As filed with the Securities and Exchange Commission on November 17, 1997
File No. 811-08491
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ X ]
RUSSIA AND EASTERN EUROPE PORTFOLIO
(Exact name of Registrant as Specified in Charter)
c/o IBT Trust Company (Cayman) Ltd.
The Bank of Nova Scotia Building
P. O. Box 501, George Town, Grand Cayman
Cayman Islands, British West Indies
(Address of Principal Executive Offices)
(809) 949-2001
(Registrant's Telephone Number, including Area Code)
Alan R. Dynner
24 Federal Street, Boston, Massachusetts 02110
(Name and Address of Agent for Service)
<PAGE>
Throughout this Registration Statement, information concerning Russia and
Eastern Europe Portfolio (the "Portfolio") is incorporated by reference from
Amendment No. 48 to the Registration Statement of Eaton Vance Special Investment
Trust (File No. 2-27962 under the Securities Act of 1933 (the "1933 Act")) (the
"Amendment"), which was filed electronically with the Securities and Exchange
Commission on October 10, 1997 (Accession No. 0000950156-97-000868). The
Amendment contains the prospectus and statement of additional information
("SAI") of Eaton Vance Russia and Eastern Europe Fund (the "Feeder Fund"), which
will invest substantially all of its assets in the Portfolio.
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
Paragraph 4 of Instruction F of the General Instructions to Form N-1A.
ITEM 4. GENERAL DESCRIPTION OF REGISTRANT
The Portfolio is a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on
October 17, 1997. Interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may be
made only by U.S. and foreign investment companies, common or commingled trust
funds, organizations or trusts described in Section 401(a) or 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), or similar organizations
or entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. This Registration Statement does not constitute an offer to
sell, or the solicitation of an offer to buy, any "security" within the meaning
of the 1933 Act.
The Portfolio is intended for long-term investors and is not intended to be
a complete investment program, and a prospective investor should take into
account its objectives and other investments when considering the purchase of an
interest in the Portfolio. The Portfolio cannot assure achievement of its
investment objective.
Registrant incorporates by reference information concerning the Portfolio's
investment objective and investment practices from "The Fund's Investment
Objective", "Russia and the Eastern Europe Region" and "Investment Policies and
Risks" in the Feeder Fund prospectus.
ITEM 5. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference information concerning the Portfolio's
management from "Management of the Fund and the Portfolio" in the Feeder Fund
prospectus.
ITEM 6. CAPITAL STOCK AND OTHER SECURITIES
Registrant incorporates by reference information concerning interests in
the Portfolio from "Organization of the Fund and the Portfolio" in the Feeder
Fund prospectus and "Other Information" of the Feeder Fund SAI. An interest in
the Portfolio has no preemptive or conversion rights and is fully paid and
nonassessable by the Portfolio, except as described under "Organization of the
Fund and the Portfolio" in the Feeder Fund prospectus.
As of October 17, 1997, Boston Management and Research controlled the
Portfolio by virtue of owning approximately 99.9% of the outstanding voting
interests in the Portfolio.
<PAGE>
The net asset value of the Portfolio is determined each day on which the
New York Stock Exchange (the "Exchange") is open for trading ("Portfolio
Business Day"). This determination is made each Portfolio Business Day as of the
close of regular trading on the Exchange (currently 4:00 p.m., New York time)
(the "Portfolio Valuation Time").
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Portfolio Business Day as of the Portfolio Valuation Time. The
value of each investor's interest in the Portfolio will be determined by
multiplying the net asset value of the Portfolio by the percentage, determined
on the prior Portfolio Business Day, which represents that investor's share of
the aggregate interests in the Portfolio on such prior day. Any additions or
withdrawals for the current Portfolio Business Day will then be recorded. Each
investor's percentage of the aggregate interests in the Portfolio will then be
recomputed as a percentage equal to a fraction (i) the numerator of which is the
value of such investor's investment in the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of any additions to or withdrawals from the investor's
investment in the Portfolio on the current Portfolio Business Day and (ii) the
denominator of which is the aggregate net asset value of the Portfolio as of the
Portfolio Valuation Time on the prior Portfolio Business Day plus or minus, as
the case may be, the amount of the net additions to or withdrawals from the
aggregate investment in the Portfolio on the current Portfolio Business Day by
all investors in the Portfolio. The percentage so determined will then be
applied to determine the value of the investor's interest in the Portfolio for
the current Portfolio Business Day.
Registrant incorporates by reference information concerning the tax
consequences of certain of the Portfolio's investment practices from
"Distributions and Taxes" in the Feeder Fund prospectus.
The Portfolio will allocate at least annually among its investors its net
investment income, net realized capital gains, and any other items of income,
gain, loss, deduction or credit. The Portfolio's net investment income consists
of all income accrued on the Portfolio's assets, less all actual and accrued
expenses of the Portfolio, determined in accordance with generally accepted
accounting principles.
Under the anticipated method of operation of the Portfolio, the Portfolio
will not be subject to any federal income tax. (See Part B, Item 20.) However,
each investor in the Portfolio will take into account its allocable share of the
Portfolio's ordinary income and capital gain in determining its federal income
tax liability. The determination of each such share will be made in accordance
with the governing instruments of the Portfolio, which are intended to comply
with the requirements of the Code and the regulations promulgated thereunder.
It is intended that the Portfolio's assets and income will be managed in
such a way that an investor in the Portfolio which seeks to qualify as a
regulated investment company ("RIC") under the Code will be able to satisfy the
requirements for such qualification.
ITEM 7. PURCHASE OF INTERESTS IN THE PORTFOLIO
Interests in the Portfolio are issued solely in private placement
transactions that do not involve any "public offering" within the meaning of
Section 4(2) of the 1933 Act. See "General Description of Registrant" above.
<PAGE>
Registrant incorporates by reference information concerning the computation
of net asset value and valuation of Portfolio assets from "Valuing Shares" in
the Feeder Fund prospectus. For further information, see Item 19 of Part B.
There is no minimum initial or subsequent investment in the Portfolio. The
Portfolio reserves the right to cease accepting investments at any time or to
reject any investment order.
The placement agent for the Portfolio is Eaton Vance Distributors, Inc.
("EVD"), a wholly-owned subsidiary of Eaton Vance Management. The principal
business address of EVD is 24 Federal Street, Boston, Massachusetts 02110. EVD
receives no compensation for serving as the placement agent for the Portfolio.
ITEM 8. REDEMPTION OR DECREASE OF INTEREST
An investor in the Portfolio may withdraw all of (redeem) or any portion of
(decrease) its interest in the Portfolio if a withdrawal request in proper form
is furnished by the investor to the Portfolio. All withdrawals will be effected
as of the next Portfolio Valuation Time. The proceeds of a withdrawal will be
paid by the Portfolio normally on the Portfolio Business Day the withdrawal is
effected, but in any event within seven days. The Portfolio reserves the right
to pay the proceeds of a withdrawal (whether a redemption or decrease) by a
distribution in kind of portfolio securities (instead of cash). The securities
so distributed would be valued at the same amount as that assigned to them in
calculating the net asset value for the interest (whether complete or partial)
being withdrawn. If an investor received a distribution in kind upon such
withdrawal, the investor could incur brokerage and other charges in converting
the securities to cash.
Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any withdrawal
may be suspended or the payment of the withdrawal proceeds postponed during any
period in which the Exchange is closed (other than weekends or holidays) or
trading on the Exchange is restricted or, to the extent otherwise permitted by
the Investment Company Act of 1940, as amended (the "1940 Act"), if an emergency
exists, or during any other period permitted by order of the Securities and
Exchange Commission (the "Commission") for the protection of investors.
ITEM 9. PENDING LEGAL PROCEEDINGS
Not applicable.
<PAGE>
PART B
ITEM 10. COVER PAGE
Not applicable.
ITEM 11. TABLE OF CONTENTS
Page
General Information and History ..................................B-1
Investment Objectives and Policies ...............................B-1
Management of the Portfolio ......................................B-1
Control Persons and Principal Holder of Securities ...............B-2
Investment Advisory and Other Services ...........................B-2
Brokerage Allocation and Other Practices..........................B-2
Capital Stock and Other Securities ...............................B-2
Purchase, Redemption and Pricing of Securities....................B-4
Tax Status........................................................B-4
Underwriters......................................................B-8
Calculation of Performance Data...................................B-8
Financial Statements..............................................B-8
ITEM 12. GENERAL INFORMATION AND HISTORY
Not applicable.
ITEM 13. INVESTMENT OBJECTIVES AND POLICIES
Part A contains additional information about the investment objectives and
policies of the Portfolio. This Part B should be read in conjunction with Part
A. Capitalized terms used in this Part B and not otherwise defined have the
meanings give them in Part A.
Registrant incorporates by reference additional information concerning the
investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Additional Information about
Investment Policies" and "Investment Restrictions" in the Feeder Fund SAI.
ITEM 14. MANAGEMENT OF THE PORTFOLIO
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Trustees and Officers" in the Feeder Fund SAI.
ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDER OF SECURITIES
As of October 17, 1997, Boston Management and Research owned approximately
99.9% of the value of the outstanding interests in the Portfolio. Because Boston
Management and Research controls the Portfolio, it may take actions without the
approval of any other investor. It is anticipated that investors that are
investment companies registered under the 1940 Act when requested to vote on
matters pertaining to the fundamental policies of the Portfolio, will hold a
meeting of shareholders and will cast its votes as instructed by its
shareholders. Boston Management and Research is organized as a business trust
under the laws of the Commonwealth of Massachusetts and is a wholly-owned
subsidiary of Eaton Vance Corp., a publicly held holding company. The address of
Boston Management and Research is 24 Federal Street, Boston, MA 02110.
ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning investment
advisory and other services provided to the Portfolio from "Management of the
Fund and the Portfolio", "Custodian" and "Independent Certified Public
Accountants" in the Feeder Fund SAI.
ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Security Transactions" in the Feeder
Fund SAI.
<PAGE>
ITEM 18. CAPITAL STOCK AND OTHER SECURITIES
Under the Portfolio's Declaration of Trust, the Trustees are authorized to
issue interests in the Portfolio. Investors are entitled to participate pro rata
in distributions of taxable income, loss, gain and credit of the Portfolio. Upon
dissolution of the Portfolio, the Trustees shall liquidate the assets of the
Portfolio and apply and distribute the proceeds thereof as follows: (a) first,
to the payment of all debts and obligations of the Portfolio to third parties
including, without limitation, the retirement of outstanding debt, including any
debt owed to holders of record of interests in the Portfolio ("Holders") or
their affiliates, and the expenses of liquidation, and to the setting up of any
reserves for contingencies which may be necessary; and (b) second, in accordance
with the Holders' positive Book Capital Account balances after adjusting Book
Capital Accounts for certain allocations provided in the Declaration of Trust
and in accordance with the requirements described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(b)(2). Notwithstanding the foregoing, if the Trustees
shall determine that an immediate sale of part or all of the assets of the
Portfolio would cause undue loss to the Holders, the Trustees, in order to avoid
such loss, may, after having given notification to all the Holders, to the
extent not then prohibited by the law of any jurisdiction in which the Portfolio
is then formed or qualified and applicable in the circumstances, either defer
liquidation of and withhold from distribution for a reasonable time any assets
of the Portfolio except those necessary to satisfy the Portfolio's debts and
obligations or distribute the Portfolio's assets to the Holders in liquidation.
Certificates representing an investor's interest in the Portfolio are issued
only upon the written request of a Holder.
Each Holder is entitled to vote in proportion to the amount of its interest
in the Portfolio. Holders do not have cumulative voting rights. The Portfolio is
not required and has no current intention to hold annual meetings of Holders,
but the Portfolio will hold meetings of Holders when in the judgment of the
Portfolio's Trustees it is necessary or desirable to submit matters to a vote of
Holders at a meeting. Any action which may be taken by Holders may be taken
without a meeting if Holders holding more than 50% of all interests entitled to
vote (or such larger proportion thereof as shall be required by any express
provision of the Declaration of Trust of the Portfolio) consent to the action in
writing and the consents are filed with the records of meetings of Holders.
<PAGE>
The Portfolio's Declaration of Trust may be amended by vote of Holders of
more than 50% of all interests in the Portfolio at any meeting of Holders or by
an instrument in writing without a meeting, executed by a majority of the
Trustees and consented to by the Holders of more than 50% of all interests. The
Trustees may also amend the Declaration of Trust (without the vote or consent of
Holders) to change the Portfolio's name or the state or other jurisdiction whose
law shall be the governing law, to supply any omission or cure, correct or
supplement any ambiguous, defective or inconsistent provision, to conform the
Declaration of Trust to applicable federal law or regulations or to the
requirements of the Code, or to change, modify or rescind any provision,
provided that such change, modification or rescission is determined by the
Trustees to be necessary or appropriate and not to have a materially adverse
effect on the financial interests of the Holders. No amendment of the
Declaration of Trust which would change any rights with respect to any Holder's
interest in the Portfolio by reducing the amount payable thereon upon
liquidation of the Portfolio may be made, except with the vote or consent of the
Holders of two-thirds of all interests. References in the Declaration of Trust
and in Part A or this Part B to a specified percentage of, or fraction of,
interests in the Portfolio, means Holders whose combined Book Capital Account
balances represent such specified percentage or fraction of the combined Book
Capital Account balance of all, or a specified group of, Holders.
The Portfolio may merge or consolidate with any other corporation,
association, trust or other organization or may sell or exchange all or
substantially all of its assets upon such terms and conditions and for such
consideration when and as authorized by the Holders of (a) 67% or more of the
interests in the Portfolio present or represented at the meeting of Holders, if
Holders of more than 50% of all interests are present or represented by proxy,
or (b) more than 50% of all interests, whichever is less. The Portfolio may be
terminated (i) by the affirmative vote of Holders of not less than two-thirds of
all interests at any meeting of Holders or by an instrument in writing without a
meeting, executed by a majority of the Trustees and consented to by Holders of
not less than two-thirds of all interests, or (ii) by the Trustees by written
notice to the Holders.
The Declaration of Trust provides that obligations of the Portfolio are not
binding upon the Trustees individually but only upon the property of the
Portfolio and that the Trustees will not be liable for any action or failure to
act, but nothing in the Declaration of Trust protects a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES
See "Purchase of Interests in the Portfolio" and "Redemption or Decrease of
Interest" in Part A.
Registrant incorporates by reference information concerning valuation of
the Portfolio's assets from "Determination of Net Asset Value" in the Feeder
Fund SAI.
ITEM 20. TAX STATUS
The Portfolio has been advised by tax counsel that, provided the Portfolio
is operated at all times during its existence in accordance with certain
organizational and operational documents, the Portfolio will be classified as a
partnership under the Code, and it should not be a "publicly traded partnership"
within the meaning of Section 7704 of the Code. Consequently, the Portfolio does
not expect that it will be required to pay any federal income tax, and a Holder
will be required to take into account in determining its federal income tax
liability its share of the Portfolio's income, gains, losses, deductions and
credits.
<PAGE>
Under Subchapter K of the Code, a partnership is considered to be either an
aggregate of its members or a separate entity depending upon the factual and
legal context in which the question arises. Under the aggregate approach, each
partner is treated as an owner of an undivided interest in partnership assets
and operations. Under the entity approach, the partnership is treated as a
separate entity in which partners have no direct interest in partnership assets
and operations. The Portfolio has been advised by tax counsel that, in the case
of a Holder that seeks to qualify as a RIC, the aggregate approach should apply,
and each such Holder should accordingly be deemed to own a proportionate share
of each of the assets of the Portfolio and to be entitled to the gross income of
the Portfolio attributable to that share for purposes of all requirements of
Sections 851(b), 852(b)(5), 853(a) and 854 of the Code. Further, the Portfolio
has been advised by tax counsel that each Holder that seeks to qualify as a RIC
should be deemed to hold its proportionate share of the Portfolio's assets for
the period the Portfolio has held the assets or for the period the Holder has
been an investor in the Portfolio, whichever is shorter. Investors should
consult their tax advisers regarding whether the entity or the aggregate
approach applies to their investment in the Portfolio in light of their
particular tax status and any special tax rules applicable to them.
In order to enable a Holder (that is otherwise eligible) to qualify as a
RIC, the Portfolio intends to satisfy the requirements of Subchapter M of the
Code relating to sources of income and diversification of assets as if they were
applicable to the Portfolio and to permit withdrawals in a manner that will
enable a Holder which is a RIC to comply with the distribution requirements
applicable to RICs (including those under Sections 852 and 4982 of the Code).
The Portfolio will allocate at least annually to each Holder such Holder's
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or credit in
a manner intended to comply with the Code and applicable Treasury regulations.
Tax counsel has advised the Portfolio that the Portfolio's allocations of
taxable income and loss should have "economic effect" under applicable Treasury
regulations.
To the extent the cash proceeds of any withdrawal (or, under certain
circumstances, such proceeds plus the value of any marketable securities
distributed to an investor) ("liquid proceeds") exceed a Holder's adjusted basis
of his interest in the Portfolio, the Holder will generally realize a gain for
federal income tax purposes. If, upon a complete withdrawal (redemption of the
entire interest), a Holder receives only liquid proceeds (and/or unrealized
receivables) and the Holder's adjusted basis of his interest exceeds the
proceeds of such withdrawal, the Holder will generally realize a loss for
federal income tax purposes. In addition, on a distribution to a Holder from the
Portfolio (whether pursuant to a partial or complete withdrawal or otherwise),
(1) income or gain will be recognized if the distribution is in liquidation of
the Holder's entire interest in the Portfolio and includes a disproportionate
share of any unrealized receivables held by the Portfolio and (2) gain or loss
may be recognized on a distribution to a Holder that contributed property to the
Portfolio. The tax consequences of a withdrawal of property (instead of or in
addition to liquid proceeds) will be different and will depend on the specific
factual circumstances. A Holder's adjusted basis of an interest in the Portfolio
will generally be the aggregate prices paid therefor (including the adjusted
basis of contributed property and any gain recognized on the contribution
thereof), increased by the amounts of the Holder's distributive share of items
of income (including interest income exempt from federal income tax) and
realized net gain of the Portfolio, and reduced, but not below zero, by (i) the
amounts of the Holder's distributive share of items of Portfolio loss, and (ii)
the amount of any cash distributions (including distributions of interest income
exempt from federal income tax and cash distributions on withdrawals from the
Portfolio) and the basis to the Holder of any property received by such Holder
other than in liquidation, and (iii) the Holder's distributive share of the
Portfolio's nondeductible expenditures not properly chargeable to capital
account. Increases or decreases in a Holder's share of the Portfolio's
liabilities may also result in corresponding increases or decreases in such
adjusted basis.
The Portfolio's transactions in options, futures contracts, forward
contracts and certain other transactions involving foreign exchange gain or loss
will be subject to special tax rules, the effect of which may be to accelerate
income to the Portfolio, defer Portfolio losses, cause adjustments in the
holding periods of Portfolio securities, convert capital gain into ordinary
income and convert short-term capital losses into long-term capital losses. For
example, the tax treatment of many types of options, futures contracts and
forward contracts entered into by the Portfolio will be governed by Section 1256
of the Code. Absent a tax election for "mixed straddles" (see below), each such
position held by the Portfolio on the last business day of each taxable year
will be marked to market (i.e., treated as if it were closed out on such day),
and any resulting gain or loss, except for certain currency-related positions,
will generally be treated as 60% long-term and 40% short-term capital gain or
loss, with subsequent adjustments made to any gain or loss realized upon an
actual disposition of such positions. When the Portfolio holds an option or
contract governed by Section 1256 which substantially diminishes the Holder's
risk of loss with respect to another position of the Portfolio not governed by
Section 1256 (as might occur in some hedging transactions), this combination of
positions could be a "mixed straddle" which is generally subject to special tax
rules requiring deferral of losses and other adjustments in addition to being
subject in part to Section 1256. The Portfolio may make certain tax elections
for its "mixed straddles" which could alter certain effects of these rules.
Income from transactions in options and futures contracts derived by the
Portfolio with respect to its business of investing in securities will qualify
as permissible income for its Holders that are RICs under the requirement that
at least 90% of a RIC's gross income each taxable year consist of specified
types of income.
The Portfolio anticipates that it will be subject to foreign withholding
taxes with respect to income on certain foreign securities. These taxes may be
reduced or eliminated under the terms of an applicable U.S. income tax treaty.
Certain foreign exchange gains and losses realized by the Portfolio will be
treated as ordinary income and losses. Certain uses of foreign currency and
investment by the Portfolio in certain "passive foreign investment companies"
may be limited or a tax election may be made, if available, in order to enable
an investor that is a RIC to preserve its qualification as a RIC or to avoid
imposition of a tax on such an investor.
The Portfolio's investments, if any, in securities issued with original
issue discount (possibly including certain asset-related securities) or
securities acquired at a market discount (if an election is made to include
accrued market discount in current income) will cause it to realize income prior
to the receipt of cash payments with respect to these securities. In order to
enable a Holder to distribute its proportionate share of this income, the
Portfolio may be required to liquidate portfolio securities that it might
otherwise have continued to hold in order to generate cash that the Holder may
withdraw from the Portfolio for subsequent distribution to such Holder's
shareholders.
An entity that is treated as a partnership under the Code, such as the
Portfolio, is generally treated as a partnership under state and local tax laws,
but certain states may have different entity classification criteria and may
therefore reach a different conclusion. Entities that are classified as
partnerships are not treated as taxable entities under most state and local tax
laws, and the income of a partnership is considered to be income of partners
both in timing and in character. The exemption of interest income for federal
income tax purposes does not necessarily result in exemption under the income or
tax laws of any state or local taxing authority. The laws of the various states
and local taxing authorities vary with respect to the taxation of such interest
income, as well as to the status of a partnership interest under state and local
tax laws, and each holder of an interest in the Portfolio is advised to consult
his own tax adviser.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, insurance
companies and financial institutions. Investors should consult their own tax
advisers with respect to special tax rules that may apply in their particular
situations, as well as the state, local or foreign tax consequences of investing
in the Portfolio.
ITEM 21. UNDERWRITERS
The placement agent for the Portfolio is EVD. Investment companies, common
and commingled trust funds and similar organizations and entities may
continuously invest in the Portfolio.
ITEM 22. CALCULATION OF PERFORMANCE DATA
Not applicable.
ITEM 23. FINANCIAL STATEMENTS
The following audited financial statements of the Portfolio included herein
have been included in reliance upon the report of Deloitte & Touche LLP,
independent certified public accountants, as experts in accounting and auditing.
Statement of Assets and Liabilities as of October 17, 1997
Independent Auditors' Report
<PAGE>
Financial Statement
RUSSIA AND EASTERN EUROPE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 17, 1997
ASSETS:
Cash............................................ $100,010
--------
Total assets...................... $100,010
LIABILITIES: 0
Net assets............................................... $100,010
========
NOTED:
(1) Russia and Eastern Europe Portfolio (the "Portfolio") was organized as a New
York Trust on October 17, 1997 and has been inactive since that date, except for
matters relating to its organization and registration as an investment company
under the Investment Company Act of 1940 and the sale of interests therein at
the purchase price of $100,000 to Boston Management and Research and $10 to
Eaton Vance Management (the "Initial Interests").
(2) At 4:00 p.m., New York City time, on each business day of the Portfolio, the
value of an investor's interest in the Portfolio is equal to the product of (i)
the aggregate net asset value of the Portfolio multiplied by (ii) the percentage
representing that investor's share of the aggregate interest in the Portfolio
effective for that day.
<PAGE>
REPORT OF INDEPENDENT AUDITORS'
To the Trustees and Investors of
Russia and Eastern Europe Portfolio:
We have audited the accompanying statement of assets and liabilities of
Russia and Eastern Europe Portfolio (a New York Trust) as of October 17, 1997.
This financial statement is the responsibility of the Portfolio's management.
Our responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Russia and Eastern Europe
Portfolio as of October 17, 1997, in conformity with generally accepted
accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
October 20, 1997
<PAGE>
PART C
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
The financial statements called for by this Item are included in
Part B and listed in Item 23 hereof.
(b) Exhibits
1. Declaration of Trust dated October 17, 1997 filed herewith.
2. By-Laws of the Registrant adopted October17, 1997 filed
herewith.
5. Investment Advisory Agreement between the Registrant and
Lloyd George Investment Management (Bermuda) Limited dated
November 17, 1997 filed herewith.
6. Placement Agent Agreement with Eaton Vance Distributors,
Inc. dated November 17, 1997 filed herewith.
8. Custodian Agreement with Investors Bank & Trust Company
dated November 17, 1997 filed herewith.
9. Administration Agreement between the Registrant and EVM
dated November 17, 1997 filed herewith.
13. Investment representation letter of EVM dated October 17,
1997 filed herewith.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Number of
Title of Class Record Holders
As of October 17, 1997
Interests 2
ITEM 27. INDEMNIFICATION
Article V of the Registrant's Declaration of Trust contains indemnification
provisions for Trustees and officers. The Trustees and officers of the
Registrant and the personnel of the Registrant's investment adviser are insured
under an errors and omissions liability insurance policy.
<PAGE>
The Placement Agent Agreement also provides for reciprocal indemnity of the
placement agent, on the one hand, and the Trustees and officers, on the other.
ITEM 28. BUSINESS AND OTHER CONNECTIONS
To the knowledge of the Portfolio, none of the trustees or officers of the
Portfolio's investment adviser, except as set forth on its Form ADV as filed
with the Commission, is engaged in any other business, profession, vocation or
employment of a substantial nature, except that certain trustees and officers
also hold various positions with and engage in business for affiliates of the
investment adviser.
ITEM 29. PRINCIPAL UNDERWRITERS
Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the 1940 Act and the Rules promulgated
thereunder are in the possession and custody of the Registrant's custodian,
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116, with the
exception of certain corporate documents and portfolio trading documents, which
are in the possession and custody of the Registrant's administrator at 24
Federal Street, Boston, MA 02110. The Registrant is informed that all applicable
accounts, books and documents required to be maintained by registered investment
advisers are in the custody and possession of the Registrant's investment
adviser.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Registration Statement on Form N-1A to be signed
on its behalf by the undersigned, thereunto duly authorized in the City of
Boston and Commonwealth of Massachusetts on the 17th day of November, 1997.
RUSSIA AND EASTERN EUROPE PORTFOLIO
By: /s/ James B. Hawkes
--------------------------------
James B. Hawkes
Vice President
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
- ----------- ----------------------
1. Declaration of Trust dated October 17, 1997.
2. By-Laws of the Registrant adopted October 17, 1997.
5. Investment Advisory Agreement between the Registrant and Boston
Management and Research dated November 17, 1997.
6. Placement Agent Agreement with Eaton Vance Distributors, Inc.
dated November 17, 1997.
8. Custodian Agreement with Investors Bank & Trust Company dated
November 17, 1997.
9. Administration Agreement between the Registrant and Eaton Vance
Management dated November 17, 1997.
13. Investment representation letter of Eaton Vance Management dated
October 17, 1997.
RUSSIA AND EASTERN EUROPE PORTFOLIO
DECLARATION OF TRUST
Dated as of October 17, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I--THE TRUST.......................................................1
Section 1.1 Name............................................1
Section 1.2 Definitions.....................................1
ARTICLE II--TRUSTEES.......................................................3
Section 2.1 Number and Qualification........................3
Section 2.2 Term and Election...............................3
Section 2.3 Resignation, Removal and Retirement.............3
Section 2.4 Vacancies.......................................4
Section 2.5 Meetings........................................4
Section 2.6 Officers; Chairman of the Board.................4
Section 2.7 By-Laws.........................................5
ARTICLE III--POWERS OF TRUSTEES............................................5
Section 3.1 General.........................................5
Section 3.2 Investments.....................................5
Section 3.3 Legal Title.....................................5
Section 3.4 Sale and Increases of Interests.................6
Section 3.5 Decreases and Redemptions of Interests..........6
Section 3.6 Borrow Money....................................6
Section 3.7 Delegation; Committees..........................6
Section 3.8 Collection and Payment..........................6
Section 3.9 Expenses........................................6
Section 3.10 Miscellaneous Powers............................6
Section 3.11 Further Powers..................................7
Section 3.12 Litigation......................................7
ARTICLE IV--INVESTMENT ADVISORY, ADMINISTRATION AND PLACEMENT AGENT
ARRANGEMENTS....................................8
Section 4.1 Investment Advisory, Administration and Other
Arrangements.................................8
Section 4.2 Parties to Contract.............................8
ARTICLE V--LIABILITY OF HOLDERS; LIMITATIONS OF LIABILITY OF TRUSTEES,
OFFICERS, ETC...................................8
Section 5.1 Liability of Holders; Indemnification...........8
Section 5.2 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Third Parties.............................9
Section 5.3 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Trust, Holders, etc.......................9
Section 5.4 Mandatory Indemnification.......................9
Section 5.5 No Bond Required of Trustees....................9
Section 5.6 No Duty of Investigation; Notice in Trust
Instruments, etc.............................9
Section 5.7 Reliance on Experts, etc.......................10
<PAGE>
ARTICLE VI--INTERESTS.....................................................10
Section 6.1 Interests......................................10
Section 6.2 Non-Transferability............................10
Section 6.3 Register of Interests..........................10
ARTICLE VII--INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS............11
ARTICLE VIII--DETERMINATION OF BOOK CAPITAL ACCOUNT BALANCES,
AND DISTRIBUTIONS..............................11
Section 8.1 Book Capital Account Balances..................11
Section 8.2 Allocations and Distributions to Holders.......11
Section 8.3 Power to Modify Foregoing Procedures...........12
ARTICLE IX--HOLDERS.......................................................12
Section 9.1 Rights of Holders..............................12
Section 9.2 Meetings of Holders............................12
Section 9.3 Notice of Meetings.............................12
Section 9.4 Record Date for Meetings, Distributions, etc...12
Section 9.5 Proxies, etc...................................13
Section 9.6 Reports........................................13
Section 9.7 Inspection of Records..........................13
Section 9.8 Holder Action by Written Consent...............13
Section 9.9 Notices........................................13
ARTICLE X--DURATION; TERMINATION; AMENDMENT; MERGERS; ETC.................14
Section 10.1 Duration.......................................14
Section 10.2 Termination....................................15
Section 10.3 Dissolution....................................15
Section 10.4 Amendment Procedure............................15
Section 10.5 Merger, Consolidation and Sale of Assets.......16
Section 10.6 Incorporation..................................16
ARTICLE XI--MISCELLANEOUS.................................................17
Section 11.1 Governing Law..................................17
Section 11.2 Counterparts...................................17
Section 11.3 Reliance by Third Parties......................17
Section 11.4 Provisions in Conflict With Law or Regulations.17
<PAGE>
DECLARATION OF TRUST
OF
RUSSIA AND EASTERN EUROPE PORTFOLIO
This DECLARATION OF TRUST of Russia and Eastern Europe Portfolio is made as
of the 17th day of October, 1997 by the parties signatory hereto, as Trustees
(as defined in Section 1.2 hereof).
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the law of the
State of New York for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the trust assets be composed of money and
property contributed thereto by the holders of interests in the trust entitled
to ownership rights in the trust;
NOW, THEREFORE, the Trustees hereby declare that they will hold in trust
all money and property contributed to the trust fund and will manage and dispose
of the same for the benefit of the holders of interests in the Trust and subject
to the provisions hereof, to wit:
ARTICLE I
THE TRUST
1.1. NAME. The name of the trust created hereby (the "Trust") shall be
Russia and Eastern Europe Portfolio and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust" wherever hereinafter
used) shall refer to the Trustees as Trustees, and not individually, and shall
not refer to the officers, employees, agents or independent contractors of the
Trust or holders of interests in the Trust.
1.2. DEFINITIONS. As used in this Declaration, the following terms shall
have the following meanings:
"ADMINISTRATOR" shall mean any party furnishing services to the Trust
pursuant to any administration contract described in Section 4.1 hereof.
"BOOK CAPITAL ACCOUNT" shall mean, for any Holder at any time, the Book
Capital Account of the Holder for such day, determined in accordance with
Section 8.1 hereof.
"CODE" shall mean the U.S. Internal Revenue Code of 1986, as amended from
time to time, as well as any non-superseded provisions of the U.S. Internal
Revenue Code of 1954, as amended (or any corresponding provision or provisions
of succeeding law).
"COMMISSION" shall mean the U.S. Securities and Exchange Commission.
"DECLARATION" shall mean this Declaration of Trust as amended from time to
time. References in this Declaration to "DECLARATION", "HEREOF", "HEREIN" and
"HEREUNDER" shall be deemed to refer to this Declaration rather than the article
or section in which any such word appears.
"FISCAL YEAR" shall mean an annual period determined by the Trustees which
ends on December 31 of each year or on such other day as is permitted or
required by the Code.
"HOLDERS" shall mean as of any particular time all holders of record of
Interests in the Trust.
<PAGE>
"INSTITUTIONAL INVESTOR(S)" shall mean any regulated investment company,
segregated asset account, foreign investment company, common trust fund, group
trust or other investment arrangement, whether organized within or without the
United States of America, other than an individual, S corporation, partnership
or grantor trust beneficially owned by any individual, S corporation or
partnership.
"INTEREST(S)" shall mean the interest of a Holder in the Trust, including
all rights, powers and privileges accorded to Holders by this Declaration, which
interest may be expressed as a percentage, determined by calculating, at such
times and on such basis as the Trustees shall from time to time determine, the
ratio of each Holder's Book Capital Account balance to the total of all Holders'
Book Capital Account balances. Reference herein to a specified percentage of, or
fraction of, Interests, means Holders whose combined Book Capital Account
balances represent such specified percentage or fraction of the combined Book
Capital Account balances of all, or a specified group of, Holders.
"INTERESTED PERSON" shall have the meaning given it in the 1940 Act.
"INVESTMENT ADVISER" shall mean any party furnishing services to the Trust
pursuant to any investment advisory contract described in Section 4.1 hereof.
"MAJORITY INTERESTS VOTE" shall mean the vote, at a meeting of Holders, of
(A) 67% or more of the Interests present or represented at such meeting, if
Holders of more than 50% of all Interests are present or represented by proxy,
or (B) more than 50% of all Interests, whichever is less.
"PERSON" shall mean and include individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
"REDEMPTION" shall mean the complete withdrawal of an Interest of a Holder
the result of which is to reduce the Book Capital Account balance of that Holder
to zero, and the term "REDEEM" shall mean to effect a Redemption.
"TRUSTEES" shall mean each signatory to this Declaration, so long as such
signatory shall continue in office in accordance with the terms hereof, and all
other individuals who at the time in question have been duly elected or
appointed and have qualified as Trustees in accordance with the provisions
hereof and are then in office, and reference in this Declaration to a Trustee or
Trustees shall refer to such individual or individuals in their capacity as
Trustees hereunder.
"TRUST PROPERTY" shall mean as of any particular time any and all property,
real or personal, tangible or intangible, which at such time is owned or held by
or for the account of the Trust or the Trustees.
The "1940 ACT" shall mean the U.S. Investment Company Act of 1940, as
amended from time to time, and the rules and regulations thereunder.
ARTICLE II
TRUSTEES
2.1. NUMBER AND QUALIFICATION. The number of Trustees shall be fixed from
time to time by action of the Trustees taken as provided in Section 2.5 hereof;
provided, however, that the number of Trustees so fixed shall in no event be
less than two or more than 15. Any vacancy created by an increase in the number
of Trustees may be filled by the appointment of an individual having the
qualifications described in this Section 2.1 made by action of the Trustees
taken as provided in Section 2.5 hereof. Any such appointment shall not become
effective, however, until the individual named in the written instrument of
appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. No reduction in the number
of Trustees shall have the effect of removing any Trustee from office. Whenever
a vacancy occurs, until such vacancy is filled as provided in Section 2.4
hereof, the Trustees continuing in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A Trustee shall be an individual
at least 21 years of age who is not under legal disability.
<PAGE>
2.2. TERM AND ELECTION. Each Trustee named herein, or elected or appointed
prior to the first meeting of Holders, shall (except in the event of
resignations, retirements, removals or vacancies pursuant to Section 2.3 or
Section 2.4 hereof) hold office until a successor to such Trustee has been
elected at such meeting and has qualified to serve as Trustee, as required under
the 1940 Act. Subject to the provisions of Section 16(a) of the 1940 Act and
except as provided in Section 2.3 hereof, each Trustee shall hold office during
the lifetime of the Trust and until its termination as hereinafter provided.
2.3. RESIGNATION, REMOVAL AND RETIREMENT. Any Trustee may resign his or her
trust (without need for prior or subsequent accounting) by an instrument in
writing executed by such Trustee and delivered or mailed to the Chairman, if
any, the President or the Secretary of the Trust and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any Trustee may be removed by the affirmative vote of Holders of
two-thirds of the Interests or (provided the aggregate number of Trustees, after
such removal and after giving effect to any appointment made to fill the vacancy
created by such removal, shall not be less than the number required by Section
2.1 hereof) with cause, by the action of two-thirds of the remaining Trustees.
Removal with cause includes, but is not limited to, the removal of a Trustee due
to physical or mental incapacity or failure to comply with such written policies
as from time to time may be adopted by at least two-thirds of the Trustees with
respect to the conduct of the Trustees and attendance at meetings. Any Trustee
who has attained a mandatory retirement age, if any, established pursuant to any
written policy adopted from time to time by at least two-thirds of the Trustees
shall, automatically and without action by such Trustee or the remaining
Trustees, be deemed to have retired in accordance with the terms of such policy,
effective as of the date determined in accordance with such policy. Any Trustee
who has become incapacitated by illness or injury as determined by a majority of
the other Trustees, may be retired by written instrument executed by a majority
of the other Trustees, specifying the date of such Trustee's retirement. Upon
the resignation, retirement or removal of a Trustee, or a Trustee otherwise
ceasing to be a Trustee, such resigning, retired, removed or former Trustee
shall execute and deliver such documents as the remaining Trustees shall require
for the purpose of conveying to the Trust or the remaining Trustees any Trust
Property held in the name of such resigning, retired, removed or former Trustee.
Upon the death of any Trustee or upon removal, retirement or resignation due to
any Trustee's incapacity to serve as Trustee, the legal representative of such
deceased, removed, retired or resigning Trustee shall execute and deliver on
behalf of such deceased, removed, retired or resigning Trustee such documents as
the remaining Trustees shall require for the purpose set forth in the preceding
sentence.
2.4. VACANCIES. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, retirement,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. No such vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. In the case of a vacancy, Holders of at least a majority of
the Interests entitled to vote, acting at any meeting of Holders held in
accordance with Section 9.2 hereof, or, to the extent permitted by the 1940 Act,
a majority vote of the Trustees continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Trustee so elected by
the Trustees or the Holders shall hold office as provided in this Declaration.
2.5. MEETINGS. Meetings of the Trustees shall be held from time to time
upon the call of the Chairman, if any, the President, the Secretary, an
Assistant Secretary or any two Trustees, at such time, on such day and at such
place, as shall be designated in the notice of the meeting. The Trustees shall
hold an annual meeting for the election of officers and the transaction of other
business which may come before such meeting. Regular meetings of the Trustees
may be held without call or notice at a time and place fixed by the By-Laws or
by resolution of the Trustees. Notice of any other meeting shall be given by
mail, by telegram (which term shall include a cablegram), by telecopier or
delivered personally (which term shall include by telephone). If notice is given
by mail, it shall be mailed not later than 48 hours preceding the meeting and if
given by telegram, telecopier or personally, such notice shall be sent or
delivery made not later than 24 hours preceding the meeting. Notice of a meeting
of Trustees may be waived before or after any meeting by signed written waiver.
Neither the business to be transacted at, nor the purpose of, any meeting of the
Trustees need be stated in the notice or waiver of notice of such meeting. The
attendance of a Trustee at a meeting shall constitute a waiver of notice of such
meeting except in the situation in which a Trustee attends a meeting for the
express purpose of objecting, at the commencement of such meeting, to the
transaction of any business on the ground that the meeting was not lawfully
called or convened. The Trustees may act with or without a meeting, but no
notice need be given of action proposed to be taken by written consent. A quorum
for all meetings of the Trustees shall be a majority of the Trustees. Unless
provided otherwise in this Declaration, any action of the Trustees may be taken
at a meeting by vote of a majority of the Trustees present (a quorum being
present) or without a meeting by written consent of a majority of the Trustees.
Any committee of the Trustees, including an executive committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of the Trustees,
Trustees who are Interested Persons of the Trust or otherwise interested in any
action to be taken may be counted for quorum purposes under this Section 2.5 and
shall be entitled to vote to the extent permitted by the 1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by means of a conference telephone or similar
communications equipment by means of which all individuals participating in the
meeting can hear each other and participation in a meeting by means of such
communications equipment shall constitute presence in person at such meeting.
2.6. OFFICERS; CHAIRMAN OF THE BOARD. The Trustees shall, from time to
time, elect a President, a Secretary and a Treasurer. The Trustees may elect or
appoint, from time to time, a Chairman of the Board who shall preside at all
meetings of the Trustees and carry out such other duties as the Trustees may
designate. The Trustees may elect or appoint or authorize the President to
appoint such other officers, agents or independent contractors with such powers
as the Trustees may deem to be advisable. The Chairman, if any, shall be and
each other officer may, but need not, be a Trustee.
2.7. BY-LAWS. The Trustees may adopt and, from time to time, amend or
repeal By-Laws for the conduct of the business of the Trust.
ARTICLE III
POWERS OF TRUSTEES
3.1. GENERAL. The Trustees shall have exclusive and absolute control over
the Trust Property and over the business of the Trust to the same extent as if
the Trustees were the sole owners of the Trust Property and such business in
their own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees may perform such acts as in their sole discretion they
deem proper for conducting the business of the Trust. The enumeration of or
failure to mention any specific power herein shall not be construed as limiting
such exclusive and absolute control. The powers of the Trustees may be exercised
without order of or resort to any court.
3.2. INVESTMENTS. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an investment
company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign, transfer, exchange, distribute or otherwise
deal in or dispose of U.S. and foreign currencies and related instruments
including forward contracts, and securities, including common and preferred
stock, warrants, bonds, debentures, time notes and all other evidences of
indebtedness, negotiable or non-negotiable instruments, obligations,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, reverse repurchase agreements, convertible securities, forward
contracts, options, futures contracts, and other securities, including, without
limitation, those issued, guaranteed or sponsored by any state, territory or
possession of the United States and the District of Columbia and their political
subdivisions, agencies and instrumentalities, or by the U.S. Government, any
foreign government, or any agency, instrumentality or political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality, or by any bank, savings institution, corporation or other
business entity organized under the laws of the United States or under any
foreign laws; and to exercise any and all rights, powers and privileges of
ownership or interest in respect of any and all such investments of any kind and
description, including, without limitation, the right to consent and otherwise
act with respect thereto, with power to designate one or more Persons to
exercise any of such rights, powers and privileges in respect of any of such
investments; and the Trustees shall be deemed to have the foregoing powers with
respect to any additional instruments in which the Trustees may determine to
invest.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
3.3. LEGAL TITLE. Legal title to all Trust Property shall be vested in the
Trustees as joint tenants except that the Trustees shall have the power to cause
legal title to any Trust Property to be held by or in the name of one or more of
the Trustees, or in the name of the Trust, or in the name or nominee name of any
other Person on behalf of the Trust, on such terms as the Trustees may
determine.
The right, title and interest of the Trustees in the Trust Property shall
vest automatically in each individual who may hereafter become a Trustee upon
his due election and qualification. Upon the resignation, removal or death of a
Trustee, such resigning, removed or deceased Trustee shall automatically cease
to have any right, title or interest in any Trust Property, and the right, title
and interest of such resigning, removed or deceased Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
3.4. SALE AND INCREASES OF INTERESTS. The Trustees, in their discretion,
may, from time to time, without a vote of the Holders, permit any Institutional
Investor to purchase an Interest, or increase its Interest, for such type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day), and on such terms as the Trustees may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. Individuals, S corporations, partnerships and
grantor trusts that are beneficially owned by any individual, S corporation or
partnership may not purchase Interests. A Holder which has redeemed its Interest
may not be permitted to purchase an Interest until the later of 60 calendar days
after the date of such Redemption or the first day of the Fiscal Year next
succeeding the Fiscal Year during which such Redemption occurred.
3.5 DECREASES AND REDEMPTIONS OF INTERESTS. Subject to Article VII hereof,
the Trustees, in their discretion, may, from time to time, without a vote of the
Holders, permit a Holder to redeem its Interest, or decrease its Interest, for
either cash or property, at such time or times (including, without limitation,
each business day), and on such terms as the Trustees may deem best.
3.6. BORROW MONEY. The Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, including the lending
of portfolio securities, and to endorse, guarantee, or undertake the performance
of any obligation, contract or engagement of any other Person.
3.7. DELEGATION; COMMITTEES. The Trustees shall have power, consistent with
their continuing exclusive and absolute control over the Trust Property and over
the business of the Trust, to delegate from time to time to such of their number
or to officers, employees, agents or independent contractors of the Trust the
doing of such things and the execution of such instruments in either the name of
the Trust or the names of the Trustees or otherwise as the Trustees may deem
expedient.
<PAGE>
3.8. COLLECTION AND PAYMENT. The Trustees shall have power to collect all
property due to the Trust; and to pay all claims, including taxes, against the
Trust Property; to prosecute, defend, compromise or abandon any claims relating
to the Trust or the Trust Property; to foreclose any security interest securing
any obligation, by virtue of which any property is owed to the Trust; and to
enter into releases, agreements and other instruments.
3.9. EXPENSES. The Trustees shall have power to incur and pay any expenses
which in the opinion of the Trustees are necessary or incidental to carry out
any of the purposes of this Declaration, and to pay reasonable compensation from
the Trust Property to themselves as Trustees. The Trustees shall fix the
compensation of all officers, employees and Trustees. The Trustees may pay
themselves such compensation for special services, including legal and brokerage
services, as they in good faith may deem reasonable, and reimbursement for
expenses reasonably incurred by themselves on behalf of the Trust.
3.10. MISCELLANEOUS POWERS. The Trustees shall have power to: (a) employ or
contract with such Persons as the Trustees may deem appropriate for the
transaction of the business of the Trust and terminate such employees or
contractual relationships as they consider appropriate; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c) purchase,
and pay for out of Trust Property, insurance policies insuring the Investment
Adviser, Administrator, placement agent, Holders, Trustees, officers, employees,
agents or independent contractors of the Trust against all claims arising by
reason of holding any such position or by reason of any action taken or omitted
by any such Person in such capacity, whether or not the Trust would have the
power to indemnify such Person against such liability; (d) establish pension,
profit-sharing and other retirement, incentive and benefit plans for the
Trustees, officers, employees or agents of the Trust; (e) make donations,
irrespective of benefit to the Trust, for charitable, religious, educational,
scientific, civic or similar purposes; (f) to the extent permitted by law,
indemnify any Person with whom the Trust has dealings, including the Investment
Adviser, Administrator, placement agent, Holders, Trustees, officers, employees,
agents or independent contractors of the Trust, to such extent as the Trustees
shall determine; (g) guarantee indebtedness or contractual obligations of
others; (h) determine and change the Fiscal Year and the method by which the
accounts of the Trust shall be kept; and (i) adopt a seal for the Trust, but the
absence of such a seal shall not impair the validity of any instrument executed
on behalf of the Trust.
3.11. FURTHER POWERS. The Trustees shall have power to conduct the business
of the Trust and carry on its operations in any and all of its branches and
maintain offices, whether within or without the State of New York, in any and
all states of the United States of America, in the District of Columbia, and in
any and all commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and of foreign
governments, and to do all such other things and execute all such instruments as
they deem necessary, proper, appropriate or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. The Trustees shall have full power and authority, in the name and on
behalf of the Trust to engage in and to prosecute, defend, compromise, settle,
abandon, or adjust by arbitration or otherwise, any actions, suits, proceedings,
disputes, claims and demands relating to this Trust, and out of the assets of
the Trust to pay or to satisfy any liabilities, losses, debts, claims or
expenses (including without limitation attorneys' fees) incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any committee thereof, in the exercise
of their or its good faith business judgment, to dismiss or terminate any
action, suit, proceeding, dispute, claim or demand, derivative or otherwise,
brought by any person, including a Holder in its own name or in the name of the
Trust, whether or not the Trust or any of the Trustees may be named individually
therein or the subject matter arises by reason of business for or on behalf of
the Trust. Any determination as to what is in the interests of the Trust which
is made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration, the presumption shall be in favor of a grant of
power to the Trustees. The Trustees shall not be required to obtain any court
order in order to deal with Trust Property.
<PAGE>
3.12 LITIGATION. The Trustees shall have full power and authority, in the
name and on behalf of the Trust, to engage in and to prosecute, defend,
compromise, settle, abandon, or adjust by arbitration or otherwise, any actions,
suits, proceedings, disputes, claims and demands relating to the Trust, and out
of the assets of the Trust to pay or to satisfy any liabilities, losses, debts,
claims or expenses (including without limitation attorneys' fees) incurred in
connection therewith, including those of litigation, and such power shall
include without limitation the power of the Trustees or any committee thereof,
in the exercise of their or its good faith business judgment, to dismiss or
terminate any action, suit, proceeding, dispute, claim or demand, derivative or
otherwise, brought by any Person, including a Holder in its own name or in the
name of the Trust, whether or not the Trust or any of the Trustees may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Trust.
ARTICLE IV
Investment Advisory, Administration
and Placement Agent Arrangements
4.1. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER ARRANGEMENTS. The
Trustees may in their discretion, from time to time, enter into investment
advisory contracts, administration contracts or placement agent agreements
whereby the other party to such contract or agreement shall undertake to furnish
the Trustees such investment advisory, administration, placement agent and/or
other services as the Trustees shall, from time to time, consider appropriate or
desirable and all upon such terms and conditions as the Trustees may in their
sole discretion determine. Notwithstanding any provision of this Declaration,
the Trustees may authorize any Investment Adviser (subject to such general or
specific instructions as the Trustees may, from time to time, adopt) to effect
purchases, sales, loans or exchanges of Trust Property on behalf of the Trustees
or may authorize any officer, employee or Trustee to effect such purchases,
sales, loans or exchanges pursuant to recommendations of any such Investment
Adviser (all without any further action by the Trustees). Any such purchase,
sale, loan or exchange shall be deemed to have been authorized by the Trustees.
4.2. PARTIES TO CONTRACT. Any contract of the character described in
Section 4.1 hereof or in the By-Laws of the Trust may be entered into with any
corporation, firm, trust or association, although one or more of the Trustees or
officers of the Trust may be an officer, director, Trustee, shareholder or
member of such other party to the contract, and no such contract shall be
invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any individual holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust under
or by reason of any such contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when entered into
was reasonable and fair and not inconsistent with the provisions of this Article
IV or the By-Laws of the Trust. The same Person may be the other party to one or
more contracts entered into pursuant to Section 4.1 hereof or the By-Laws of the
Trust, and any individual may be financially interested or otherwise affiliated
with Persons who are parties to any or all of the contracts mentioned in this
Section 4.2 or in the By-Laws of the Trust.
ARTICLE V
Liability of Holders; Limitations of
Liability of Trustees, Officers, etc.
5.1. LIABILITY OF HOLDERS; INDEMNIFICATION. Each Holder shall be jointly
and severally liable (with rights of contribution INTER SE in proportion to
their respective Interests in the Trust) for the liabilities and obligations of
the Trust in the event that the Trust fails to satisfy such liabilities and
obligations; provided, however, that, to the extent assets are available in the
Trust, the Trust shall indemnify and hold each Holder harmless from and against
any claim or liability to which such Holder may become subject by reason of
being or having been a Holder to the extent that such claim or liability imposes
on the Holder an obligation or liability which, when compared to the obligations
and liabilities imposed on other Holders, is greater than such Holder's Interest
(proportionate share), and shall reimburse such Holder for all legal and other
expenses reasonably incurred by such Holder in connection with any such claim or
liability. The rights accruing to a Holder under this Section 5.1 shall not
exclude any other right to which such Holder may be lawfully entitled, nor shall
anything contained herein restrict the right of the Trust to indemnify or
reimburse a Holder in any appropriate situation even though not specifically
provided herein. Notwithstanding the indemnification procedure described above,
it is intended that each Holder shall remain jointly and severally liable to the
Trust's creditors as a legal matter.
5.2. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS,
INDEPENDENT CONTRACTORS TO THIRD PARTIES. No Trustee, officer, employee, agent
or independent contractor (except in the case of an agent or independent
contractor to the extent expressly provided by written contract) of the Trust
shall be subject to any personal liability whatsoever to any Person, other than
the Trust or the Holders, in connection with Trust Property or the affairs of
the Trust; and all such Persons shall look solely to the Trust Property for
satisfaction of claims of any nature against a Trustee, officer, employee, agent
or independent contractor (except in the case of an agent or independent
contractor to the extent expressly provided by written contract) of the Trust
arising in connection with the affairs of the Trust.
5.3. LIMITATIONS OF LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS,
INDEPENDENT CONTRACTORS TO TRUST, HOLDERS, ETC. No Trustee, officer, employee,
agent or independent contractor (except in the case of an agent or independent
contractor to the extent expressly provided by written contract) of the Trust
shall be liable to the Trust or the Holders for any action or failure to act
(including, without limitation, the failure to compel in any way any former or
acting Trustee to redress any breach of trust) except for such Person's own bad
faith, willful misfeasance, gross negligence or reckless disregard of such
Person's duties.
5.4. MANDATORY INDEMNIFICATION. The Trust shall indemnify, to the fullest
extent permitted by law (including the 1940 Act), each Trustee, officer,
employee, agent or independent contractor (except in the case of an agent or
independent contractor to the extent expressly provided by written contract) of
the Trust (including any Person who serves at the Trust's request as a director,
officer or trustee of another organization in which the Trust has any interest
as a shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as fines
and penalties, and as counsel fees) reasonably incurred by such Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which such Person may be involved or
with which such Person may be threatened, while in office or thereafter, by
reason of such Person being or having been such a Trustee, officer, employee,
agent or independent contractor, except with respect to any matter as to which
such Person shall have been adjudicated to have acted in bad faith, willful
misfeasance, gross negligence or reckless disregard of such Person's duties;
provided, however, that as to any matter disposed of by a compromise payment by
such Person, pursuant to a consent decree or otherwise, no indemnification
either for such payment or for any other expenses shall be provided unless there
has been a determination that such Person did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Person's office by the court or other body approving the
settlement or other disposition or by a reasonable determination, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that such Person did not engage in such conduct by written opinion from
independent legal counsel approved by the Trustees. The rights accruing to any
Person under these provisions shall not exclude any other right to which such
Person may be lawfully entitled; provided that no Person may satisfy any right
of indemnity or reimbursement granted in this Section 5.4 or in Section 5.2
hereof or to which such Person may be otherwise entitled except out of the Trust
Property. The Trustees may make advance payments in connection with
indemnification under this Section 5.4, provided that the indemnified Person
shall have given a written undertaking to reimburse the Trust in the event it is
subsequently determined that such Person is not entitled to such
indemnification.
5.5. NO BOND REQUIRED OF TRUSTEES. No Trustee shall, as such, be obligated
to give any bond or surety or other security for the performance of any of such
Trustee's duties hereunder.
<PAGE>
5.6. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC. No
purchaser, lender or other Person dealing with any Trustee, officer, employee,
agent or independent contractor of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by such
Trustee, officer, employee, agent or independent contractor or be liable for the
application of money or property paid, loaned or delivered to or on the order of
such Trustee, officer, employee, agent or independent contractor. Every
obligation, contract, instrument, certificate or other interest or undertaking
of the Trust, and every other act or thing whatsoever executed in connection
with the Trust shall be conclusively taken to have been executed or done by the
executors thereof only in their capacity as Trustees, officers, employees,
agents or independent contractors of the Trust. Every written obligation,
contract, instrument, certificate or other interest or undertaking of the Trust
made or sold by any Trustee, officer, employee, agent or independent contractor
of the Trust, in such capacity, shall contain an appropriate recital to the
effect that the Trustee, officer, employee, agent or independent contractor of
the Trust shall not personally be bound by or liable thereunder, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim thereunder, and appropriate references shall be made therein to the
Declaration, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to impose
personal liability on any Trustee, officer, employee, agent or independent
contractor of the Trust. Subject to the provisions of the 1940 Act, the Trust
may maintain insurance for the protection of the Trust Property, the Holders,
and the Trustees, officers, employees, agents and independent contractors of the
Trust in such amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole judgment shall
deem advisable.
5.7. RELIANCE ON EXPERTS, ETC. Each Trustee, officer, employee, agent or
independent contractor of the Trust shall, in the performance of such Person's
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust (whether or not the Trust would have the
power to indemnify such Persons against such liability), upon an opinion of
counsel, or upon reports made to the Trust by any of its officers or employees
or by any Investment Adviser or Administrator, accountant, appraiser or other
experts or consultants selected with reasonable care by the Trustees, officers
or employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.
ARTICLE VI
INTERESTS
6.1. INTERESTS. The beneficial interest in the Trust Property shall consist
of non-transferable Interests. The Interests shall be personal property giving
only the rights in this Declaration specifically set forth. The value of an
Interest shall be equal to the Book Capital Account balance of the Holder of the
Interest.
6.2. NON-TRANSFERABILITY. A Holder may not transfer, sell or exchange its
Interest.
6.3. REGISTER OF INTERESTS. A register shall be kept at the Trust under the
direction of the Trustees which shall contain the name, address and Book Capital
Account balance of each Holder. Such register shall be conclusive as to the
identity of the Holders, and the Trust shall not be bound to recognize any
equitable or legal claim to or interest in an Interest which is not contained in
such register. No Holder shall be entitled to receive payment of any
distribution, nor to have notice given to it as herein provided, until it has
given its address to such officer or agent of the Trust as is keeping such
register for entry thereon.
<PAGE>
ARTICLE VII
INCREASES, DECREASES AND REDEMPTIONS OF INTERESTS
Subject to applicable law, to the provisions of this Declaration and to
such restrictions as may from time to time be adopted by the Trustees, each
Holder shall have the right to vary its investment in the Trust at any time
without limitation by increasing (through a capital contribution) or decreasing
(through a capital withdrawal) or by a Redemption of its Interest. An increase
in the investment of a Holder in the Trust shall be reflected as an increase in
the Book Capital Account balance of that Holder and a decrease in the investment
of a Holder in the Trust or the Redemption of the Interest of a Holder shall be
reflected as a decrease in the Book Capital Account balance of that Holder. The
Trust shall, upon appropriate and adequate notice from any Holder increase,
decrease or redeem such Holder's Interest for an amount determined by the
application of a formula adopted for such purpose by resolution of the Trustees;
provided that (a) the amount received by the Holder upon any such decrease or
Redemption shall not exceed the decrease in the Holder's Book Capital Account
balance effected by such decrease or Redemption of its Interest, and (b) if so
authorized by the Trustees, the Trust may, at any time and from time to time,
charge fees for effecting any such decrease or Redemption, at such rates as the
Trustees may establish, and may, at any time and from time to time, suspend such
right of decrease or Redemption. The procedures for effecting decreases or
Redemptions shall be as determined by the Trustees from time to time.
ARTICLE VIII
Determination of Book Capital Account
Balances and Distributions
8.1. BOOK CAPITAL ACCOUNT BALANCES. The Book Capital Account balance of
each Holder shall be determined on such days and at such time or times as the
Trustees may determine. The Trustees shall adopt resolutions setting forth the
method of determining the Book Capital Account balance of each Holder. The power
and duty to make calculations pursuant to such resolutions may be delegated by
the Trustees to the Investment Adviser, Administrator, custodian, or such other
Person as the Trustees may determine. Upon the Redemption of an Interest, the
Holder of that Interest shall be entitled to receive the balance of its Book
Capital Account. A Holder may not transfer, sell or exchange its Book Capital
Account balance.
8.2. ALLOCATIONS AND DISTRIBUTIONS TO HOLDERS. The Trustees shall, in
compliance with the Code, the 1940 Act and generally accepted accounting
principles, establish the procedures by which the Trust shall make (i) the
allocation of unrealized gains and losses, taxable income and tax loss, and
profit and loss, or any item or items thereof, to each Holder, (ii) the payment
of distributions, if any, to Holders, and (iii) upon liquidation, the final
distribution of items of taxable income and expense. Such procedures shall be
set forth in writing and be furnished to the Trust's accountants. The Trustees
may amend the procedures adopted pursuant to this Section 8.2 from time to time.
The Trustees may retain from the net profits such amount as they may deem
necessary to pay the liabilities and expenses of the Trust, to meet obligations
of the Trust, and as they may deem desirable to use in the conduct of the
affairs of the Trust or to retain for future requirements or extensions of the
business.
8.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any of the
foregoing provisions of this Article VIII, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the net income
of the Trust, the allocation of income of the Trust, the Book Capital Account
balance of each Holder, or the payment of distributions to the Holders as they
may deem necessary or desirable to enable the Trust to comply with any provision
of the 1940 Act or any order of exemption issued by the Commission or with the
Code.
<PAGE>
ARTICLE IX
HOLDERS
9.1. RIGHTS OF HOLDERS. The ownership of the Trust Property and the right
to conduct any business described herein are vested exclusively in the Trustees,
and the Holders shall have no right or title therein other than the beneficial
interest conferred by their Interests and they shall have no power or right to
call for any partition or division of any Trust Property.
9.2. MEETINGS OF HOLDERS. Meetings of Holders may be called at any time by
a majority of the Trustees and shall be called by any Trustee upon written
request of Holders holding, in the aggregate, not less than 10% of the
Interests, such request specifying the purpose or purposes for which such
meeting is to be called. Any such meeting shall be held within or without the
State of New York and within or without the United States of America on such day
and at such time as the Trustees shall designate. Holders of one-third of the
Interests, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940
Act, other applicable law, this Declaration or the By-Laws of the Trust. If a
quorum is present at a meeting, an affirmative vote of the Holders present, in
person or by proxy, holding more than 50% of the total Interests of the Holders
present, either in person or by proxy, at such meeting constitutes the action of
the Holders, unless a greater number of affirmative votes is required by the
1940 Act, other applicable law, this Declaration or the By-Laws of the Trust.
All or any one of more Holders may participate in a meeting of Holders by means
of a conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other and participation
in a meeting by means of such communications equipment shall constitute presence
in person at such meeting.
9.3. NOTICE OF MEETINGS. Notice of each meeting of Holders, stating the
time, place and purposes of the meeting, shall be given by the Trustees by mail
to each Holder, at its registered address, mailed at least 10 days and not more
than 60 days before the meeting. Notice of any meeting may be waived in writing
by any Holder either before or after such meeting. The attendance of a Holder at
a meeting shall constitute a waiver of notice of such meeting except in the
situation in which a Holder attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting was
not lawfully called or convened. At any meeting, any business properly before
the meeting may be considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
9.4. RECORD DATE FOR MEETINGS, DISTRIBUTIONS, ETC. For the purpose of
determining the Holders who are entitled to notice of and to vote or act at any
meeting, including any adjournment thereof, or to participate in any
distribution, or for the purpose of any other action, the Trustees may from time
to time fix a date, not more than 90 days prior to the date of any meeting of
Holders or the payment of any distribution or the taking of any other action, as
the case may be, as a record date for the determination of the Persons to be
treated as Holders for such purpose. If the Trustees do not, prior to any
meeting of the Holders, so fix a record date, then the date of mailing notice of
the meeting shall be the record date.
9.5. PROXIES, ETC. At any meeting of Holders, any Holder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Secretary, or with such other
officer or agent of the Trust as the Secretary may direct, for verification
prior to the time at which such vote is to be taken. A proxy may be revoked by a
Holder at any time before it has been exercised by placing on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, a later dated proxy or written revocation. Pursuant to a resolution of a
majority of the Trustees, proxies may be solicited in the name of the Trust or
of one or more Trustees or of one or more officers of the Trust. Only Holders on
the record date shall be entitled to vote. Each such Holder shall be entitled to
a vote proportionate to its Interest. When an Interest is held jointly by
several Persons, any one of them may vote at any meeting in person or by proxy
in respect of such Interest, but if more than one of them is present at such
meeting in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Interest. A proxy purporting to be executed by or on behalf of a Holder
shall be deemed valid unless challenged at or prior to its exercise, and the
burden of proving invalidity shall rest on the challenger. No proxy shall be
valid after one year from the date of execution, unless a longer period is
expressly stated in such proxy. The Trust may also permit a Holder to authorize
and empower individuals named as proxies on any form of proxy solicited by the
Trustees to vote that Holder's Interest on any matter by recording his voting
instructions on any recording device maintained for that purpose by the Trust or
its agent, provided the Holder complies with such procedures as the Trustees may
designate to be necessary or appropriate to determine the authenticity of the
voting instructions so recorded; such instructions shall be deemed to constitute
a written proxy signed by the Holder and delivered to the Trust and shall be
deemed to be dated as of the date such instructions were transmitted, and the
Holder shall be deemed to have approved and ratified all actions taken by such
proxies in accordance with the voting instructions so recorded.
9.6. REPORTS. The Trustees shall cause to be prepared and furnished to each
Holder, at least annually as of the end of each Fiscal Year, a report of
operations containing a balance sheet and a statement of income of the Trust
prepared in conformity with generally accepted accounting principles and an
opinion of an independent public accountant on such financial statements. The
Trustees shall, in addition, furnish to each Holder at least semi-annually
interim reports of operations containing an unaudited balance sheet as of the
end of such period and an unaudited statement of income for the period from the
beginning of the then-current Fiscal Year to the end of such period.
9.7. INSPECTION OF RECORDS. The books and records of the Trust shall be
open to inspection by Holders during normal business hours for any purpose not
harmful to the Trust.
9.8. HOLDER ACTION BY WRITTEN CONSENT. Any action which may be taken by
Holders may be taken without a meeting if Holders holding more than 50% of all
Interests entitled to vote (or such larger proportion thereof as shall be
required by any express provision of this Declaration) consent to the action in
writing and the written consents are filed with the records of the meetings of
Holders. Such consents shall be treated for all purposes as a vote taken at a
meeting of Holders. Each such written consent shall be executed by or on behalf
of the Holder delivering such consent and shall bear the date of such execution.
No such written consent shall be effective to take the action referred to
therein unless, within one year of the earliest dated consent, written consents
executed by a sufficient number of Holders to take such action are filed with
the records of the meetings of Holders.
9.9. NOTICES. Any and all communications, including any and all notices to
which any Holder may be entitled, shall be deemed duly served or given if
mailed, postage prepaid, addressed to a Holder at its last known address as
recorded on the register of the Trust.
ARTICLE X
Duration; Termination;
AMENDMENT; MERGERS; ETC.
10.1. DURATION. Subject to possible termination or dissolution in
accordance with the provisions of Section 10.2 and Section 10.3 hereof,
respectively, the Trust created hereby shall continue until the expiration of 20
years after the death of the last survivor of the initial Trustees named herein
and the following named persons:
DATE OF
NAME ADDRESS BIRTH
Cassius Marcellus Cornelius 742 Old Dublin Road November 9, 1990
Clay Hancock, NH 03449
Sara Briggs Sullivan 1308 Rhodes Street September 17, 1990
Dubois, WY 82513
<PAGE>
Myles Bailey Rawson Winhall Hollow Road May 13, 1990
R.R. #1, Box 178B
Bondville, VT 05340
Zeben Curtis Kopchak Box 1126 October 31, 1989
Cordova, AK 99574
Landon Harris Clay 742 Old Dublin Road February 15, 1989
Hancock, NH 03449
Kelsey Ann Sullivan 1308 Rhodes Street May 1, 1988
Dubois, WY 82513
Carter Allen Rawson Winhall Hollow Road January 28, 1988
R.R. #1, Box 178B
Bondville, VT 05340
Obadiah Barclay Kopchak Box 1126 August 29, 1987
Cordova, AK 99574
Richard Tubman Clay 742 Old Dublin Road April 12, 1987
Hancock, NH 03449
Thomas Moragne Clay 742 Old Dublin Road April 11, 1985
Hancock, NH 03449
Zachariah Bishop Kopchak Box 1126 January 11, 1985
Cordova, AK 99574
Sager Anna Kopchak Box 1126 May 22, 1983
Cordova, AK 99574
10.2. TERMINATION.
(a) The Trust may be terminated (i) by the affirmative vote of Holders of
not less than two-thirds of all Interests at any meeting of Holders or by an
instrument in writing without a meeting, executed by a majority of the Trustees
and consented to by Holders of not less than two-thirds of all Interests, or
(ii) by the Trustees by written notice to the Holders. Upon any such
termination,
(i) the Trust shall carry on no business except for the purpose of
winding up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the Trust
and all of the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust have been wound up, including the power to
fulfill or discharge the contracts of the Trust, collect the assets of the
Trust, sell, convey, assign, exchange or otherwise dispose of all or any
part of the Trust Property to one or more Persons at public or private sale
for consideration which may consist in whole or in part of cash, securities
or other property of any kind, discharge or pay the liabilities of the
Trust, and do all other acts appropriate to liquidate the business of the
Trust; provided that any sale, conveyance, assignment, exchange or other
disposition of all or substantially all the Trust Property shall require
approval of the principal terms of the transaction and the nature and
amount of the consideration by the vote of Holders holding more than 50% of
all Interests; and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Holders according to their respective rights as set forth in the
procedures established pursuant to Section 8.2 hereof.
<PAGE>
(b) Upon termination of the Trust and distribution to the Holders as herein
provided, a majority of the Trustees shall execute and file with the records of
the Trust an instrument in writing setting forth the fact of such termination
and distribution. Upon termination of the Trust, the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and the rights and
interests of all Holders shall thereupon cease.
10.3. DISSOLUTION. Upon the bankruptcy of any Holder, or upon the
Redemption of any Interest, the Trust shall be dissolved effective 120 days
after the event. However, the Holders (other than such bankrupt or redeeming
Holder) may, by a majority affirmative vote at any meeting of such Holders or by
an instrument in writing without a meeting executed by a majority of the
Trustees and consented to by all such Holders, agree to continue the business of
the Trust even if there has been such a dissolution.
10.4. AMENDMENT PROCEDURE.
(a) This Declaration may be amended by the vote of Holders of more than 50%
of all Interests at any meeting of Holders or by an instrument in writing
without a meeting, executed by a majority of the Trustees and consented to by
the Holders of more than 50% of all Interests. Notwithstanding any other
provision hereof, this Declaration may be amended by an instrument in writing
executed by a majority of the Trustees, and without the vote or consent of
Holders, for any one or more of the following purposes: (i) to change the name
of the Trust, (ii) to supply any omission, or to cure, correct or supplement any
ambiguous, defective or inconsistent provision hereof, (iii) to conform this
Declaration to the requirements of applicable federal law or regulations or the
requirements of the applicable provisions of the Code, (iv) to change the state
or other jurisdiction designated herein as the state or other jurisdiction whose
law shall be the governing law hereof, (v) to effect such changes herein as the
Trustees find to be necessary or appropriate (A) to permit the filing of this
Declaration under the law of such state or other jurisdiction applicable to
trusts or voluntary associations, (B) to permit the Trust to elect to be treated
as a "regulated investment company" under the applicable provisions of the Code,
or (C) to permit the transfer of Interests (or to permit the transfer of any
other beneficial interest in or share of the Trust, however denominated), (vi)
in conjunction with any amendment contemplated by the foregoing clause (iv) or
the foregoing clause (v) to make any and all such further changes or
modifications to this Declaration as the Trustees find to be necessary or
appropriate, any finding of the Trustees referred to in the foregoing clause (v)
or the foregoing clause (vi) to be conclusively evidenced by the execution of
any such amendment by a majority of the Trustees, and (vii) change, modify or
rescind any provision of this Declaration provided such change, modification or
rescission is found by the Trustees to be necessary or appropriate and to not
have a materially adverse effect on the financial interests of the Holders, any
such finding to be conclusively evidenced by the execution of any such amendment
by a majority of the Trustees; provided, however, that unless effected in
compliance with the provisions of Section 10.4(b) hereof, no amendment otherwise
authorized by this sentence may be made which would reduce the amount payable
with respect to any Interest upon liquidation of the Trust and; provided,
further, that the Trustees shall not be liable for failing to make any amendment
permitted by this Section 10.4(a).
(b) No amendment may be made under Section 10.4(a) hereof which would
change any rights with respect to any Interest by reducing the amount payable
thereon upon liquidation of the Trust, except with the vote or consent of
Holders of two-thirds of all Interests.
(c) A certification in recordable form executed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted by the
Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when filed with the records of the
Trust.
Notwithstanding any other provision hereof, until such time as Interests
are first sold, this Declaration may be terminated or amended in any respect by
the affirmative vote of a majority of the Trustees at any meeting of Trustees or
by an instrument executed by a majority of the Trustees.
<PAGE>
10.5. MERGER, CONSOLIDATION AND SALE OF ASSETS. The Trust may merge or
consolidate with any other corporation, association, trust or other organization
or may sell, lease or exchange all or substantially all of the Trust Property,
including good will, upon such terms and conditions and for such consideration
when and as authorized at any meeting of Holders called for such purpose by a
Majority Interests Vote, and any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished under and
pursuant to the statutes of the State of New York.
10.6. INCORPORATION. Upon a Majority Interests Vote, the Trustees may cause
to be organized or assist in organizing a corporation or corporations under the
law of any jurisdiction or a trust, partnership, association or other
organization to take over the Trust Property or to carry on any business in
which the Trust directly or indirectly has any interest, and to sell, convey and
transfer the Trust Property to any such corporation, trust, partnership,
association or other organization in exchange for the equity interests thereof
or otherwise, and to lend money to, subscribe for the equity interests of, and
enter into any contract with any such corporation, trust, partnership,
association or other organization, or any corporation, trust, partnership,
association or other organization in which the Trust holds or is about to
acquire equity interests. The Trustees may also cause a merger or consolidation
between the Trust or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the extent permitted by
law. Nothing contained herein shall be construed as requiring approval of the
Holders for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property to one or
more of such organizations or entities.
ARTICLE XI
MISCELLANEOUS
11.1. GOVERNING LAW. This Declaration is executed by the Trustees and
delivered in the State of New York and with reference to the law thereof, and
the rights of all parties and the validity and construction of every provision
hereof shall be subject to and construed in accordance with the law of the State
of New York and reference shall be specifically made to the trust law of the
State of New York as to the construction of matters not specifically covered
herein or as to which an ambiguity exists.
11.2. COUNTERPARTS. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any one such original counterpart.
11.3. RELIANCE BY THIRD PARTIES. Any certificate executed by an individual
who, according to the records of the Trust or of any recording office in which
this Declaration may be recorded, appears to be a Trustee hereunder, certifying
to: (a) the number or identity of Trustees or Holders, (b) the due authorization
of the execution of any instrument or writing, (c) the form of any vote passed
at a meeting of Trustees or Holders, (d) the fact that the number of Trustees or
Holders present at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (e) the form of any By-Laws adopted by or the
identity of any officer elected by the Trustees, or (f) the existence of any
fact or facts which in any manner relate to the affairs of the Trust, shall be
conclusive evidence as to the matters so certified in favor of any Person
dealing with the Trustees.
11.4. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, or with other applicable law and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
<PAGE>
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
day and year first above written.
/s/ Edward K.Y. Chen /s/ Samuel L. Hayes, III
- ---------------------------------- ---------------------------------
Edward K.Y. Chen, as Trustee and Samuel L. Hayes, III, as Trustee and
not individually not individually
/s/ Donald R. Dwight /s/ Norton H. Reamer
- ---------------------------------- ---------------------------------
Donald R. Dwight, as Trustee and Norton H. Reamer, as Trustee and
not individually not individually
/s/ Robert Lloyd George /s/ John L. Thorndike
- ---------------------------------- ---------------------------------
Robert Lloyd George, as Trustee and John L. Thorndike, as Trustee and
not individually not individually
/s/ James B. Hawkes /s/ Jack L. Treynor
- ---------------------------------- ---------------------------------
James B. Hawkes, as Trustee and Jack L. Treynor, as Trustee and
not individually not individually
RUSSIA AND EASTERN EUROPE PORTFOLIO
BY-LAWS
As Adopted October 17, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -- MEETINGS OF HOLDERS .............................................1
-------------------
Section 1.1 Records at Holder Meetings ...............1
Section 1.2 Inspectors of Election ...................1
ARTICLE II -- OFFICERS .......................................................2
Section 2.1 Officers of the Trust ....................2
Section 2.2 Election and Tenure ......................2
Section 2.3 Removal of Officers ......................2
Section 2.4 Bonds and Surety .........................2
Section 2.5 Chairman, President and Vice Presidents ...2
Section 2.6 Secretary ................................3
Section 2.7 Treasurer ................................3
Section 2.8 Other Officers and Duties ................3
ARTICLE III -- MISCELLANEOUS .................................................4
Section 3.1 Depositories .............................4
Section 3.2 Signatures ...............................4
Section 3.3 Seal ......................................4
Section 3.4 Indemnification ..........................4
Section 3.5 Distribution Disbursing Agents and the
Like ..................................4
ARTICLE IV -- REGULATIONS; AMENDMENT OF BY-LAWS ..............................4
---------------------------------
Section 4.1 Regulations ..............................4
Section 4.2 Amendment and Repeal of By-Laws ..........5
i
<PAGE>
BY-LAWS
OF
RUSSIA AND EASTERN EUROPE PORTFOLIO
These By-Laws are made and adopted pursuant to Section 2.7 of the
Declaration of Trust establishing RUSSIA AND EASTERN EUROPE PORTFOLIO (the
"Trust"), dated October 17, 1997, as from time to time amended (the
"Declaration"). All words and terms capitalized in these By-Laws shall have the
meaning or meanings set forth for such words or terms in the Declaration.
ARTICLE I
MEETINGS OF HOLDERS
Section 1.1. RECORDS AT HOLDER MEETINGS. At each meeting of the Holders
there shall be open for inspection the minutes of the last previous meeting of
Holders of the Trust and a list of the Holders of the Trust, certified to be
true and correct by the Secretary or other proper agent of the Trust, as of the
record date of the meeting. Such list of Holders shall contain the name of each
Holder in alphabetical order and the address and Interest owned by such Holder
on such record date.
Section 1.2. INSPECTORS OF ELECTION. In advance of any meeting of the
Holders, the Trustees may appoint Inspectors of Election to act at the meeting
or any adjournment thereof. If Inspectors of Election are not so appointed, the
chairman, if any, of any meeting of the Holders may, and on the request of any
Holder or his proxy shall, appoint Inspectors of Election. The number of
Inspectors of Election shall be either one or three. If appointed at the meeting
on the request of one or more Holders or proxies, a Majority Interests Vote
shall determine whether one or three Inspectors of Election are to be appointed,
but failure to allow such determination by the Holders shall not affect the
validity of the appointment of Inspectors of Election. In case any individual
appointed as an Inspector of Election fails to appear or fails or refuses to so
act, the vacancy may be filled by appointment made by the Trustees in advance of
the convening of the meeting or at the meeting by the individual acting as
chairman of the meeting. The Inspectors of Election shall determine the Interest
owned by each Holder, the Interests represented at the meeting, the existence of
a quorum, the authenticity, validity and effect of proxies, shall receive votes,
ballots or consents, shall hear and determine all challenges and questions in
any way arising in connection with the right to vote, shall count and tabulate
all votes or consents, shall determine the results, and shall do such other acts
as may be proper to conduct the election or vote with fairness to all Holders.
If there are three Inspectors of Election, the decision, act or certificate of a
majority is effective in all respects as the decision, act or certificate of
all. On request of the chairman, if any, of the meeting, or of any Holder or its
proxy, the Inspectors of Election shall make a report in writing of any
challenge or question or matter determined by them and shall execute a
certificate of any facts found by them.
ARTICLE II
OFFICERS
Section 2.1. OFFICERS OF THE TRUST. The officers of the Trust shall consist
of a Chairman, if any, a President, a Secretary, a Treasurer and such other
officers or assistant officers, including Vice Presidents, as may be elected by
the Trustees. Any two or more of the offices may be held by the same individual.
The Trustees may designate a Vice President as an Executive Vice President and
may designate the order in which the other Vice Presidents may act. The Chairman
shall be a Trustee, but no other officer of the Trust, including the President,
need be a Trustee.
<PAGE>
Section 2.2. ELECTION AND TENURE. At the initial organization meeting and
thereafter at each annual meeting of the Trustees, the Trustees shall elect the
Chairman, if any, the President, the Secretary, the Treasurer and such other
officers as the Trustees shall deem necessary or appropriate in order to carry
out the business of the Trust. Such officers shall hold office until the next
annual meeting of the Trustees and until their successors have been duly elected
and qualified. The Trustees may fill any vacancy in office or add any additional
officer at any time.
Section 2.3. REMOVAL OF OFFICERS. Any officer may be removed at any time,
with or without cause, by action of a majority of the Trustees. This provision
shall not prevent the making of a contract of employment for a definite term
with any officer and shall have no effect upon any cause of action which any
officer may have as a result of removal in breach of a contract of employment.
Any officer may resign at any time by notice in writing signed by such officer
and delivered or mailed to the Chairman, if any, the President or the Secretary,
and such resignation shall take effect immediately, or at a later date according
to the terms of such notice in writing.
Section 2.4. BONDS AND SURETY. Any officer may be required by the Trustees
to be bonded for the faithful performance of his duties in such amount and with
such sureties as the Trustees may determine.
Section 2.5. CHAIRMAN, PRESIDENT AND VICE PRESIDENTS. The Chairman, if any,
shall, if present, preside at all meetings of the Holders and of the Trustees
and shall exercise and perform such other powers and duties as may be from time
to time assigned to him by the Trustees. Subject to such supervisory powers, if
any, as may be given by the Trustees to the Chairman, if any, the President
shall be the chief executive officer of the Trust and, subject to the control of
the Trustees, shall have general supervision, direction and control of the
business of the Trust and of its employees and shall exercise such general
powers of management as are usually vested in the office of President of a
corporation. In the absence of the Chairman, if any, the President shall preside
at all meetings of the Holders and, in the absence of the Chairman, the
President shall preside at all meetings of the Trustees. The President shall be,
ex officio, a member of all standing committees of Trustees. Subject to the
direction of the Trustees, the President shall have the power, in the name and
on behalf of the Trust, to execute any and all loan documents, contracts,
agreements, deeds, mortgages and other instruments in writing, and to employ and
discharge employees and agents of the Trust. Unless otherwise directed by the
Trustees, the President shall have full authority and power to attend, to act
and to vote, on behalf of the Trust, at any meeting of any business organization
in which the Trust holds an interest, or to confer such powers upon any other
person, by executing any proxies duly authorizing such person. The President
shall have such further authorities and duties as the Trustees shall from time
to time determine. In the absence or disability of the President, the Vice
Presidents in order of their rank or the Vice President designated by the
Trustees, shall perform all of the duties of the President, and when so acting
shall have all the powers of and be subject to all of the restrictions upon the
President. Subject to the direction of the President, each Vice President shall
have the power in the name and on behalf of the Trust to execute any and all
loan documents, contracts, agreements, deeds, mortgages and other instruments in
writing, and, in addition, shall have such other duties and powers as shall be
designated from time to time by the Trustees or by the President.
Section 2.6. SECRETARY. The Secretary shall keep the minutes of all
meetings of, and record all votes of, Holders, Trustees and the Executive
Committee, if any. The results of all actions taken at a meeting of the
Trustees, or by written consent of the Trustees, shall be recorded by the
Secretary. The Secretary shall be custodian of the seal of the Trust, if any,
and (and any other person so authorized by the Trustees) shall affix the seal
or, if permitted, a facsimile thereof, to any instrument executed by the Trust
which would be sealed by a New York corporation executing the same or a similar
instrument and shall attest the seal and the signature or signatures of the
officer or officers executing such instrument on behalf of the Trust. The
Secretary shall also perform any other duties commonly incident to such office
in a New York corporation, and shall have such other authorities and duties as
the Trustees shall from time to time determine.
<PAGE>
Section 2.7. TREASURER. Except as otherwise directed by the Trustees, the
Treasurer shall have the general supervision of the monies, funds, securities,
notes receivable and other valuable papers and documents of the Trust, and shall
have and exercise under the supervision of the Trustees and of the President all
powers and duties normally incident to his office. The Treasurer may endorse for
deposit or collection all notes, checks and other instruments payable to the
Trust or to its order and shall deposit all funds of the Trust as may be ordered
by the Trustees or the President. The Treasurer shall keep accurate account of
the books of the Trust's transactions which shall be the property of the Trust,
and which together with all other property of the Trust in his possession, shall
be subject at all times to the inspection and control of the Trustees. Unless
the Trustees shall otherwise determine, the Treasurer shall be the principal
accounting officer of the Trust and shall also be the principal financial
officer of the Trust. The Treasurer shall have such other duties and authorities
as the Trustees shall from time to time determine. Notwithstanding anything to
the contrary herein contained, the Trustees may authorize the Investment Adviser
or the Administrator to maintain bank accounts and deposit and disburse funds on
behalf of the Trust.
Section 2.8. OTHER OFFICERS AND DUTIES. The Trustees may elect such other
officers and assistant officers as they shall from time to time determine to be
necessary or desirable in order to conduct the business of the Trust. Assistant
officers shall act generally in the absence of the officer whom they assist and
shall assist that officer in the duties of his office. Each officer, employee
and agent of the Trust shall have such other duties and authorities as may be
conferred upon him by the Trustees or delegated to him by the President.
ARTICLE III
MISCELLANEOUS
Section 3.1. DEPOSITORIES. The funds of the Trust shall be deposited in
such depositories as the Trustees shall designate and shall be drawn out on
checks, drafts or other orders signed by such officer, officers, agent or agents
(including the Investment Adviser or the Administrator) as the Trustees may from
time to time authorize.
Section 3.2. SIGNATURES. All contracts and other instruments shall be
executed on behalf of the Trust by such officer, officers, agent or agents as
provided in these By-Laws or as the Trustees may from time to time by resolution
provide.
Section 3.3. SEAL. The seal of the Trust, if any, may be affixed to any
document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a New York corporation.
Section 3.4. INDEMNIFICATION. Insofar as the conditional advancing of
indemnification monies under Section 5.4 of the Declaration for actions based
upon the 1940 Act may be concerned, such payments will be made only on the
following conditions: (i) the advances must be limited to amounts used, or to be
used, for the preparation or presentation of a defense to the action, including
costs connected with the preparation of a settlement; (ii) advances may be made
only upon receipt of a written promise by, or on behalf of, the recipient to
repay the amount of the advance which exceeds the amount to which it is
ultimately determined that he is entitled to receive from the Trust by reason of
indemnification; and (iii) (a) such promise must be secured by a surety bond,
other suitable insurance or an equivalent form of security which assures that
any repayment may be obtained by the Trust without delay or litigation, which
bond, insurance or other form of security must be provided by the recipient of
the advance, or (b) a majority of a quorum of the Trust's disinterested,
non-party Trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that the recipient of
the advance ultimately will be found entitled to indemnification.
<PAGE>
Section 3.5. DISTRIBUTION DISBURSING AGENTS AND THE LIKE. The Trustees
shall have the power to employ and compensate such distribution disbursing
agents, warrant agents and agents for the reinvestment of distributions as they
shall deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.
ARTICLE IV
REGULATIONS; AMENDMENT OF BY-LAWS
Section 4.1. REGULATIONS. The Trustees may make such additional rules and
regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the sale and purchase of Interests of the Trust.
Section 4.2. AMENDMENT AND REPEAL OF BY-LAWS. In accordance with Section
2.7 of the Declaration, the Trustees shall have the power to alter, amend or
repeal the By-Laws or adopt new By-Laws at any time. Action by the Trustees with
respect to the By-Laws shall be taken by an affirmative vote of a majority of
the Trustees. The Trustees shall in no event adopt By-Laws which are in conflict
with the Declaration.
The Declaration refers to the Trustees as Trustees, but not as individuals
or personally; and no Trustee, officer, employee or agent of the Trust shall be
held to any personal liability, nor shall resort be had to their private
property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust.
* * *
RUSSIA AND EASTERN EUROPE PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 17th day of November, 1997 between Russia and Eastern
Europe Portfolio, a New York trust (the "Trust"), and Lloyd George Investment
Management (Bermuda) Limited, a Bermuda corporation (the "Adviser").
1. DUTIES OF THE ADVISER. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust, subject to the supervision of the Trustees of the Trust,
for the period and on the terms set forth in this Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Trust and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust
and to pay the salaries and fees of all officers and Trustees of the Trust who
are members of the Adviser's organization and all personnel of the Adviser
performing services relating to research and investment activities. The Adviser
shall for all purposes herein be deemed to be an independent contractor and
shall, except as otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent of
the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Trust's investments. As investment adviser to the Trust, the
Adviser shall furnish continuously an investment program and shall determine
from time to time what securities shall be acquired, disposed of or exchanged
and what portion of the Trust's assets shall be held uninvested, subject always
to the applicable restrictions of the Declaration of Trust, By-Laws and
registration statement of the Trust under the Investment Company Act of 1940,
all as from time to time amended. Should the Trustees of the Trust at any time,
however, make any specific determination as to investment policy for the Trust
and notify the Adviser thereof in writing, the Adviser shall be bound by such
determination for the period, if any, specified in such notice or until
similarly notified that such determination has been revoked. The Adviser shall
take, on behalf of the Trust, all actions which it deems necessary or desirable
to implement the investment policies of the Trust.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Trust either directly with the issuer or with
brokers or dealers selected by the Adviser, and to that end the Adviser is
authorized as the agent of the Trust to give instructions to the custodian of
the Trust as to deliveries of securities and payments of cash for the account of
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall use its best efforts to seek to
execute security transactions at prices which are advantageous to the Trust and
(when a disclosed commission is being charged) at reasonably competitive
commission rates. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Adviser and the Adviser is expressly
authorized to pay any broker or dealer who provides such brokerage and research
services a commission for executing a security transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which the Adviser
and its affiliates have with respect to accounts over which they exercise
investment discretion. Subject to the requirement set forth in the second
sentence of this paragraph, the Adviser is authorized to consider, as a factor
in the selection of any broker or dealer with whom purchase or sale orders may
be placed, the fact that such broker or dealer has sold or is selling shares of
one or more investment companies sponsored by the Adviser or its affiliates or
shares of any other investment company or series thereof that invests
substantially all of its assets in the Trust.
The Adviser shall not be responsible for providing certain special
administrative services to the Trust under this Agreement. Eaton Vance
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement with the Administrator.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Adviser shall be entitled to
receive from the Trust, a monthly advisory fee computed by applying the annual
asset rate applicable to that portion of the average daily net assets of the
Trust throughout the month in each Category as indicated below:
ANNUAL
CATEGORY AVERAGE DAILY NET ASSETS ASSET RATE
1 less than $500 million 0.75%
2 $500 million but less than $1 billion 0.70%
3 $1 billion but less than $1.5 billion 0.65%
4 $1.5 billion but less than $2 billion 0.60%
5 $2 billion but less than $3 billion 0.55%
6 $3 billion and over 0.50%
Such advisory fee shall be paid monthly in arrears on the last business day of
each month. The Trust's daily net assets shall be computed in accordance with
the Declaration of Trust of the Trust and any applicable votes and
determinations of the Trustees of the Trust. In case of initiation or
termination of the Agreement during any month, the fee for that month shall be
based on the number of calendar days during which it is in effect.
The Adviser may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation, (i) expenses of maintaining the Trust and continuing its existence,
(ii) registration of the Trust under the Investment Company Act of 1940, (iii)
commissions, fees and other expenses connected with the acquisition, holding and
disposition of securities and other investments, (iv) auditing, accounting and
legal expenses, (v) taxes and interest, (vi) governmental fees, (vii) expenses
of issue, sale and redemption of Interests in the Trust, (viii) expenses of
registering and qualifying the Trust and Interests in the Trust under federal
and state securities laws and of preparing and printing registration statements
or other offering documents or memoranda for such purposes and for distributing
the same to Holders and investors, and fees and expenses of registering and
maintaining registrations of the Trust and of the Trust's placement agent as
broker-dealer or agent under state securities laws, (ix) expenses of reports and
notices to Holders and of meetings of Holders and proxy solicitations therefor,
(x) expenses of reports to governmental officers and commissions, (xi) insurance
expenses, (xii) association membership dues, (xiii) fees, expenses and
disbursements of custodians and subcustodians for all services to the Trust
(including without limitation safekeeping of funds, securities and other
investments, keeping of books, accounts and records, and determination of net
asset values, book capital account balances and tax capital account balances),
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, Holder servicing agents and registrars for all services to the Trust,
(xv) expenses for servicing the accounts of Holders, (xvi) any direct charges to
Holders approved by the Trustees of the Trust, (xvii) compensation and expenses
of Trustees of the Trust who are not members of the Adviser's organization,
(xviii) the administration fees payable by the Trust under any administration or
similar agreement to which the Trust is a party, and (xvix) such non-recurring
items as may arise, including expenses incurred in connection with litigation,
proceedings and claims and the obligation of the Trust to indemnify its
Trustees, officers and Holders with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees and officers of the
Trust and Holders of Interests in the Trust are or may be or become interested
in the Adviser as directors, officers, employees, shareholders or otherwise and
that directors, officers, employees and shareholders of the Adviser are or may
be or become similarly interested in the Trust, and that the Adviser may be or
become interested in the Trust as a Holder or otherwise. It is also understood
that directors, officers, employees and shareholders of the Adviser may be or
become interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and that the Adviser or its subsidiaries
or affiliates may enter into advisory or management agreements or other
contracts or relationships with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any Holder of Interests in the
Trust for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses which may be sustained in the acquisition,
holding or disposition of any security or other investment.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such investment adviser
and approved by the Trustees of the Trust, all as permitted by the Investment
Company Act of 1940.
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including February
28, 1999 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1999 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust cast in person at a meeting called for the purpose
of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of the Trustees of the Trust or the directors of the Adviser,
as the case may be, and the Trust may, at any time upon such written notice to
the Adviser, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Trust. This Agreement shall terminate automatically in
the event of its assignment.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust (Sections 5.2 and 5.6)
limiting the personal liability of the Trustees and officers of the Trust, and
the Adviser hereby agrees that it shall have recourse to the Trust for payment
of claims or obligations as between the Trust and the Adviser arising out of
this Agreement and shall not seek satisfaction from any Trustee or officer of
the Trust.
10. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of Holders, of
the lesser of (a) 67 per centum or more of the Interests in the Trust present or
represented by proxy at the meeting if the Holders of more than 50 per centum of
the outstanding Interests in the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the outstanding Interests in the
Trust. The terms "Holders" and "Interests" when used herein shall have the
respective meanings specified in the Declaration of Trust of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
RUSSIA AND EASTERN EUROPE PORTFOLIO
By: /s/ James B. Hawkes
----------------------------------
Vice President
LLOYD GEORGE INVESTMENT MANAGEMENT
(BERMUDA) LIMITED
By: /s/ Robert Lloyd George
---------------------------------
President
PLACEMENT AGENT AGREEMENT
November 17, 1997
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, Massachusetts 02110
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Russia and Eastern Europe Portfolio (the "Trust"),
an open-end diversified management investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), organized as a New
York trust, has agreed that Eaton Vance Distributors, Inc. ("EVD"), shall be the
placement agent (the "Placement Agent") of Interests in the Trust ("Trust
Interests").
1. SERVICES AS PLACEMENT AGENT.
1.1 EVD will act as Placement Agent of the Trust Interests covered by the
Trust's registration statement then in effect under the 1940 Act. In acting as
Placement Agent under this Placement Agent Agreement, neither EVD nor its
employees or any agents thereof shall make any offer or sale of Trust Interests
in a manner which would require the Trust Interests to be registered under the
Securities Act of 1933, as amended (the "1933 Act").
1.2 All activities by EVD and its agents and employees as Placement Agent
of Trust Interests shall comply with all applicable laws, rules and regulations,
including, without limitation, all rules and regulations adopted pursuant to the
1940 Act by the Securities and Exchange Commission (the "Commission").
1.3 Nothing herein shall be construed to require the Trust to accept any
offer to purchase any Trust Interests, all of which shall be subject to approval
by the Board of Trustees.
1.4 The Trust shall furnish from time to time for use in connection with
the sale of Trust Interests such information with respect to the Trust and Trust
Interests as EVD may reasonably request. The Trust shall also furnish EVD upon
request with: (a) unaudited semiannual statements of the Trust's books and
accounts prepared by the Trust, and (b) from time to time such additional
information regarding the Trust's financial or regulatory condition as EVD may
reasonably request.
1.5 The Trust represents to EVD that all registration statements filed by
the Trust with the Commission under the 1940 Act with respect to Trust Interests
have been prepared in conformity with the requirements of such statute and the
rules and regulations of the Commission thereunder. As used in this Agreement
the term "registration statement" shall mean any registration statement filed
with the Commission as modified by any amendments thereto that at any time shall
have been filed with the Commission by or on behalf of the Trust. The Trust
represents and warrants to EVD that any registration statement will contain all
statements required to be stated therein in conformity with both such statute
and the rules and regulations of the Commission; that all statements of fact
contained in any registration statement will be true and correct in all material
respects at the time of filing of such registration statement or amendment
thereto; and that no registration statement will include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading to a purchaser of
Trust Interests. The Trust may but shall not be obligated to propose from time
to time such amendment to any registration statement as in the light of future
developments may, in the opinion of the Trust's counsel, be necessary or
advisable. If the Trust shall not propose such amendment and/or supplement
within fifteen days after receipt by the Trust of a written request from EVD to
do so, EVD may, at its option, terminate this Agreement. The Trust shall not
file any amendment to any registration statement without giving EVD reasonable
notice thereof in advance; provided, however, that nothing contained in this
Agreement shall in any way limit the Trust's right to file at any time such
amendment to any registration statement as the Trust may deem advisable, such
right being in all respects absolute and unconditional.
1.6 The Trust agrees to indemnify, defend and hold EVD, its several
officers and directors, and any person who controls EVD within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities and Exchange Act of
1934 (the "1934 Act") (for purposes of this paragraph 1.6, collectively,
"Covered Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933 Act, the
1934 Act, common law or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material ("Offering Material") or arising
out of or based on any omission to state a material fact required to be stated
in any Offering Material or necessary to make the statements in any Offering
Material not misleading; provided, however, that the Trust's agreement to
indemnify Covered Persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any financial and other statements as are
furnished in writing to the Trust by EVD in its capacity as Placement Agent for
use in the answers to any items of any registration statement or in any
statements made in any Offering Material, or arising out of or based on any
omission or alleged omission to state a material fact in connection with the
giving of such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Trust's agreement
to indemnify EVD and the Trust's representations and warranties hereinbefore set
forth in this paragraph 1.6 shall not be deemed to cover any liability to the
Trust or its investors to which a Covered Person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of a Covered Person's reckless disregard of its
obligations and duties under this Agreement. The Trust should be notified of any
action brought against a Covered Person, such notification to be given by a
writing addressed to the Trust, 24 Federal Street Boston, Massachusetts 02110,
with a copy to the Administrator of the Trust, Eaton Vance Management, at the
same address, promptly after the summons or other first legal process shall have
been duly and completely served upon such Covered Person. The failure to so
notify the Trust of any such action shall not relieve the Trust from any
liability except to the extent the Trust shall have been prejudiced by such
failure, or from any liability that the Trust may have to the Covered Person
against whom such action is brought by reason of any such untrue statement or
omission, otherwise than on account of the Trust's indemnity agreement contained
in this paragraph. The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but in such case such
defense shall be conducted by counsel of good standing chosen by the Trust and
approved by EVD, which approval shall not be unreasonably withheld. In the event
the Trust elects to assume the defense of any such suit and retain counsel of
good standing approved by EVD, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Trust does not elect to assume the defense of any such suit or
in case EVD reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Covered Person named as defendant in such suit, for the
fees and expenses of any counsel retained by EVD or it. The Trust's
indemnification agreement contained in this paragraph and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Trust Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify EVD promptly of the commencement of any
litigation or proceedings against the Trust or any of its officers or Trustees
in connection with the issue and sale of any Trust Interests.
1.7 EVD agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this paragraph 1.7, collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
EVD in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any other
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by EVD to
the Trust required to be stated in such answers or necessary to make such
information not misleading. EVD shall be notified of any action brought against
a Covered Person, such notification to be given by a writing addressed to EVD at
24 Federal Street, Boston, Massachusetts 02110, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. EVD shall have the right of first control of the defense of the
action with counsel of its own choosing satisfactory to the Trust if such action
is based solely on such alleged misstatement or omission on EVD's part, and in
any other event each Covered Person shall have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify EVD of any such action shall not relieve EVD from any liability except to
the extent the Trust shall have been prejudiced by such failure, or from any
liability that EVD may have to Covered Persons by reason of any such untrue or
alleged untrue statement, or omission or alleged omission, otherwise than on
account of EVD's indemnity agreement contained in this paragraph.
1.8 No Trust Interests shall be offered by either EVD or the Trust under
any of the provisions of this Agreement and no orders for the purchase or sale
of Trust Interests hereunder shall be accepted by the Trust if and so long as
the effectiveness of the registration statement or any necessary amendments
thereto shall be suspended under any of the provisions of the 1933 Act or the
1940 Act; provided, however, that nothing contained in this paragraph shall in
any way restrict or have an application to or bearing on the Trust's obligation
to redeem Trust Interests from any investor in accordance with the provisions of
the Trust's registration statement or Declaration of Trust, as amended from time
to time.
1.9 The Trust agrees to advise EVD as soon as reasonably practical by a
notice in writing delivered to EVD or its counsel:
(a) of any request by the Commission for amendments to the registration
statement then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect or the
initiation by service of process on the Trust of any proceeding for that
purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that requires
the making of a change in such registration statement in order to make the
statements therein not misleading; and
(d) of all action of the Commission with respect to any amendment to any
registration statement that may from time to time be filed with the Commission.
For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.10 EVD agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where EVD may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
<PAGE>
2. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon the date of its execution, and,
unless terminated as herein provided, shall remain in full force and effect
through and including February 28, 1999 and shall continue in full force and
effect indefinitely thereafter, but only so long as such continuance after
February 28, 1999 is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Trust and (ii) by the vote of a majority of those Trustees of
the Trust who are not interested persons of EVD or the Trust cast in person at a
meeting called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the Directors of EVD, as the case
may be, and the Trust may, at any time upon such written notice to EVD,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
3. REPRESENTATIONS AND WARRANTIES.
EVD and the Trust each hereby represents and warrants to the other that it
has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
4. LIMITATION OF LIABILITY.
EVD expressly acknowledges the provision in the Declaration of Trust of the
Trust (Sections 5.2 and 5.6) limiting the personal liability of the Trustees and
officers of the Trust, and EVD hereby agrees that it shall have recourse to the
Trust for payment of claims or obligations as between the Trust and EVD arising
out of this Agreement and shall not seek satisfaction from any Trustee or
officer of the Trust.
5. CERTAIN DEFINITIONS.
The terms "assignment" and "interested persons" when used herein shall have
the respective meanings specified in the Investment Company Act of 1940 as now
in effect or as hereafter amended subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission by any rule, regulation or
order. The term "vote of a majority of the outstanding voting securities" shall
mean the vote, at a meeting of Holders, of the lesser of (a) 67 per centum or
more of the Interests in the Trust present or represented by proxy at the
meeting if the Holders of more than 50 per centum of the outstanding Interests
in the Trust are present or represented by proxy at the meeting, or (b) more
than 50 per centum of the outstanding Interests in the Trust. The terms
"Holders" and "Interests" when used herein shall have the respective meanings
specified in the Declaration of Trust of the Trust.
6. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.
This Agreement shall be subject to all applicable provisions of law,
including the applicable provisions of the 1940 Act and to the extent that any
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control.
The laws of the Commonwealth of Massachusetts shall, except to the extent
that any applicable provisions of federal law shall be controlling, govern the
construction, validity and effect of this Agreement, without reference to
principles of conflicts of law.
<PAGE>
If the contract set forth herein is acceptable to you, please so indicate
by executing the enclosed copy of this Agreement and returning the same to the
undersigned, whereupon this Agreement shall constitute a binding contract
between the parties hereto effective at the closing of business on the date
hereof.
Yours very truly,
RUSSIA AND EASTERN EUROPE PORTFOLIO
By: /s/ James B. Hawkes
----------------------------
James B. Hawkes
Vice President
Accepted:
EATON VANCE DISTRIBUTORS, INC.
By: /s/ Alan R. Dynner
-------------------------------
Alan R. Dynner
Vice President
CUSTODIAN AGREEMENT
between
ASIAN SMALL COMPANIES PORTFOLIO et al
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions..............................................................1-3
2. Employment of Custodian and Property to be Held by it......................3
3. Duties of the Custodian with Respect to Property of the Trust..............4
A. Safekeeping and Holding of Property....................................4
B. Delivery of Securities...............................................4-7
C. Registration of Securities.............................................7
D. Bank Accounts........................................................7-8
E. Payments for Interests, or Increases in Interests, in the Trust........8
F. Investment and Availability of Federal Funds...........................8
G. Collections..........................................................8-9
H. Payment of Trust Monies.............................................9-11
I. Liability for Payment in Advance of Receipt of Securities Purchased...11
J. Payments for Repurchases or Redemptions of Interests of the Trust.....11
K. Appointment of Agents by the Custodian.............................11-12
L. Deposit of Trust Portfolio Securities in Securities Systems........12-14
M. Deposit of Trust Commercial Paper in an Approved Book-Entry System
for Commercial Paper.............................................14-16
N. Segregated Account.................................................16-17
O. Ownership Certificates for Tax Purposes...............................17
P. Proxies...............................................................17
Q. Communications Relating to Trust Portfolio Securities.................17
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<PAGE>
R. Exercise of Rights; Tender Offers.................................17-18
S. Depository Receipts...................................................18
T. Interest Bearing Call or Time Deposits.............................18-19
U. Options, Futures Contracts and Foreign Currency Transactions.......19-21
V. Actions Permitted Without Express Authority...........................21
4. Duties of Bank with Respect to Books of Account and Calculations of
Net Asset Value........................................................21-22
5. Records and Miscellaneous Duties.......................................22-23
6. Opinion of Trust's Independent Public Accountants.........................23
7. Compensation and Expenses of Bank.........................................23
8. Responsibility of Bank.................................................23-24
9. Persons Having Access to Assets of the Trust..............................24
10. Effective Period, Termination and Amendment; Successor Custodian.......24-25
11. Interpretive and Additional Provisions.................................25-26
12. Notices...................................................................26
13. Massachusetts Law to Apply................................................26
14. Adoption of the Agreement by the Trust....................................26
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<PAGE>
CUSTODIAN AGREEMENT
This Agreement is made between Asian Small Companies Portfolio and each of
the investment companies listed on Schedule A attached hereto, each of which has
adopted this Agreement in the manner provided herein and Investors Bank & Trust
Company (hereinafter called "Bank", "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Trust" shall mean the investment company which has adopted this
Agreement.
(b) "Board" shall mean the board of trustees of the Trust.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has
been specifically approved as a securities depository for the Trust by the
Board.
(d) "Participants Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has
been specifically approved as a securities depository for the Trust by the
Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934 which acts as a securities
depository BUT ONLY if the Custodian has received a certified copy of a
resolution of the Board approving such clearing agency as a securities
depository for the Trust.
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<PAGE>
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O
of Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and
the book-entry regulations of federal agencies substantially in the form of
Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under
the Investment Company Act of 1940 for foreign securities BUT ONLY if the
Custodian has received a certified copy of a resolution of the Board
approving such depository or clearing agency as a foreign securities
depository for the Trust.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant
to Section 2 hereof for the holding of commercial paper in book-entry form
BUT ONLY if the Custodian has received a certified copy of a resolution of
the Board approving the participation by the Trust in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this
Agreement upon receipt of written or facsimile instructions signed by such
one or more person or persons as the Board shall have from time to time
authorized to give the particular class of instructions in question.
Different persons may be authorized to give instructions for different
purposes. A certified copy of a resolution of the Board may be received and
accepted by the Custodian as conclusive evidence of the authority of any
such person to act and may be considered as in full force and effect until
receipt of written notice to the contrary. Such instructions may be general
or specific in terms and, where appropriate, may be standing instructions.
Unless the resolution delegating authority to any person or persons to give
a particular class of instructions specifically requires that the approval
of any person, persons or committee shall first have been obtained before
the Custodian may act on instructions of that class, the Custodian shall be
under no obligation to question the right of the person or persons giving
such instructions in so doing. Oral instructions will be considered proper
instructions if the Custodian reasonably believes them to have been given
by a person authorized to give such instructions with respect to the
transaction involved. The Trust shall cause all oral instructions to be
confirmed in writing. The Trust authorizes the Custodian to tape record any
and all telephonic or other oral instructions given to the Custodian. Upon
receipt of a certificate signed by two officers of the Trust as to the
authorization by the President and the Treasurer of the Trust accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Trust, "proper instructions" may also
include communications effected directly between electromechanical or
electronic devices provided that the President and Treasurer of the Trust
and the Custodian are satisfied that such procedures afford adequate
safeguards for the Trust's assets. In performing its duties generally, and
more particularly in connection with the purchase, sale and exchange of
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<PAGE>
securities made by or for the Trust, the Custodian may take cognizance
of the provisions of the governing documents and registration statement of
the Trust as the same may from time to time be in effect (and resolutions
or proceedings of the holders of interests in the Trust or the Board), but,
nevertheless, except as otherwise expressly provided herein, the Custodian
may assume unless and until notified in writing to the contrary that
so-called proper instructions received by it are not in conflict with or in
any way contrary to any provisions of such governing documents and
registration statement, or resolutions or proceedings of the holders of
interests in the Trust or the Board.
(j) The term "Vote" when used with respect to the Board or the Holders
of Interests in the Trust shall include a vote, resolution, consent,
proceeding and other action taken by the Board or Holders in accordance
with the Declaration of Trust or By-Laws of the Trust.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Trust agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Trust from time to time, and the cash
consideration received by it from time to time in exchange for an interest in
the Trust or for an increase in such an interest. The Custodian shall not be
responsible for any property of the Trust held by the Trust and not delivered by
the Trust to the Custodian. The Trust will also deliver to the Bank from time to
time copies of its currently effective declaration of trust, by-laws,
registration statement and placement agent agreement with its placement agent,
together with such resolutions, and other proceedings of the Trust as may be
necessary for or convenient to the Bank in the performance of its duties
hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Trust held by such subcustodian. Any
foreign subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the foreign custody arrangements shall be approved by the Board
and shall be in accordance with and subject to the provisions of said Rule. For
the purposes of this Agreement, any property of the Trust held by any such
subcustodian (domestic or foreign) shall be deemed to be held by the Custodian
under the terms of this Agreement.
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<PAGE>
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely
all property of the Trust and on behalf of the Trust shall from time to
time receive delivery of Trust property for safekeeping. The Custodian
shall hold, earmark and segregate on its books and records for the account
of the Trust all property of the Trust, including all securities,
participation interests and other assets of the Trust (1) physically held
by the Custodian, (2) held by any subcustodian referred to in Section 2
hereof or by any agent referred to in Paragraph K hereof, (3) held by or
maintained in The Depository Trust Company or in Participants Trust Company
or in an Approved Clearing Agency or in the Federal Book-Entry System or in
an Approved Foreign Securities Depository, each of which from time to time
is referred to herein as a "Securities System", and (4) held by the
Custodian or by any subcustodian referred to in Section 2 hereof and
maintained in any Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Trust held (or deemed to
be held) by the Custodian or maintained in a Securities System account or
in an Approved Book-Entry System for Commercial Paper account only upon
receipt of proper instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities or participation interests for
the account of the Trust, BUT ONLY against receipt of payment
therefor; if delivery is made in Boston or New York City, payment
therefor shall be made in accordance with generally accepted clearing
house procedures or by use of Federal Reserve Wire System procedures;
if delivery is made elsewhere payment therefor shall be in accordance
with the then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by the parties
hereto; if the sale is effected through a Securities System, delivery
and payment therefor shall be made in accordance with the provisions
of Paragraph L hereof; if the sale of commercial paper is to be
effected through an Approved Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made in accordance with the
provisions of Paragraph M hereof; if the securities are to be sold
outside the United States, delivery of the securities for the account
of the Trust may be made either (a) in advance of receipt of payment
therefor in the absence of specific instructions to do so provided
such actions are consistent with local settlement practices and
customs, subject to the Custodian's standard of care, or (b) in
accordance with procedures agreed to in writing from time to
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<PAGE>
time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by the
Trust and (ii) upon the failure by the Trust to make a successful bid
with respect to a portfolio security, the continued holding of which
is contingent upon the making of such a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such securities
and entered into by the Trust;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Trust;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or otherwise
become payable; PROVIDED that, in any such case, the cash or other
consideration is to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Trust or into the name of any nominee of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Paragraph K hereof or into the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof; or for exchange
for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
PROVIDED that, in any such case, the new securities or participation
interests are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance
with the "street delivery" custom; PROVIDED that the Custodian shall
adopt such procedures as the Trust from time to time shall approve to
ensure their prompt return to the Custodian by the broker in the event
the broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion of such securities, or pursuant to any deposit
agreement; PROVIDED that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
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<PAGE>
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such warrants,
rights or similar securities, or the surrender of interim receipts or
temporary securities for definitive securities; PROVIDED that, in any
such case, the new securities and cash, if any, are to be delivered to
the Custodian or any subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of securities made
by the Trust (such loans to be made pursuant to the terms of the
Trust's current registration statement), BUT ONLY against receipt of
adequate collateral as agreed upon from time to time by the Custodian
and the Trust, which may be in the form of cash or obligations issued
by the United States government, its agencies or instrumentalities;
except that in connection with any securities loans for which
collateral is to be credited to the Custodian's account in the
book-entry system authorized by the U.S. Department of Treasury, the
Custodian will not be held liable or responsible for the delivery of
securities loaned by the Trust prior to the receipt of such
collateral;
10) For delivery as security in connection with any borrowings by
the Trust requiring a pledge or hypothecation of assets by the Trust
(if then permitted under circumstances described in the current
registration statement of the Trust), provided, that the securities
shall be released only upon payment to the Custodian of the monies
borrowed, except that in cases where additional collateral is required
to secure a borrowing already made, further securities may be released
for that purpose; upon receipt of proper instructions, the Custodian
may pay any such loan upon redelivery to it of the securities pledged
or hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
11) When required for delivery in connection with any reduction
of or redemption of an interest in the Trust in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian employed pursuant
to Section 2 hereof) and a broker-dealer registered under the
Securities Exchange Act of 1934 and, if necessary, the Trust, relating
to compliance with the rules of The Options Clearing Corporation or of
any registered national securities exchange, or of any similar
organization or organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the Trust;
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<PAGE>
13) For delivery in accordance with the provisions of any
agreement among the Trust, the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures commissions merchant,
relating to compliance with the rules of the Commodity Futures Trading
Commission and/or of any contract market or commodities exchange or
similar organization, regarding futures margin account deposits or
payments in connection with futures transactions by the Trust;
14) For any other proper corporate purpose, BUT ONLY upon receipt
of, in addition to proper instructions, a certified copy of a
resolution of the Board specifying the securities to be delivered,
setting forth the purpose for which such delivery is to be made,
declaring such purpose to be proper corporate purpose, and naming the
person or persons to whom delivery of such securities shall be made.
C. REGISTRATION OF SECURITIES Securities held by the Custodian (other
than bearer securities) for the account of the Trust shall be registered in
the name of the Trust or in the name of any nominee of the Trust or of any
nominee of the Custodian, or in the name or nominee name of any agent
appointed pursuant to Paragraph K hereof, or in the name or nominee name of
any subcustodian employed pursuant to Section 2 hereof, or in the name or
nominee name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or Approved
Book-Entry System for Commercial Paper; provided, that securities are held
in an account of the Custodian or of such agent or of such subcustodian
containing only assets of the Trust or only assets held by the Custodian or
such agent or such subcustodian as a custodian or subcustodian or in a
fiduciary capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of the Trust
shall be in "street" or other good delivery form or shall be returned to
the selling broker or dealer who shall be advised of the reason thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a separate bank
account or accounts in the name of the Trust, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement, and
shall hold in such account or accounts, subject to the provisions hereof,
all cash received by it from or for the account of the Trust other than
cash maintained by the Trust in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940. Funds
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held by the Custodian for the Trust may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as the Custodian may in its discretion deem
necessary or desirable; PROVIDED, however, that every such bank or trust
company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the funds
to be deposited with each such bank or trust company shall be approved in
writing by two officers of the Trust. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to withdrawal
only by the Custodian in that capacity.
E. PAYMENT FOR INTERESTS, OR INCREASES IN INTERESTS, IN THE TRUST The
Custodian shall make appropriate arrangements with the Transfer Agent of
the Trust to enable the Custodian to make certain it promptly receives the
cash or other consideration due to the Trust for payment of interests in
the Trust, or increases in such interests, in accordance with the governing
documents and registration statement of the Trust. The Custodian will
provide prompt notification to the Trust of any receipt by it of such
payments.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement between
the Trust and the Custodian, the Custodian shall, upon the receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties, invest in such securities and instruments as
may be set forth in such instructions on the same day as received all
federal funds received after a time agreed upon between the Custodian and
the Trust.
G. COLLECTIONS The Custodian shall promptly collect all income and
other payments with respect to registered securities held hereunder to
which the Trust shall be entitled either by law or pursuant to custom in
the securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment by
the issuer, such securities are held by the Custodian or agent thereof and
shall credit such income, as collected, to the Trust's custodian account.
The Custodian shall do all things necessary and proper in connection with
such prompt collections and, without limiting the generality of the
foregoing, the Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;
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3) Endorse and deposit for collection, in the name of the Trust,
checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities
System or in an Approved Book-Entry System for Commercial Paper at the
time funds become available to the Custodian; in the case of
securities maintained in The Depository Trust Company funds shall be
deemed available to the Trust not later than the opening of business
on the first business day after receipt of such funds by the
Custodian. The Custodian shall notify the Trust as soon as reasonably
practicable whenever income due on any security is not promptly
collected. In any case in which the Custodian does not receive any due
and unpaid income after it has made demand for the same, it shall
immediately so notify the Trust in writing, enclosing copies of any
demand letter, any written response thereto, and memoranda of all oral
responses thereto and to telephonic demands, and await instructions
from the Trust; the Custodian shall in no case have any liability for
any nonpayment of such income provided the Custodian meets the
standard of care set forth in Section 8 hereof. The Custodian shall
not be obligated to take legal action for collection unless and until
reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends,
rights and other items of like nature, and deal with the same pursuant
to proper instructions relative thereto.
H. PAYMENT OF TRUST MONIES Upon receipt of proper instructions, which
may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options on futures
contracts purchased for the account of the Trust but only (a) against
the receipt of
(i) such securities registered as provided in Paragraph C
hereof or in proper form for transfer or
(ii) detailed instructions signed by an officer of the Trust
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Trust of
the options, futures contracts, forward contracts or options on
futures contracts by the Custodian (or by a subcustodian employed
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pursuant to Section 2 hereof or by a clearing corporation of
a national securities exchange of which the Custodian is a member
or by any bank, banking institution or trust company doing
business in the United States or abroad which is qualified under
the Investment Company Act of 1940 to act as a custodian and
which has been designated by the Custodian as its agent for this
purpose or by the agent specifically designated in such
instructions as representing the purchasers of a new issue of
privately placed securities); (b) in the case of a purchase
effected through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected through an Approved
Book-Entry System for Commercial Paper, upon receipt of the paper
by the Custodian or subcustodian in accordance with the
conditions set forth in Paragraph M hereof; (d) in the case of
repurchase agreements entered into between the Trust and another
bank or a broker-dealer, against receipt by the Custodian of the
securities underlying the repurchase agreement either in
certificate form or through an entry crediting the Custodian's
segregated, non-proprietary account at the Federal Reserve Bank
of Boston with such securities along with written evidence of the
agreement by the bank or broker-dealer to repurchase such
securities from the Trust; or (e) in the case of securities
purchased outside the United States, the Custodian may make
payment therefor either (i) in advance of receipt of such
securities in the absence of specific instructions to do so
provided such actions are consistent with local settlement
practices and customs, subject to the Custodian's standard of
care, or (ii) in accordance with procedures agreed to in writing
from time to time by the parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Trust as set forth in Paragraph B
hereof;
3) When required for the reduction or redemption of an interest
in the Trust in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the
Trust, including but not limited to the following payments for the
account of the Trust: advisory fees, interest, taxes, management
compensation and expenses, accounting, transfer agent and legal fees,
and other operating expenses of the Trust whether or not such expenses
are to be in whole or part capitalized or treated as deferred
expenses;
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5) For distributions or payments to Holders of Interest of the
Trust; and
6) For any other proper corporate purpose, BUT ONLY upon receipt
of, in addition to proper instructions, a certified copy of a
resolution of the Board, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate purpose, and naming
the person or persons to whom such payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED
In any and every case where payment for purchase of securities for the
account of the Trust is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions signed
by two officers of the Trust to so pay in advance, the Custodian shall be
absolutely liable to the Trust for such securities to the same extent as if
the securities had been received by the Custodian; EXCEPT that in the case
of a repurchase agreement entered into by the Trust with a bank which is a
member of the Federal Reserve System, the Custodian may transfer funds to
the account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii) written
evidence that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of the
Custodian maintained with the Federal Reserve Bank of Boston or (iii) the
safekeeping receipt, PROVIDED that such securities have in fact been so
TRANSFERRED by book-entry and the written repurchase agreement is received
by the Custodian in due course; AND EXCEPT that if the securities are to be
purchased outside the United States, payment may be made in accordance with
procedures agreed to in writing from time to time by the parties hereto.
Notwithstanding any other provision in this Agreement to the contrary,
where securities are purchased or sold outside the United States, delivery
of securities for the account of the Trust may be made by the Custodian in
advance of receipt of payment for the securities sold, and the Custodian
may pay for securities in advance of receipt of the securities purchased
for the account of the Trust, in the absence of specific instructions to do
so provided such actions are consistent with local settlement practices and
customs, subject to the Custodian's standard of care.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF INTERESTS IN THE TRUST
From such funds as may be available for the purpose, but subject to any
applicable resolutions of the Board and the current procedures of the
Trust, the Custodian shall, upon receipt of written instructions from the
Trust or from the Trust's transfer agent make funds and/or portfolio
securities available for payment to holders of interest in the Trust which
have caused the amount of their interests to be reduced, or for their
interest to be redeemed.
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K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any
time or times in its discretion appoint (and may at any time remove) any
other bank or trust company (PROVIDED such bank or trust company is itself
qualified under the Investment Company Act of 1940 to act as a custodian or
is itself an eligible foreign custodian within the meaning of Rule 17f-5
under said Act) as the agent of the Custodian to carry out such of the
duties and functions of the Custodian described in this Section 3 as the
Custodian may from time to time direct; PROVIDED, however, that the
appointment of any such agent shall not relieve the Custodian of any of its
responsibilities or liabilities hereunder, and as between the Trust and the
Custodian the Custodian shall be fully responsible for the acts and
omissions of any such agent. For the purposes of this Agreement, any
property of the Trust held by any such agent shall be deemed to be held by
the Custodian hereunder.
L. DEPOSIT OF TRUST PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Trust
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, and at all
times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2 keep securities of the
Trust in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the Custodian
or such subcustodian in the Securities System which shall not include
any assets of the Custodian or such subcustodian or any other person
other than assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
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(b) The records of the Custodian with respect to securities of
the Trust which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Trust, and the
Custodian shall be fully and completely responsible for maintaining a
recordkeeping system capable of accurately and currently stating the
Trust's holdings maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased in
book-entry form for the account of the Trust only upon (i) receipt of
notice or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such payment and transfer for
the account of the Trust; except that when such securities are
purchased outside the United States, payment therefor may be made by
the Custodian in advance of receipt of such notice or advice and the
making of such entry in the absence of specific instructions to do so
provided such actions are consistent with local settlement practices
and customs, subject to the Custodian's standard of care. The
Custodian shall transfer securities sold for the account of the Trust
only upon (i) receipt of notice or advice from the Securities System
that payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Trust; except
that when such securities are sold outside the United States, transfer
thereof may be made by the Custodian in advance of receipt of such
notice or advice and the making of such entry in the absence of
specific instructions to do so provided such actions are consistent
with local settlement practices and customs, subject to the
Custodian's standard of care. Copies of all notices or advices from
the Securities System of transfers of securities for the account of
the Trust shall identify the Trust, be maintained for the Trust by the
Custodian and be promptly provided to the Trust at its request. The
Custodian shall promptly send to the Trust confirmation of each
transfer to or from the account of the Trust in the form of a written
advice or notice of each such transaction, and shall furnish to the
Trust copies of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of the Trust on
the next business day.
(d) The Custodian shall promptly send to the Trust any report or
other communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly send
to the Trust any report or other communication relating to the
Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to Paragraph
K hereof or any subcustodian employed pursuant to Section 2 hereof
shall promptly send to the Trust and to the Custodian any report or
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other communication relating to such agent's or subcustodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System. The Custodian's books
and records relating to the Trust's participation in each Securities
System will at all times during regular business hours be open to the
inspection of the Trust's authorized officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the
absence of receipt of a certificate of an officer of the Trust that
the Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from the officers of
the Trust that the Board has annually reviewed the continued use by
the Trust of each Securities System, and the Trust shall promptly
notify the Custodian if the use of a Securities System is to be
discontinued; at the request of the Trust, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
(f) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for any loss or damage to
the Trust resulting from use of the Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or subcustodians or of any of its or their employees or from
any failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the Securities
System or any other person; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or damage if
and to the extent that the Trust has not been made whole for any such
loss or damage.
M. DEPOSIT OF TRUST COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM
FOR COMMERCIAL PAPER Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Trust, the
Custodian may deposit and/or maintain direct issue commercial paper owned
by the Trust in any Approved Book-Entry System for Commercial Paper, in
each case only in accordance with applicable Securities and Exchange
Commission rules, regulations, and no-action correspondence, and at all
times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial paper of
the Trust in an Approved Book-Entry System for Commercial Paper,
provided that such paper is issued in book entry form by the Custodian
or subcustodian on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and provided
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further that such paper is maintained in a non-proprietary
account ("Account") of the Custodian or such subcustodian in an
Approved Book-Entry System for Commercial Paper which shall not
include any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such subcustodian as
a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper
of the Trust which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue of
commercial paper purchased by the Trust which is included in the
System and shall at all times during regular business hours be open
for inspection by authorized officers, employees or agents of the
Trust. The Custodian shall be fully and completely responsible for
maintaining a recordkeeping system capable of accurately and currently
stating the Trust's holdings of commercial paper maintained in each
such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Trust only upon contemporaneous
(i) receipt of notice or advice from the issuer that such paper has
been issued, sold and transferred to the Account, and (ii) the making
of an entry on the records of the Custodian to reflect such purchase,
payment and transfer for the account of the Trust. The Custodian shall
transfer such commercial paper which is sold or cancel such commercial
paper which is redeemed for the account of the Trust only upon
contemporaneous (i) receipt of notice or advice that payment for such
paper has been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such transfer or
redemption and payment for the account of the Trust. Copies of all
notices, advices and confirmations of transfers of commercial paper
for the account of the Trust shall identify the Trust, be maintained
for the Trust by the Custodian and be promptly provided to the Trust
at its request. The Custodian shall promptly send to the Trust
confirmation of each transfer to or from the account of the Trust in
the form of a written advice or notice of each such transaction, and
shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the System for the account of
the Trust on the next business day.
(d) The Custodian shall promptly send to the Trust any report or
other communication received or obtained by the Custodian relating to
each System's accounting system, system of internal accounting
controls or procedures for safeguarding commercial paper deposited in
the System; the Custodian shall promptly send to the Trust any report
or other communication relating to the Custodian's internal accounting
controls and procedures for safeguarding commercial paper deposited
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in any Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to Paragraph
K hereof or any subcustodian employed pursuant to Section 2 hereof
shall promptly send to the Trust and to the Custodian any report or
other communication relating to such agent's or subcustodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Approved Book-Entry System for Commercial
Paper.
(e) The Custodian shall not act under this Paragraph M in the
absence of receipt of a certificate of an officer of the Trust that
the Board has approved the use of a particular Approved Book-Entry
System for Commercial Paper; the Custodian shall also obtain
appropriate assurance from the officers of the Trust that the Board
has annually reviewed the continued use by the Trust of each Approved
Book-Entry System for Commercial Paper, and the Trust shall promptly
notify the Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the Trust,
the Custodian will terminate the use of any such System as promptly as
practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry
System for Commercial Paper is maintained by the subcustodian) shall
issue physical commercial paper or promissory notes whenever requested
to do so by the Trust or in the event of an electronic system failure
which impedes issuance, transfer or custody of direct issue commercial
paper by book-entry.
(g) Anything to the contrary in this Agreement notwithstanding,
the Custodian shall be liable to the Trust for any loss or damage to
the Trust resulting from use of any Approved Book-Entry System for
Commercial Paper by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or subcustodians or
of any of its or their employees or from any failure of the Custodian
or any such agent or subcustodian to enforce effectively such rights
as it may have against the System, the issuer of the commercial paper
or any other person; at the election of the Trust, it shall be
entitled to be subrogated to the rights of the Custodian with respect
to any claim against the System, the issuer of the commercial paper or
any other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the Trust has not been
made whole for any such loss or damage.
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts for
and on behalf of the Trust, into which account or accounts may be
transferred cash and/or securities, including securities maintained in an
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account by the Custodian pursuant to Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the Trust, the
Custodian and any registered broker-dealer (or any futures commission
merchant), relating to compliance with the rules of the Options Clearing
Corporation and of any registered national securities exchange (or of the
Commodity Futures Trading Commission or of any contract market or
commodities exchange), or of any similar organization or organizations,
regarding escrow or deposit or other arrangements in connection with
transactions by the Trust, (ii) for purposes of segregating cash or U.S.
Government securities in connection with options purchased, sold or written
by the Trust or futures contracts or options thereon purchased or sold by
the Trust, (iii) for the purposes of compliance by the Trust with the
procedures required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper purposes, BUT ONLY, in the case of
clause (iv), upon receipt of, in addition to proper instructions, a
certificate signed by two officers of the Trust, setting forth the purpose
such segregated account and declaring such purpose to be a proper purpose.
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of the Trust held by it and in connection with
transfers of securities.
P. PROXIES The Custodian shall, with respect to the securities held by
it hereunder, cause to be promptly delivered to the Trust all forms of
proxies and all notices of meetings and any other notices or announcements
or other written information affecting or relating to the securities, and
upon receipt of proper instructions shall execute and deliver or cause its
nominee to execute and deliver such proxies or other authorizations as may
be required. Neither the Custodian nor its nominee shall vote upon any of
the securities or execute any proxy to vote thereon or give any consent or
take any other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
Q. COMMUNICATIONS RELATING TO TRUST PORTFOLIO SECURITIES The Custodian
shall deliver promptly to the Trust all written information (including,
without limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection therewith
and notices of exercise of call and put options written by the Trust and
the maturity of futures contracts purchased or sold by the Trust) received
by the Custodian from issuers and other persons relating to the securities
and participation interests being held for the Trust. With respect to
tender or exchange offers, the Custodian shall deliver promptly to the
Trust all written information received written information received by the
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Custodian from issuers and other persons relating to the securities
and participation interests whose tender or exchange is sought and from the
party (or his agents) making the tender or exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection therewith
and notices of exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and participation interests
held by the Custodian under this Agreement, the Custodian shall have
responsibility for promptly notifying the Trust of all such offers in
accordance with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is responsible as
provided in this Paragraph R, the Trust shall have responsibility for
providing the Custodian with all necessary instructions in timely fashion.
Upon receipt of proper instructions, the Custodian shall timely deliver to
the issuer or trustee thereof, or to the agent of either, warrants, puts,
calls, rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof. Upon receipt of proper
instructions, the Custodian shall timely deposit securities upon
invitations for tenders of securities upon proper receipt therefor and upon
receipt of assurances satisfactory to the Custodian that the consideration
to be paid or delivered or the tendered securities are to be returned to
the Custodian or subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the contrary, the
Custodian shall take all necessary action, unless otherwise directed to the
contrary by proper instructions, to comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions, or similar rights of
security ownership, and shall thereafter promptly notify the Trust in
writing of such action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to
the depository used by an issuer of American Depository Receipts or
International Depository Receipts (hereinafter collectively referred to as
"ADRs") for such securities, against a written receipt therefor adequately
describing such securities and written evidence satisfactory to the
Custodian that the depository has acknowledged receipt of instructions to
issue with respect to such securities ADRs in the name of a nominee of the
Custodian or in the name or nominee name of any subcustodian employed
pursuant to Section 2 hereof, for delivery to the Custodian or such
subcustodian at such place as the Custodian or such subcustodian may from
time to time designate.
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The Custodian shall, upon receipt of proper instructions, surrender
ADRs to the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities underlying
such ADRs to the Custodian or to a subcustodian employed pursuant to
Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term and call
deposits with the banking department of such banking institution (other
than the Custodian) and in such amounts as the Trust may designate.
Deposits may be denominated in U.S. Dollars or other currencies. The
Custodian shall include in its records with respect to the assets of the
Trust appropriate notation as to the amount and currency of each such
deposit, the accepting banking institution and other appropriate details
and shall retain such forms of advice or receipt evidencing the deposit, if
any, as may be forwarded to the Custodian by the banking institution. Such
deposits shall be deemed portfolio securities of the Trust for the purposes
of this Agreement, and the Custodian shall be responsible for the
collection of income from such accounts and the transmission of cash to and
from such accounts.
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS
1. OPTIONS The Custodian shall, upon receipt of proper
instructions and in accordance with the provisions of any agreement
between the Custodian, any registered broker-dealer and, if necessary,
the Trust, relating to compliance with the rules of the Options
Clearing Corporation or of any registered national securities exchange
or similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the purchase or
writing of an option on a security or securities index or other
financial instrument or index by the Trust; deposit and maintain in a
segregated account for the Trust, either physically or by book-entry
in a Securities System, securities subject to a covered call option
written by the Trust; and release and/or transfer such securities or
other assets only in accordance with a notice or other communication
evidencing the expiration, termination or exercise of such covered
option furnished by the Options Clearing Corporation, the securities
or options exchange on which such covered option is traded or such
other organization as may be responsible for handling such options
transactions. The Custodian and the broker-dealer shall be responsible
for the sufficiency of assets held in the Trust's segregated account
in compliance with applicable margin maintenance requirements.
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<PAGE>
2. FUTURES CONTRACTS The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if
any, evidencing the purchase or sale of a futures contract or an
option on a futures contract by the Trust; deposit and maintain in a
segregated account, for the benefit of any futures commission
merchant, assets designated by the Trust as initial, maintenance or
variation "margin" deposits (including mark-to-market payments)
intended to secure the Trust's performance of its obligations under
any futures contracts purchased or sold or any options on futures
contracts written by the Trust, in accordance with the provisions of
any agreement or agreements among the Trust, the Custodian and such
futures commission merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any contract market or
commodities exchange or similar organization regarding such margin
deposits or payments; and release and/or transfer assets in such
margin accounts only in accordance with any such agreements or rules.
The Custodian and the futures commission merchant shall be responsible
for the sufficiency of assets held in the segregated account in
compliance with the applicable margin maintenance and mark-to-market
payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall, pursuant to
proper instructions, enter into or cause a subcustodian to enter into
foreign exchange contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for the account
of the Trust. Such transactions may be undertaken by the Custodian or
subcustodian with such banking or financial institutions or other
currency brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be portfolio
securities of the Trust; and accordingly, the responsibility of the
Custodian therefor shall be the same as and no greater than the
Custodian's responsibility in respect of other portfolio securities of
the Trust. The Custodian shall be responsible for the transmittal to
and receipt of cash from the currency broker or banking or financial
institution with which the contract or option is made, the maintenance
of proper records with respect to the transaction and the maintenance
of any segregated account required in connection with the transaction.
The Custodian shall have no duty with respect to the selection of the
currency brokers or banking or financial institutions with which the
Trust deals or for their failure to comply with the terms of any
contract or option. Without limiting the foregoing, it is agreed that
upon receipt of proper instructions and insofar as funds are made
available to the Custodian for the purpose, the Custodian may (if
determined necessary by the Custodian to consummate a particular
transaction on behalf and for the account of the Trust) make free
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<PAGE>
outgoing payments of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign exchange contract
or confirmation that the countervalue currency completing the foreign
exchange contract has been delivered or received. The Custodian shall
not be responsible for any costs and interest charges which may be
incurred by the Trust or the Custodian as a result of the failure or
delay of third parties to deliver foreign exchange; provided that the
Custodian shall nevertheless be held to the standard of care set forth
in, and shall be liable to the Trust in accordance with, the
provisions of Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in
its discretion, without express authority from the Trust:
1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its duties
under this Agreement, PROVIDED, that all such payments shall be
accounted for by the Custodian to the Treasurer of the Trust;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Trust, checks,
drafts and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer
and other dealings with the securities and property of the Trust
except as otherwise directed by the Trust.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS OF NET
ASSET VALUE
Inasmuch as the Trust is treated as a partnership for federal income tax
purposes, the Bank shall as Agent (or as Custodian, as the case may be) keep and
maintain the books and records of the Trust in accordance with the Procedures
for Allocations and Distributions adopted by the Trustees of the Trust, as such
Procedures may be in effect from time to time. A copy of the current Procedures
is attached to this Agreement, and the Trust agrees promptly to furnish all
revisions to or restatements of such Procedures to the Bank.
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the
Trust's portfolio securities) and render as at the close of business on each day
a detailed statement of the amounts received or paid out and of securities
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<PAGE>
received or delivered for the account of the Trust during said day and such
other statements, including a daily trial balance and inventory of the Trust's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Trust; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of the Trust and the net asset value of each
interest in the Trust, such computations and determinations to be made in
accordance with the governing documents of the Trust and the votes and
instructions of the Board and of the investment adviser at the time in force and
applicable, and promptly notify the Trust and its investment adviser and such
other persons as the Trust may request of the result of such computation and
determination. In computing the net asset value the Custodian may rely upon
security quotations received by telephone or otherwise from sources or pricing
services designated by the Trust by proper instructions, and may further rely
upon information furnished to it by any authorized officer of the Trust relative
(a) to liabilities of the Trust not appearing on its books of account, (b) to
the existence, status and proper treatment of any reserve or reserves, (c) to
any procedures or policies established by the Board regarding the valuation of
portfolio securities or other assets, and (d) to the value to be assigned to any
bond, note, debenture, Treasury bill, repurchase agreement, subscription right,
security, participation interests or other asset or property for which market
quotations are not readily available. The Custodian shall also compute and
determine at such time or times as the Trust may designate the portion of each
item which has significance for a holder of an interest in the Trust in
computing and determining its federal income tax liability including, but not
limited to, each item of income, expense and realized and unrealized gain or
loss of the Trust which is attributable for Federal income tax purposes to each
such holder.
5. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Trust. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Trust, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Trust, and in the event of
termination of this Agreement shall be delivered to the Trust or to such other
person or persons as shall be designated by the Trust. Disposition of any
account or record after any required period of preservation shall be only in
accordance with specific instructions received from the Trust. The Bank shall
assist generally in the preparation of reports to holders of interest in the
Trust, to the Securities and Exchange Commission, including Form N-SAR, and to
others, audits of accounts, and other ministerial matters of like nature; and,
upon request, shall furnish the Trust's auditors with an attested inventory of
securities held with appropriate information as to securities in transit or in
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<PAGE>
the process of purchase or sale and with such other information as said
auditors may from time to time request. The Custodian shall also maintain
records of all receipts, deliveries and locations of such securities, together
with a current inventory thereof, and shall conduct periodic verifications
(including sampling counts at the Custodian) of certificates representing bonds
and other securities for which it is responsible under this Agreement in such
manner as the Custodian shall determine from time to time to be advisable in
order to verify the accuracy of such inventory. The Bank shall not disclose or
use any books or records it has prepared or maintained by reason of this
Agreement in any manner except as expressly authorized herein or directed by the
Trust, and the Bank shall keep confidential any information obtained by reason
of this Agreement.
6. OPINION OF TRUST'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Trust may from time
to time request, to enable the Trust to obtain from year to year favorable
opinions from the Trust's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Trust's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Trust and the
Bank. The Bank shall be entitled to receive from the Trust on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Trust) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
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<PAGE>
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Trust to maintain
custody of any securities or cash of the Trust in a foreign country including,
but not limited to, losses resulting from governmental actions and restrictions,
nationalization, expropriation, currency restrictions, acts of war, civil war or
terrorism, insurrection, revolution, military or usurped powers, nuclear
fission, fusion or radiation, earthquake, storm or other disturbance of nature
or acts of God.
If the Trust requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Trust being liable for the payment of money or incurring
liability of some other form, the Trust, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
9. PERSONS HAVING ACCESS TO ASSETS OF THE TRUST
(i) No trustee, officer, employee or agent of the Trust shall have
physical access to the assets of the Trust held by the Custodian or be
authorized or permitted to withdraw any investments of the Trust, nor shall
the Custodian deliver any assets of the Trust to any such person. No
officer or director, employee or agent of the Custodian who holds any
similar position with the Trust or the investment adviser or the
administrator of the Trust shall have access to the assets of the Trust.
(ii) Access to assets of the Trust held hereunder shall only be
available to duly authorized officers, employees, representatives or agents
of the Custodian or other persons or entities for whose actions the
Custodian shall be responsible to the extent permitted hereunder, or to the
Trust's independent public accountants in connection with their auditing
duties performed on behalf of the Trust.
(iii) Nothing in this Section 9 shall prohibit any officer, employee
or agent of the Trust or of the investment adviser of the Trust from giving
instructions to the Custodian or executing a certificate so long as it does
not result in delivery of or access to assets of the Trust prohibited by
paragraph (i) of this Section 9.
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<PAGE>
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, that the Trust may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Trust, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Trust shall pay
to the Custodian such compensation as may be due as of the date of such
termination (and shall likewise reimburse the Custodian for its costs, expenses
and disbursements).
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the
Trusts determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of Trust holders of any Trust or Trusts or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Trust or Trusts shall give written notice to the Custodian
of such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non- interested trustees of the
Trusts. If the conditions of the preceding sentence are not met then the Trust
or Trusts may terminate this Agreement on sixty (60) days written notice.
The Board of the Trust shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Trust
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Trust to the Trust but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Trust held by or deposited with the
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<PAGE>
Bank, and all books of account and records kept by the Bank pursuant to
this Agreement, and all documents held by the Bank relative thereto. Thereafter
such bank or trust company shall be the successor of the Custodian under this
Agreement.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing signed
by both parties and shall be annexed hereto, PROVIDED that no such interpretive
or additional provisions shall contravene any applicable federal or state
regulations or any provision of the governing instruments of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the Trust
addressed to 3808 One Exchange Square, Central Hong Kong, or to such other
address as the Trust may have designated to the Bank, in writing with a copy to
Eaton Vance Management at 24 Federal Street, Boston, Massachusetts 02110, or to
Investors Bank & Trust Company, 89 South Street, Boston, Massachusetts 02111
with a copy to Eaton Vance Management at 24 Federal Street, Boston,
Massachusetts 02110, shall be deemed to have been properly delivered or given
hereunder to the respective addressees.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
The Custodian expressly acknowledges the provision in the Declaration of
Trust of the Trust (Section 5.2 and 5.6) limiting the personal liability of the
Trustees and officers of the Trust, and the Custodian hereby agrees that it
shall have recourse to the Trust for payment of claims or obligations as between
the Trust and the Custodian arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the Trust.
14. ADOPTION OF THE AGREEMENT BY THE TRUST
The Trust represents that its Board has approved this Agreement and has
duly authorized the Trust to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Trust and the Bank reflecting such adoption,
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<PAGE>
which letter agreement shall be dated and signed by a duly authorized
officer of the Trust and duly authorized officer of the Bank. This Agreement
shall be deemed to be duly executed and delivered by each of the parties in its
name and behalf by its duly authorized officer as of the date of such letter
agreement, and this Agreement shall be deemed to supersede and terminate, as of
the date of such letter agreement, all prior agreements between the Trust and
the Bank relating to the custody of the Trust's assets.
* * * * *
<PAGE>
SCHEDULE A
TO CUSTODIAN AGREEMENT
BETWEEN
ASIAN SMALL COMPANIES PORTFOLIO
AND
INVESTORS BANK & TRUST COMPANY
ADDITIONAL PARTIES TO THE AGREEMENT DATE OF AGREEMENT
Emerging Markets Portfolio March 8, 1994
Greater China Growth Portfolio October 27, 1992, as amended
February 7, 1994
Russia and Eastern Europe Portfolio November 17, 1997
South Asia Portfolio March 8, 1994
<PAGE>
RUSSIA AND EASTERN EUROPE PORTFOLIO
November 17, 1997
Russia and Eastern Europe Portfolio hereby adopts and agrees to become a party
to the attached Agreement with Investors Bank & Trust Company.
RUSSIA AND EASTERN EUROPE PORTFOLIO
By: /s/ James B. Hawkes
--------------------------------
James B. Hawkes, Vice President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /s/ Michael F. Rogers
--------------------------------
Title:
<PAGE>
RUSSIA AND EASTERN EUROPE PORTFOLIO
PROCEDURES FOR ALLOCATIONS
AND DISTRIBUTIONS
October 17, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I--Introduction .....................................................1
ARTICLE II--Definitions .....................................................1
ARTICLE III--Capital Accounts
Section 3.1 Capital Accounts of Holders .........................4
Section 3.2 Book Capital Accounts ...............................4
Section 3.3 Tax Capital Accounts ................................4
Section 3.4 Compliance with Treasury Regulations ................5
ARTICLE IV--Distributions of Cash and Assets
Section 4.1 Distributions of Distributable Cash .................5
Section 4.2 Division Among Holders ..............................5
Section 4.3 Distributions Upon Liquidation of a Holder's
Interest in the Trust .............................5
Section 4.4 Amounts Withheld ....................................5
ARTICLE V--Allocations
Section 5.1 Allocation of Items to Book Capital Accounts.........6
Section 5.2 Allocation of Taxable Income and Tax Loss
to Tax Capital Accounts............................6
Section 5.3 Special Allocations to Book and Tax Capital
Accounts ..........................................7
Section 5.4 Other Adjustments to Book and Tax Capital
Accounts ..........................................7
Section 5.5 Timing of Tax Allocations to Book and Tax
Capital Accounts ..................................8
Section 5.6 Redemptions During the Fiscal Year ..................8
ARTICLE VI--Withdrawals
Section 6.1 Partial Withdrawals .................................8
Section 6.2 Redemptions .........................................8
Section 6.3 Distribution in Kind.................................8
ARTICLE VII--Liquidation
Section 7.1 Liquidation Procedure ...............................8
Section 7.2 Alternative Liquidation Procedure ...................9
Section 7.3 Cash Distributions Upon Liquidation .................9
Section 7.4 Treatment of Negative Book Capital
Account Balance ...................................9
<PAGE>
PROCEDURES FOR
ALLOCATIONS AND DISTRIBUTIONS
OF
RUSSIA AND EASTERN EUROPE PORTFOLIO
(the "Trust")
ARTICLE I
Introduction
The Trust is treated as a partnership for federal income tax purposes.
These procedures have been adopted by the Trustees of the Trust and will be
furnished to the Trust's accountants for the purpose of allocating Trust gains,
income or loss and distributing Trust assets. The Trust will maintain its books
and records, for both book and tax purposes, using the accrual method of
accounting.
ARTICLE II
Definitions
Except as otherwise provided herein, a term referred to herein shall have
the same meaning as that ascribed to it in the Declaration. References in this
document to "hereof", "herein" and "hereunder" shall be deemed to refer to this
document in its entirety rather than the article or section in which any such
word appears.
"Book Capital Account" shall mean, for any Holder at any time in any Fiscal
Year, the Book Capital Account balance of the Holder on the first day of the
Fiscal Year, as adjusted each day pursuant to the provisions of Section 3.2
hereof.
"Capital Contribution" shall mean, with respect to any Holder, the amount
of money and the Fair Market Value of any assets actually contributed from time
to time to the Trust with respect to the Interest held by such Holder.
"Code" shall mean the U.S. Internal Revenue Code of 1986, as amended from
time to time, as well as any non-superseded provisions of the Internal Revenue
Code of 1954, as amended (or any corresponding provision or provisions of
succeeding law).
"Declaration" shall mean the Trust's Declaration of Trust, dated October
17, 1997, as amended from time to time.
"Designated Expenses" shall mean extraordinary Trust expenses attributable
to a particular Holder that are to be borne by such Holder.
"Distributable Cash" for any Fiscal Year shall mean the gross cash proceeds
from Trust activities, less the portion thereof used to pay or establish
Reserves, plus such portion of the Reserves as the Trustees, in their sole
discretion, no longer deem necessary to be held as Reserves. Distributable Cash
shall not be reduced by depreciation, amortization, cost recovery deductions, or
similar allowances.
"Fair Market Value" of a security, instrument or other asset on any
particular day shall mean the fair value thereof as determined in good faith by
or on behalf of the Trustees in the manner set forth in the Registration
Statement.
"Fiscal Year" shall mean an annual period determined by the Trustees which
ends on such day as is permitted by the Code.
"Holders" shall mean as of any particular time all holders of record of
Interests in the Trust.
"Interest(s)" shall mean the interest of a Holder in the Trust, including
all rights, powers and privileges accorded to Holders by the Declaration, which
interest may be expressed as a percentage, determined by calculating, at such
times and on such bases as the Trustees shall from time to time determine, the
ratio of each Holder's Book Capital Account balance to the total of all Holders'
Book Capital Account balances.
"Investments" shall mean all securities, instruments or other assets of the
Trust of any nature whatsoever, including, but not limited to, all equity and
debt securities, futures contracts, and all property of the Trust obtained by
virtue of holding such assets.
"Matched Income or Loss" shall mean Taxable Income, Tax-Exempt Income or
Tax Loss of the Trust comprising interest, original issue discount and dividends
and all other types of income or loss to the extent the Taxable Income,
Tax-Exempt Income, Tax Loss or Loss items not included in Tax Loss arising from
such items are recognized for tax purposes at the same time that Profit or Loss
are accrued for book purposes by the Trust.
"Net Unrealized Gain" shall mean the excess, if any, of the aggregate Fair
Market Value of all Investments over the aggregate adjusted bases, for federal
income tax purposes, of all Investments.
"Net Unrealized Loss" shall mean the excess, if any, of the aggregate
adjusted bases, for federal income tax purposes, of all Investments over the
aggregate Fair Market Value of all Investments.
"Profit" and "Loss" shall mean, for each Fiscal Year or other period, an
amount equal to the Taxable Income or Tax Loss for such Fiscal Year or period
with the following adjustments:
(i) Any Tax-Exempt Income shall be added to such Taxable Income or
subtracted from such Tax Loss; and
(ii) Any expenditures of the Trust for such year or period described
in Section 705(a)(2)(B) of the Code or treated as expenditures under
Section 705(a)(2)(B) of the Code pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profit or Loss or specially allocated shall be subtracted from such Taxable
Income or added to such Tax Loss.
"Redemption" shall mean the complete withdrawal of an Interest of a Holder
the result of which is to reduce the Book Capital Account balance of that Holder
to zero.
"Registration Statement" shall mean the Registration Statement of the Trust
on Form N-1A as filed with the U.S. Securities and Exchange Commission under the
1940 Act, as the same may be amended from time to time.
"Reserves" shall mean, with respect to any Fiscal Year, funds set aside or
amounts allocated during such period to reserves which shall be maintained in
amounts deemed sufficient by the Trustees for working capital and to pay taxes,
insurance, debt service, renewals, or other costs or expenses, incident to the
ownership of the Investments or to its operations.
"Tax Capital Account" shall mean, for any Holder at any time in any Fiscal
Year, the Tax Capital Account balance of the Holder on the first day of the
Fiscal Year, as adjusted each day pursuant to the provisions of Section 3.3
hereof.
"Tax-Exempt Income" shall mean income of the Trust for such Fiscal Year or
period that is exempt from federal income tax and not otherwise taken into
account in computing Profit or Loss.
"Tax Lot" shall mean securities or other property which are both purchased
or acquired, and sold or otherwise disposed of, as a unit.
"Taxable Income" or "Tax Loss" shall mean the taxable income or tax loss of
the Trust, determined in accordance with Section 703(a) of the Code, for each
Fiscal Year as determined for federal income tax purposes, together with each of
the Trust's items of income, gain, loss or deduction which is separately stated
or otherwise not included in computing taxable income and tax loss.
"Treasury Regulations" shall mean the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust" shall mean Russia and Eastern Europe Portfolio, a trust fund formed
under the laws of the State of New York by the Declaration.
"Trustees" shall mean each signatory to the Declaration, so long as such
signatory shall continue in office in accordance with the terms thereof, and all
other individuals who at the time in question have been duly elected or
appointed and have qualified as Trustees in accordance with the provisions
thereof and are then in office.
The "1940 Act" shall mean the U.S. Investment Company Act of 1940, as
amended from time to time, and the rules and regulations thereunder.
ARTICLE III
Capital Accounts
3.1. Capital Accounts of Holders. A separate Book Capital Account and a
separate Tax Capital Account shall be maintained for each Holder pursuant to
Section 3.2 and Section 3.3. hereof, respectively. In the event the Trustees
shall determine that it is prudent to modify the manner in which the Book
Capital Accounts or Tax Capital Accounts, or any debits or credits thereto, are
computed in order to comply with the Treasury Regulations, the Trustees may make
such modification, provided that it is not likely to have a material effect on
the amounts distributable to any Holder pursuant to Article VII hereof upon the
dissolution of the Trust.
3.2. Book Capital Accounts. The Book Capital Account balance of each Holder
shall be adjusted each day by the following amounts:
(a) increased by any increase in Net Unrealized Gains or decrease in Net
Unrealized Losses allocated to such Holder pursuant to Section 5.1(a) hereof;
(b) decreased by any decrease in Net Unrealized Gains or increase in Net
Unrealized Losses allocated to such Holder pursuant to Section 5.1(b) hereof;
(c) increased or decreased, as the case may be, by the amount of Profit or
Loss, respectively, allocated to such Holder pursuant to Section 5.1(c) hereof;
(d) increased by any Capital Contribution made by such Holder; and,
(e) decreased by any distribution, including any distribution to effect a
withdrawal or Redemption, made to such Holder by the Trust.
Any adjustment pursuant to Section 3.2 (a), (b) or (c) above shall be
prorated for increases in each Holder's Book Capital Account balance resulting
from Capital Contributions, or distributions or withdrawals from the Trust or
Redemptions by the Trust occurring, during such Fiscal Year as of the day after
the Capital Contribution, distribution, withdrawal or Redemption is accepted,
made or effected by the Trust.
3.3. Tax Capital Accounts. The Tax Capital Account balance of each Holder
shall be adjusted at the following times by the following amounts:
(a) increased daily by the adjusted tax bases of any Capital Contribution
made by such Holder to the Trust;
(b) increased daily by the amount of Taxable Income and Tax-Exempt Income
allocated to such Holder pursuant to Section 5.2 hereof at such times as the
allocations are made under Section 5.2 hereof;
(c) decreased daily by the amount of cash distributed to the Holder
pursuant to any of these procedures including any distribution made to effect a
withdrawal or Redemption; and
(d) decreased by the amount of Tax Loss allocated to such Holder pursuant
to Section 5.2 hereof at such times as the allocations are made under Section
5.2 hereof.
3.4. Compliance with Treasury Regulations. The foregoing provisions and
other provisions contained herein relating to the maintenance of Book Capital
Accounts and Tax Capital Accounts are intended to comply with Treasury
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Treasury Regulations.
The Trustees shall make any appropriate modifications in the event
unanticipated events might otherwise cause these procedures not to comply with
Treasury Regulations Section 1.704-1(b), including the requirements described in
Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(1) and Treasury Regulations
Section 1.704-1(b)(2)(iv). Such modifications are hereby incorporated into these
procedures by this reference as though fully set forth herein.
ARTICLE IV
Distributions of Cash and Assets
4.1. Distributions of Distributable Cash. Except as otherwise provided in
Article VII hereof, Distributable Cash for each Fiscal Year may be distributed
to the Holders at such times, if any, and in such amounts as shall be determined
in the sole discretion of the Trustees. In exercising such discretion, the
Trustees shall distribute such Distributable Cash so that Holders that are
regulated investment companies can comply with the distribution requirements set
forth in Code Section 852 and avoid the excise tax imposed by Code Section 4982.
4.2. Division Among Holders. All distributions to the Holders with respect
to any Fiscal Year pursuant to Section 4.1 hereof shall be made to the Holders
in proportion to the Taxable Income, Tax-Exempt Income or Tax Loss allocated to
the Holders with respect to such Fiscal Year pursuant to the terms of these
procedures.
4.3. Distributions Upon Liquidation of a Holder's Interest in the Trust.
Upon liquidation of a Holder's interest in the Trust, the proceeds will be
distributed to the Holder as provided in Section 5.6, Article VI, and Article
VII hereof. If such Holder has a negative book capital account balance, the
provisions of Section 7.4 will apply.
4.4. Amounts Withheld. All amounts withheld pursuant to the Code or any
provision of any state or local tax law with respect to any payment or
distribution to the Trust or the Holders shall be treated as amounts distributed
to such Holders pursuant to this Article IV for all purposes under these
procedures. The Trustees may allocate any such amount among the Holders in any
manner that is in accordance with applicable law.
ARTICLE V
Allocations
5.1. Allocation of Items to Book Capital Accounts.
(a) Increase in Net Unrealized Gains or Decrease in Net Unrealized Losses.
Any decrease in Net Unrealized Loss due to realization of items shall be
allocated to the Holder receiving the allocation of Loss, in the same amount,
under Section 5.1(c) hereof. Subject to Section 5.1(d) hereof, any increase in
Net Unrealized Gains or decrease in Net Unrealized Loss on any day during the
Fiscal Year shall be allocated to the Holders' Book Capital Accounts at the end
of such day, in proportion to the Holders' respective Book Capital Account
balances at the commencement of such day.
(b) Decrease in Net Unrealized Gains or Increase in Net Unrealized Losses.
Any decrease in Net Unrealized Gains due to realization of items shall be
allocated to the Holder receiving the allocation of Profit, in the same amount,
under Section 5.1(c) hereof. Subject to Section 5.1(d) hereof, any decrease in
Net Unrealized Gains or increase in Net Unrealized Loss on any day during the
Fiscal Year shall be allocated to the Holders' Book Capital Accounts at the end
of such day, in proportion to the Holders' respective Book Capital Account
balances at the commencement of such day.
(c) Profit and Loss. Subject to Section 5.1(d) hereof, Profit and Loss
occurring on any day during the Fiscal Year shall be allocated to the Holders'
Book Capital Accounts at the end of such day in proportion to the Holders'
respective Book Capital Account balances at the commencement of such day.
(d) Other Book Capital Account Adjustments.
(i) Any allocation pursuant to Section 5.1(a), (b) or (c) above shall
be prorated for increases in each Holder's Book Capital Account resulting
from Capital Contributions, or distributions or withdrawals from the Trust
or Redemptions by the Trust occurring, during such Fiscal Year as of the
day after the Capital Contribution, distribution, withdrawal or Redemption
is accepted, made or effected by the Trust.
(ii) For purposes of determining the Profit, Loss, and Net Unrealized
Gain or Net Unrealized Loss or any other item allocable to any Fiscal Year,
Profit, Loss, and Net Unrealized Gain or Net Unrealized Loss and any such
other item shall be determined by or on behalf of the Trustees using any
reasonable method under Code Section 706 and the Treasury Regulations
thereunder.
5.2. Allocation of Taxable Income and Tax Loss to Tax Capital Accounts.
(a) Taxable Income and Tax Loss. Subject to Section 5.2(b) and Section 5.3
hereof, which shall take precedence over this Section 5.2(a), Taxable Income or
Tax Loss for any Fiscal Year shall be allocated at least annually to the
Holders' Tax Capital Accounts as follows:
(i) First, Taxable Income and Tax Loss, whether constituting ordinary
income (or loss) or capital gain (or loss), derived from the sale or other
disposition of a Tax Lot of securities or other property shall be allocated
as of the date such income, gain or loss is recognized for federal income
tax purposes solely in proportion to the amount of unrealized appreciation
(in the case of such income or capital gain, but not in the case of any
such loss) or depreciation (in the case of any such loss, but not in the
case of any such income or capital gain) from that Tax Lot which was
allocated to the Holders' Book Capital Accounts each day that such
securities or other property was held by the Trust pursuant to Section
5.1(a) and (b) hereof; and
(ii) Second, any remaining amounts at the end of the Fiscal Year, to
the Holders in proportion to their respective daily average Book Capital
Account balances determined for the Fiscal Year of the allocation.
(b) Matched Income or Loss. Notwithstanding the provisions of Section
5.2(a) hereof, Taxable Income, Tax-Exempt Income or Tax Loss accruing on any day
during the Fiscal Year constituting Matched Income or Loss, shall be allocated
daily to the Holders' Tax Capital Accounts solely in proportion to and to the
extent of corresponding allocations of Profit or Loss to the Holders' Book
Capital Accounts pursuant to the first sentence of Section 5.1(c) hereof.
5.3. Special Allocations to Book and Tax Capital Accounts.
(a) The Designated Expenses computed for each Holder shall be allocated
separately (not included in the allocations of Matched Income or Loss, Loss or
Tax Loss) to the Book Capital Account and Tax Capital Account of each Holder.
(b) If the Trust incurs any nonrecourse indebtedness, then allocations of
items attributable to nonrecourse indebtedness shall be made to the Tax Capital
Account of each Holder in accordance with the requirements of Treasury
Regulations Section 1.704-1(b)(4)(iv)(d).
(c) In accordance with Code Section 704(c) and the Treasury Regulations
thereunder, Taxable Income and Tax Loss with respect to any property contributed
to the capital of the Trust shall be allocated to the Tax Capital Account of
each Holder so as to take into account any variation between the adjusted tax
basis of such property to the Trust for federal income tax purposes and such
property's Fair Market Value at the time of contribution to the Trust.
5.4. Other Adjustments to Book and Tax Capital Accounts.
(a) Any election or other decision relating to such allocations shall be
made by the Trustees in any manner that reasonably reflects the purpose and
intention of these procedures.
(b) Each Holder will report its share of Trust income and loss for federal
income tax purposes in accordance with the allocations effected pursuant to
Section 5.2 hereof.
5.5. Timing of Tax Allocations to Book and Tax Capital Accounts. Allocation
of Taxable Income, Tax-Exempt Income and Tax Loss pursuant to Section 5.2 hereof
for any Fiscal Year, unless specified above to the contrary, shall be made only
after corresponding adjustments have been made to the Book Capital Accounts of
the Holders for the Fiscal Year as provided pursuant to Section 5.1 hereof.
5.6. Redemptions During the Fiscal Year. If a Redemption occurs prior to
the end of a Fiscal Year, the Trust will treat the Fiscal Year as ended for the
purposes of computing the redeeming Holder's distributive share of Trust items
and allocations of all items to such Holder will be made as though each Holder
were receiving its allocable share of Trust items at such time. All items so
allocated to the redeeming Holder will be subtracted from the items to be
allocated among the other non-redeeming Holders at the actual end of the Fiscal
Year. All items allocated among the redeeming and non-redeeming Holders will be
made subject to the rules of Code Sections 702, 704, 706 and 708 and the
Treasury Regulations promulgated thereunder.
ARTICLE VI
Withdrawals
6.1. Partial Withdrawals. At any time any Holder shall be entitled to
request a withdrawal of such portion of the Interest held by such Holder as such
Holder shall request.
6.2. Redemptions. At any time a Holder shall be entitled to request a
Redemption of all of its Interest. A Holder's Interest may be redeemed at any
time during the Fiscal Year as provided in Section 6.3 hereof by a cash
distribution or, at the option of a Holder, by a distribution of a proportionate
amount except for fractional shares of each Trust asset if the Trust so agrees.
However, the Holder may be redeemed by a distribution of a proportionate amount
of the Trust's assets only at the end of a Fiscal Year. However, if the Holder
has contributed any property to the Trust other than cash, if such property
remains in the Trust at the time the Holder requests withdrawal, then such
property will be sold by the Trust prior to the time at which the Holder
withdraws from the Trust.
6.3. Distribution in Kind. If a withdrawing Holder receives a distribution
in kind of its proportionate part of Trust property, then unrealized income,
gain, loss or deduction attributable to such property shall be allocated among
the Holders as if there had been a disposition of the property on the date of
distribution in compliance with the requirements of Treasury Regulations Section
1.704-1(b)(2)(iv)(e).
ARTICLE VII
Liquidation
7.1. Liquidation Procedure. Subject to Section 7.4 hereof, upon dissolution
of the Trust, the Trustees shall liquidate the assets of the Trust, apply and
distribute the proceeds thereof as follows:
(a) first to the payment of all debts and obligations of the Trust to third
parties, including without limitation the retirement of outstanding debt,
including any debt owed to Holders or their affiliates, and the expenses of
liquidation, and to the setting up of any Reserves for contingencies which may
be necessary; and
(b) then in accordance with the Holders' positive Book Capital Account
balances after adjusting Book Capital Accounts for allocations provided in
Article V hereof and in accordance with the requirements described in Treasury
Regulations Section 1.704-1(b)(2) (ii)(b)(2).
7.2. Alternative Liquidation Procedure. Notwithstanding the foregoing, if
the Trustees shall determine that an immediate sale of part or all of the Trust
assets would cause undue loss to the Holders, the Trustees, in order to avoid
such loss, may, after having given notification to all the Holders, to the
extent not then prohibited by the law of any jurisdiction in which the Trust is
then formed or qualified and applicable in the circumstances, either defer
liquidation of and withhold from distribution for a reasonable time any assets
of the Trust except those necessary to satisfy the Trust's debts and obligations
or distribute the Trust's assets to the Holders in liquidation.
7.3. Cash Distributions Upon Liquidation. Except as provided in Section 7.2
hereof, amounts distributed in liquidation of the Trust shall be paid solely in
cash.
7.4. Treatment of Negative Book Capital Account Balance. If a Holder has a
negative balance in its Book Capital Account following the liquidation of its
Interest, as determined after taking into account all capital account
adjustments for the Fiscal Year during which the liquidation occurs, then such
Holder shall restore the amount of such negative balance to the Trust by the
later of the end of the Fiscal Year or 90 days after the date of such
liquidation so as to comply with the requirements of Treasury Regulations
Section 1.704-1(b)(2)(ii)(b)(3). Such amount shall, upon liquidation, be paid to
creditors of the Trust or distributed to other Holders in accordance with their
positive Book Capital Account balances.
* * *
RUSSIA AND EASTERN EUROPE PORTFOLIO
ADMINISTRATION AGREEMENT
AGREEMENT made this 17th day of November, 1997 between Russia and Eastern
Europe Portfolio, a New York trust (the "Trust"), and Eaton Vance Management, a
Massachusetts business trust (the "Administrator"):
1. DUTIES OF THE ADMINISTRATOR. The Trust hereby employs the Administrator
to act as administrator for and to manage and administer the affairs of the
Trust, subject to the supervision of the Trustees of the Trust, for the period
and on the terms set forth in this Agreement.
The Administrator hereby accepts such employment, and agrees to manage and
administer the Trust's business affairs and, in connection therewith, to furnish
for the use of the Trust office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Trust.
The Administrator's services include monitoring and providing reports to
the Trustees of the Trust concerning the investment performance achieved by the
Adviser for the Trust, recordkeeping, preparation and filing of documents
required to comply with Federal and state securities laws, supervising the
activities of the custodian of the Trust, providing assistance in connection
with meetings of the Trustees and of Holders of Interests in the Trust and other
management and administrative services necessary to conduct the business of the
Trust.
The Administrator shall not be responsible for providing investment
management or advisory services to the Trust under this Agreement. Lloyd George
Investment Management (Bermuda) Limited in its capacity of investment adviser to
the Trust, shall be responsible for managing the investment and reinvestment of
the assets of the Trust under the Trust's separate Investment Advisory Agreement
with the investment adviser.
2. COMPENSATION OF THE ADMINISTRATOR. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Trust shall pay
to the Administrator on the last day of such month a fee computed by applying
the annual asset rate applicable to that portion of the average daily net assets
of the Trust throughout the month in each Category as indicated below:
ANNUAL
CATEGORY AVERAGE DAILY NET ASSETS ASSET RATE
1 less than $500 million 0.25000%
2 $500 million but less than $1 billion 0.23333%
3 $1 billion but less than $1.5 billion 0.21667%
4 $1.5 billion but less than $2 billion 0.20000%
5 $2 billion but less than $3 billion 0.18333%
6 $3 billion and over 0.16667%
The average daily net assets of the Trust will be computed in accordance with
the Declaration of Trust, and any applicable votes and determinations of the
Trustees of the Trust. In case of initiation or termination of this Agreement
during any month, the fee for that month shall be reduced proportionately on the
basis of the number of calendar days during which it is in effect and the fee
shall be computed upon the average net assets for the business days it is so in
effect for that month.
The Administrator may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Trust shall include,
without implied limitation, (i) expenses of maintaining the Trust and continuing
its existence, (ii) registration of the Trust under the Investment Company Act
of 1940, (iii) commissions, fees and other expenses connected with the
acquisition, holding and disposition of securities and other investments, (iv)
auditing, accounting and legal expenses, (v) taxes and interest, (vi)
governmental fees, (vii) expenses of issue, sale and redemption of Interests in
the Trust, (viii) expenses of registering and qualifying the Trust and Interests
in the Trust under federal and state securities laws and of preparing and
printing registration statements or other offering documents or memoranda for
such purposes and for distributing the same to Holders and investors, and fees
and expenses of registering and maintaining registrations of the Trust and of
the Trust's placement agent as broker-dealer or agent under state securities
laws, (ix) expenses of reports and notices to Holders and of meetings of Holders
and proxy solicitations therefor, (x) expenses of reports to governmental
officers and commissions, (xi) insurance expenses, (xii) association membership
dues, (xiii) fees, expenses and other disbursements, if any, of custodians and
sub-custodians for all services to the Trust (including without limitation
safekeeping of funds, securities and other investments, keeping of books,
accounts and records, and determination of net asset values, book capital
account balances and tax capital account balances), (xiv) fees, expenses and
disbursements of transfer agents, dividend disbursing agents, Holder servicing
agents and registrars for all services to the Trust, (xv) expenses of servicing
the accounts of Holders, (xvi) any direct charges to Holders approved by the
Trustees of the Trust, (xvii) compensation and expenses of Trustees of the Trust
who are not members of the Administrator's organization, (xviii) the advisory
fees payable under any advisory agreement to which the Trust is a party and
(xix) such non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Trust to indemnify its Trustees, officers and Holders with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and Holders of
Interest in the Trust are or may be or become interested in the Administrator as
Trustees, officers, or employees, or otherwise and that Trustees, officers and
employees of the Administrator are or may be or become similarly interested in
the Trust, and that the Administrator may be or become interested in the Trust
as a shareholder or otherwise. It is also understood that Trustees, officers and
employees of the Administrator may be or become interested (as directors,
trustees, officers, employees, shareholders or otherwise) in other companies or
entities (including, without limitation, other investment companies) which the
Administrator may organize, sponsor or acquire, or with which it may merge or
consolidate, and that the Administrator or its subsidiaries or affiliates may
enter into advisory or management agreements or other contracts or relationships
with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator of the Trust are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Trust or to any Holder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any security or other
investment.
6. DURATION AND TERMINATION OF THE AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect to and including February 28,
1999 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance after February 28, 1999 is specifically
approved at least annually by the Trustees of the Trust.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement, without the payment of any
penalty, by action of its Trustees, and the Trust may, at any time upon such
written notice to the Administrator, terminate this Agreement by vote of a
majority of the outstanding voting securities of the Trust. This Agreement shall
terminate automatically in the event of its assignment.
7. AMENDMENT OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved by the vote of a majority of the Trustees of
the Trust.
8. LIMITATION OF LIABILITY. The Administrator expressly acknowledges the
provision in the Declaration of Trust of the Trust (Sections 5.2 and 5.6)
limiting the personal liability of the Trustees and officers of the Trust, and
the Administrator hereby agrees that it shall have recourse to the Trust for
payment of claims or obligations as between the Trust and the Administrator
arising out of this Agreement and shall not seek satisfaction from any Trustee
or officer of the Trust.
9. CERTAIN DEFINITIONS. The term "assignment" when used herein shall have
the meaning specified in the Investment Company Act of 1940 as now in effect or
as hereafter amended subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission by any rule, regulation or order. The
terms "Holders" and "Interests" when used herein shall have the respective
meanings specified in the Declaration of Trust of the Trust.
RUSSIA AND EASTERN EUROPE PORTFOLIO EATON VANCE MANAGEMENT
By /s/ James B. Hawkes By /s/ Alan R. Dynner
----------------------------- ------------------------------
Vice President Vice President,
and not individually
Boston Management and Research
24 Federal Street
Boston, MA 02110
(617) 482-8260
October 17, 1997
Russia and Eastern Europe Portfolio
24 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
With respect to our purchase from you, at the purchase price of $100,000,
of an interest (an "Initial Interest") in Russia and Eastern Europe Portfolio
(the "Portfolio"), we hereby advise you that we are purchasing such Initial
Interest for investment purposes without any present intention of redeeming or
reselling.
The amount paid by the Portfolio on any withdrawal by us of any portion of
such Initial Interest will be reduced by a portion of any unamortized
organization expenses, determined by the proportion of the amount of such
Initial Interest withdrawn to the aggregate Initial Interests of all holders of
similar Initial Interests then outstanding after taking into account any prior
withdrawals of any such Initial Interest.
Very truly yours,
BOSTON MANAGEMENT AND RESEARCH
By: /s/ James B. Hawkes
-----------------------------
James B. Hawkes
President
