: 212-841-2989 Fax: 212-841-2533 Email: barry.chung@americas.bnpparibas.com CREDIT LYONNAIS NEW YORK BRANCH $ 70,000,000 $ 0 1301 Avenue of The Americas New York, NY 10019-6022 Attn: Sebastian Rocco Tel: 212-261-7360 Fax: 212-261-3438 Email: rocco@clamericas.com
II-1
AMOUNT OF AMOUNT OF SWING NAME AND ADDRESS OF LENDER COMMITMENT LINE COMMITMENT - -------------------------- ---------- --------------- FLEET NATIONAL BANK $ 70,000,000 $ 0 100 Federal Street Boston, MA 02110 Attn: Lawrence C. Bigelow Tel: 617-434-8868 Fax: 617-434-1096 Email: lcbigelow@bkb.com HSBC BANK USA $ 70,000,000 $ 0 452 Fifth Avenue, Fifth Floor New York, NY 10017 Attn: Scott H. Buitekant Tel: 212-525-2571 Fax: 212-525-2479 Email: scott.h.buitekant@us.hsbc.com LLOYDS TSB BANK PLC $ 70,000,000 $ 0 1251 Avenue of The Americas, 39th Floor New York, NY 10020 Attn: Michael J. Gilligan Tel: 212-930-8911 Fax: 212-930-5098 Email: mgilligan@lloydstsb-usa.com NATIONAL AUSTRALIA BANK LIMITED $70,000,000 $ 0 200 Park Avenue, 34th Floor New York, NY 10166 Attn: Richard G. Reilly Tel: 212-916-9620 Fax: 212-986-5252 Email: rreilly@nabny.com SOCIETE GENERALE $ 70,000,000 $ 0 1221 6th Ave, 11th Floor New York, NY 10020 Attn: Shane Klein Tel: 212-278-6889 Fax: 212-278-7569 Email: shane.klein@us.socgen.com
II-2
AMOUNT OF AMOUNT OF SWING NAME AND ADDRESS OF LENDER COMMITMENT LINE COMMITMENT - -------------------------- ---------- --------------- THE ROYAL BANK OF SCOTLAND PLC $ 70,000,000 $ 0 101 Park Avenue New York, NY 10178 Attn: Diane Ferguson Tel: 212-401-3737 Fax: 212-401-3456 Email: diane.ferguson@rbos.com BANK OF MONTREAL $ 50,000,000 $ 0 115 South LaSalle Street, 12th Floor Chicago, IL 60603 Attn: Joseph W. Linder Tel: 312-750-3784 Fax: 312-750-6057 Email: joseph.linder@bmo.com CITIBANK, N.A. $ 50,000,000 $ 0 388 Greenwich Street, 22nd Floor New York, NY 10013 Attn: Yoko Otani Tel: 212-816-3885 Fax: 212-793-5904 Email: yoko.otani@citigroup.com UBS AG, STAMFORD BRANCH $ 50,000,000 $ 0 677 Washington Boulevard Stamford, CT 06901 Attn: Wilfred V. Saint Tel: 203-719-4330 Fax: 203-719-3092 Email: wilfred.saint@ubsw.com ABN AMRO BANK N.V. $ 50,000,000 $ 0 181 West Madison Street Chicago, IL 60602 Attn: Bryan Manning Tel: 312-904-5035 Fax: 312-904-4563 Email: bryan.manning@abnamro.com
II-3
AMOUNT OF AMOUNT OF SWING NAME AND ADDRESS OF LENDER COMMITMENT LINE COMMITMENT - -------------------------- ---------- --------------- MELLON FINANCIAL CORPORATION $ 50,000,000 $ 0 One Mellon Center 500 Grant Street Pittsburgh, PA 15258-0001 Attn: Bart A. Rauluk Tel: 412-234-4371 Fax: 412-236-2650 Email: rauluk.ba@mellon.com NORDDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH $ 50,000,000 $ 0 1114 Avenue of the Americas New York, NY 10036 Attn: Georg L. Peters Tel: 212-812-6993 Fax: 212-812-6860 Email: georg.peters@nordlb.com WESTLB AG, NEW YORK BRANCH $ 50,000,000 $ 0 1211 Avenue of The Americas New York, NY 10036 Attn: Terence R. Law Tel: 212-852-6242 Fax: 212-852-6156 Email: terence_law@westlb.com BROWN BROTHERS HARRIMAN & CO. $ 25,000,000 $ 0 40 Water Street Boston, MA 02109-3661 Attn: Carolyn M. Bianchi Tel: 617-772-1376 Fax: 617-772-2263 Email: carolyn.bianchi@bbh.com
II-4 SCHEDULE IV CUSTODY AGREEMENTS EX-99.D 11 y93395taexv99wd.txt AMENDMENT TO THE LICENSE Exhibit (d) [Translation] MINISTRY OF FINANCE AND ECONOMY Document No.: Jeungje 41296-156 Enforcement Date: July 2, 1998 To: Chang Bok Hur Law Offices of Shin & Kim Re: Amendment to the License, Approval and Confirmation of The Korea Fund, Inc. 1. Reference is made to your letter, Sejong No. 98-0859 (dated July 2, 1998). 2. Pursuant to Article 203 of the Securities and Exchange Act and Article 10-66 of the Foreign Exchange Management Regulations, we hereby approve the investment in Korean securities by The Korea Fund, Inc. as set forth in the attached. Attachment: A copy of the "Amendment to the License, Approval and Confirmation of The Korea Fund, Inc." MINISTER OF FINANCE AND ECONOMY (official seal affixed) To: The Korea Fund, Inc. We understand that a United States investment company is organized under the name of The Korea Fund, Inc. (the "Fund"), as a corporation organized under the laws of the State of Maryland. The Minister of Finance and Economy (the "MOFE"), on behalf of the Government of the Republic of Korea (the "Government"), pursuant to Korean law presently in force, hereby grants by this License, Approval and Confirmation the following licenses and approvals (which shall be irrevocable except in the case of noncompliance with one or more of the conditions contained in Paragraph 3 below, or in the case of a material violation by the Fund of relevant laws), and hereby provides the following confirmations to the Fund. The licenses and approvals described in this License, Approvals and Confirmation (which supersedes the License, Approvals and Confirmation granted to the Fund on June 22, 1984, as amended prior to the date hereof) are the only ones known to the MOFE to be required under Korean law presently in force in connection with the operation of the Fund, and no approval or consent will be required for the capital increase of the Fund in the future. 1. Licenses, Approval and Confirmation as to the Fund's Investments in Korea and Repatriation of Funds. A. Investments Subject to compliance by the Fund with all applicable Korean laws and regulations including, but without limitation, the Securities and Exchange Laws and Regulations (the "SEL") and the Foreign Exchange Management Laws and Regulations (the "FEML"), the MOFE hereby grants this license and approval permitting the Fund to make investments in securities as defined in the Securities and Exchange Act (whether listed or not), without any need for any further filing with or approval from any government agency and without being subject to any investment ceilings. This permission extends to the capital, proceeds from the sale of the Fund shares under the Dividend Reinvestment and Cash Purchase Plan, and all cash flow from the operations of the Fund, including dividends and interests from portfolio investments and proceeds from the sale of portfolio investments. The MOFE hereby confirms, in addition to the matters set forth in the preceding paragraph, that the Fund may invest in all securities and money market instruments which are permitted to be invested in by foreigners in accordance with all applicable Korean laws presently in force or to be effective in the future, including, but without limitation, the SEL and FEML. The matters otherwise permitted by laws applicable to foreign investments or by the regulations of the Financial Supervisory Committee (the "FSC") will be applied to the Fund on the same conditions applicable to other foreigners. The Fund may purchase shares in initial public offerings on the same basis as Korean domestic institutional investors. B. Repatriation of Funds by the Fund The Fund may, subject to an authorization in accordance with the customary procedure under the FEML, repatriate to overseas in foreign currency (1) income of the Fund from whatever source (including, without limitation, dividends and interest and all realized capital gains) and (2) the investment principal up to 10% of the net asset value (taken at current value) of the Fund (except upon termination of the Fund, or as may be required to pay Fund expenses in excess of Fund income, in which case the foregoing restriction shall not apply). The respective amounts of income, realized capital gains, expenses, net asset value and investment principal shall be determined in accordance with United States generally accepted accounting principles, a copy of which shall be submitted to the designated foreign exchange bank. 2. Confirmation with respect to Taxation The MOFE makes the confirmations hereinafter with respect to taxation solely on the basis of Korean law, including the relevant tax treaty, presently in force. The results described below may be changed if there is a change in the relevant provisions of Korean law, including the relevant tax treaty, or if the United States or the Republic of Korea should adopt any measure which would affect interpretation and application of the provisions of the Convention Between the United States of America and the Republic of Korea for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and the Encouragement of International Trade and Investment (the "U.S.-Korea Tax Treaty"). A. Withholding Tax on Dividends and Interest Payments to the Fund The applicable Korean withholding tax rate on the dividends and interest paid to the Fund will be determined by the U.S.-Korea Tax Treaty. Because the Fund's only office is in the United States and all investment decisions are made in the United States by the manager, the Fund will not be deemed to have a permanent establishment in Korea for the purpose of Korean law and the U.S.-Korea Tax Treaty as a result of its Operations (including the retention of any Korean adviser, the use of one or more Korean financial institutions as custodians or subcustodians, and the Fund's trading in stocks and other securities of Korean issuers). B. Inheritance and Gift Tax The Korean Inheritance and Gift Tax will not apply unless at the time of any testate, intestate or inter vivos transfer of the shares of the Fund, the deceased or the donees, as the case may be, is an individual domiciled in Korea. C. Stamp Duty Korean stamp duty will not apply to issuance or transfer or shares of the Fund nor to the Fund's portfolio securities transactions, unless a separate document is executed in Korea in connection with such transaction. D. Securities Transaction Tax Under Korean laws presently in force, the Korean securities transaction tax will not apply to the sale of portfolio securities by the Fund. E. Capital Gains Tax No capital gains tax will be payable by the Fund on the sale of its portfolio securities, so long as the Fund satisfied the requirements for exemption set forth in Article of the U.S.-Korea Tax Treaty. F. Income and Corporation Tax Except for the withholding tax described in Paragraph A, the Fund will not be subject to income tax or corporation tax with respect to dividends and interest paid to the Fund by Korean issuers and gains realized by the Fund on the sale of its portfolio securities, so long as the Fund meets the requirements for such exemptions set forth in Articles 8, 12 and 13 of the U.S. - - Korea Tax Treaty. 3. Conditions of the Licenses and Approvals The licenses and approvals granted hereby (collectively, the "Licenses") are subject to each of the following conditions. A. An approval of the MOFE is required before the Fund shall appoint a manager (the "Manager") or a Korean adviser (the "Korean Adviser") or terminate the services of the Manager or the Korean Adviser. The MOFE will not unreasonably withhold such approvals. B. An approval of the MOFE is required before the Fund can become an open-end, rather than a closed-end, investment company or before the Fund could change its stated objective from that of seeking long-term capital appreciation through investment in securities, primarily equity securities, of Korean companies, or its investment policy from that of normally (except in the circumstances expressly stated in the prospectus) investing at least 80 percent of its net assets in Korean securities. C. Investment for the Purpose of Exercising Control The Fund shall not make investments for the purpose of exercising control or management of the issuer. D. Compliance with Requests for Further Information The Fund shall furnish, and shall use its best efforts to cause the Fund's manager, custodian and subcustodian to furnish, to the MOFE or the FSC any documents or other information reasonably requested in writing by the MOFE or the FSC as to the operations of the Fund or to confirm whether the Fund has complied with the conditions of this Paragraph and has complied with the relevant laws and regulations. E. Temporary Borrowing The Fund may temporarily borrow money up to 20 percent of its net assets. -----END PRIVACY-ENHANCED MESSAGE-----