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EXHIBIT (b)
AGREEMENT
This will confirm the agreement between The New South Africa Fund, Inc.
(the "Fund") and Custodial Trust Company ("CTC") pursuant to Section 5.5 of the
Custody Agreement, dated as of March 4, 1994, between the Fund and CTC (the
"Custody Agreement"), as follows:
(1) CTC will make a clearing loan to the Fund on or about August 7,
1998, in the principal amount of $6.8 million (the "Loan"), to facilitate
the settlement of the shares of the Fund purchased by the Fund in its
recently completed self-tender,
(2) the making of the Loan is subject to the absence of any material
adverse change, as determined by CTC in its sole and absolute discretion,
in the condition, financial or otherwise, of the Fund or the securities
markets in the United States or South Africa,
(3) the Loan, which is expected to be repaid on or about August 14,
1998, is repayable on demand made by CTC at any time before, on or after
such date,
(4) the Loan shall bear interest at a fluctuating rate per annum at
all times equal to the Federal Funds Rate in effect from time to time plus
1.50 percent (150 basis points), with each change in such fluctuating
interest rate to take effect simultaneously with the corresponding change
in the Federal Funds Rate and with such interest payable to CTC on the last
day of each calendar month the Loan is outstanding and on the day the Loan
is repaid to CTC ("Federal Funds Rate" means the rate for U.S. dollar funds
settled through the Federal Reserve System or other immediately available
U.S. dollar funds, as quoted by an independent broker of such funds,
selected by CTC in its sole and absolute discretion, rounded up or down, at
Bank's discretion, to the nearest whole multiple of one-eighth of one
percent),
(5) as provided in Section 9.3 of the Custody Agreement, the Loan
shall be fully secured by all the assets of the Fund in the custody account
maintained under the Custody Agreement,
(6) the Loan shall also be secured by the shares of the Fund whose
purchase is funded with the proceeds of the Loan, and the Fund shall keep
such shares on deposit with CTC and not cancel them until such time as the
Loan is repaid in full, and
(7) this agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to the
conflict of law principles thereof.
Dated: ▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ FUND INC.
By:
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Name:
Title:
CUSTODIAL TRUST COMPANY
By:
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Name:
Title:
